Bloomberg Intelligence senior commodity strategist Mike McGlone believes that Bitcoin (BTC) is more likely to rally to $40,000 than slump to $20,000. This bullish outlook seems to be shared by traders as Bitcoin initiated a sharp recovery today.
On-chain data also suggests that long-term holders (LTH) have again started accumulating Bitcoin after booking profits during the rally from $10,000 to $64,000.
The total number of Bitcoin held by these long-term holders is 2.3 million more than what they held at the peak of the 2017 bull market. This shows the veteran traders remain bullish about the future prospects of Bitcoin.
CoinShares' Monday “Digital Asset Fund Flows Weekly” report shows institutional investors pulled out $141 million from Bitcoin investment products last week. However, Ether (ETH), XRP and Cardano (ADA) products witnessed net inflows, suggesting money is exiting Bitcoin and entering select altcoins.
However, the outflow from Bitcoin products is minuscule compared to the massive $4.2 billion that was pumped into them in 2021. This shows that most investors have held their positions despite the recent fall.
Let’s analyze the charts of the top-10 cryptocurrencies to determine whether the correction is over or if the prices could fall further.
Bitcoin broke below the trendline of the symmetrical triangle on June 7, indicating the uncertainty resolved in favor of the bears. However, the long tail on the June 8 candlestick shows strong buying at lower levels.
The bulls continued their purchase today, which seems to have trapped the aggressive bears who may have sold on June 7. However, the BTC/USDT pair is still not out of the woods yet because the relief rally is likely to face resistance at the 20-day exponential moving average ($37,925).
If the price turns down from this resistance, it will suggest that the sentiment remains negative and traders are selling on rallies. The next leg of the downtrend could begin after the bears sink the price below the $31,000 to $28,000 support zone. Such a move may open the doors for a decline to $20,000.
However, the relative strength index (RSI) has formed a bullish divergence, indicating the bearish momentum is weakening. The first sign of strength will be a breakout and close above the 20-day EMA, which could extend the relief rally to the 50-day simple moving average ($45,896).
Ether once again turned down from the resistance line of the symmetrical triangle on June 7, indicating the bears are aggressively defending the zone between the resistance line and the 50-day SMA ($2,927).
However, the long tail on the June 8 candlestick shows the bulls are buying on dips to the support line of the symmetrical triangle. This suggests the ETH/USDT pair could remain stuck inside the triangle for a few more days.
The next trending move could start after the price breaks above or below the triangle. The buyers will have to propel the price above the 50-day SMA to gain the upper hand. Alternatively, a break below $2,079.94 could signal advantage to the bears.
Binance Coin (BNB) broke below the trendline on June 8 but the bears could not sustain the lower levels. The long tail on the daily candlestick suggests that bulls are attempting to defend the trendline.
If buyers push the price above the 20-day EMA ($389), the BNB/USDT pair could rise to the overhead resistance at $433. A breakout and close above this level will complete a bullish ascending triangle pattern, which has a target objective at $608.60.
Contrary to this assumption, if the price turns down from the current level or the overhead resistance and breaks below the trendline, it will suggest that bears have overpowered the bulls. That could result in a drop to $257.40 and then to $211.70.
Cardano dropped below the 50-day SMA ($1.57) on June 8 but the bears could not capitalize on this weakness. The long tail on the June 8 and June 9 candlestick shows strong buying at lower levels.
The flattish moving averages and the RSI just below the midpoint suggest a balance between supply and demand.
This balance will shift in favor of the bears if the price breaks below the trendline. The ADA/USDT pair could then drop to $1.24 and then to $1.
On the contrary, if the buyers propel the price above the 20-day EMA ($1.64), the pair could rise to the overhead resistance at $1.94. A breakout and close above this level could push the pair to the all-time high at $2.47.
Dogecoin (DOGE) broke below the 20-day EMA ($0.36) on June 7 and fell to the neckline of the head and shoulders pattern. The bulls are trying to defend this level as seen from the long tail on the June 8 candlestick and the strong rebound today.
However, unless the bulls push the price above the moving averages quickly, the bears will once again try to sink the DOGE/USDT pair below the neckline. If they succeed, the pair could decline to $0.21 and then to $0.10.
The marginally downsloping 20-day EMA and the RSI just below the midpoint suggest a minor advantage to the bears. This negative view will invalidate if the bulls drive the price above the 50-day SMA ($0.39). The pair could then move up to $0.47.
XRP broke below the $0.88 support on June 7, suggesting supply exceeds demand. However, the long tail on the June 8 candlestick indicates that bulls are trying to defend the $0.75 to $0.65 support zone.
The downsloping 20-day EMA ($0.99) and the RSI in the negative territory suggest that bears are in control. The relief rally is likely to face stiff resistance at the 20-day EMA. If the price turns down from this resistance, the possibility of a break below the support zone increases.
If that happens, the XRP/USDT pair could drop to $0.45 and then to $0.39. Conversely, if the bulls push the price above $1.10, it will suggest the buyers are back in the game and a rally to the downtrend line is possible.
Polkadot (DOT) turned down from the 20-day EMA ($24.99) on June 7 and broke below the trendline of the ascending channel. This suggests that the sentiment remains negative and traders are selling on rallies.
If the bulls fail to push the price back into the channel within the next few days, further selling could be expected. The gradually downsloping 20-day EMA and the RSI in the negative territory indicate the path of least resistance is to the downside.
If the DOT/USDT pair breaks below $19.60, the next stop could be the critical support at $15. Conversely, if the pair re-enters the channel, it will suggest strong accumulation at lower levels.
A breakout and close above the resistance line of the ascending channel will signal that bulls are back in the game.
Uniswap (UNI) dipped below the $21.50 support on June 8 but the bears could not sustain the lower levels. The long tail on the day’s candlestick shows the bulls are defending the $21.50 level aggressively.
The buyers will now try to push the price above the 20-day EMA ($26.81). If they succeed, the UNI/USDT pair could rally to the overhead resistance at $30. This level may act as a stiff resistance and if the price turns down from it, the pair could remain range-bound between $21.50 and $30 for a few days.
On the contrary, if the price turns down from the 20-day EMA, it will suggest the sentiment is negative and traders are selling on every minor rally. That will increase the possibility of a break below $21.50. If that happens, the pair could start its journey toward $16.49 and then $13.04.
Solana (SOL) turned down from the 61.8% Fibonacci retracement level at $43.38 on June 7 but the bears could not pull the price below the trendline. The altcoin rebounded off the trendline on June 8, indicating strong buying on dips.
The rising moving averages and the RSI in the positive zone suggest that bulls have the upper hand.
If buyers thrust and sustain the price above $43.38, the SOL/USDT pair could move up to the 78.6% retracement level at $49.97. Such a move will suggest the recent correction is over. A break above $49.97 could clear the path for a retest of the all-time high at $58.38.
This positive view will nullify if the price turns down and plummets below the trendline. A break below $33.60 could result in a decline to $25.70.
Bitcoin Cash (BCH) broke below the $616.04 support on June 7, suggesting the bears are in command. However, the long tail on the June 8 candlestick indicates that bulls are trying to defend the $500 to $468.13 support zone.
If the bulls can sustain the price above $616.04, the BCH/USDT pair could make one more attempt to rise above the downtrend line. If that happens, the pair could rally to the 50-day SMA ($917).
On the other hand, if the price turns down from the current level or the downtrend line, then the bears may challenge the critical $468.13 support. A break below this level could extend the decline to the next support at $400.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.