The total crypto market capitalization has risen from about $190.5 billion at the start of the year to over $243 billion. That is a rise of about 27.55% within 17 days. This shows that the bulls are back in action. Another interesting thing to note is that the rally is led by altcoins, which are outperforming Bitcoin (BTC) by a huge margin. This shows that the current rally is more broad-based, announcing the arrival of altseason.
Digital asset management firm Grayscale Investments reported that $225.5 million in investments flowed into its products in Q4 2019. That took the total investment inflow in 2019 to $607.7 million.
The most encouraging sign was that 71% of the investments came from institutional investors, dominated by hedge funds. This shows that institutional investors have upped their stake in the asset class.
Daily cryptocurrency market performance. Source: Coin360
The futures market gives a good insight into the sentiment of the larger players. The CME group Bitcoin futures open interest has risen to 5,328 contracts. If the open interest maintains at the current level or increases further by the time of the monthly close, it will set a new record, and higher than the last one set in July 2019 at 5,252 contracts. Rising open interest with an increase in price is a positive sign, as it shows that the institutional players are confident that the rally will extend further.
The price action on most major cryptocurrencies is showing signs of an up move. However, as the price is coming out of a long slump, it is likely to be a volatile ride up. Therefore, traders can swing trade the first leg of the up move for maximum benefits.
After a minor correction of two days, Bitcoin (BTC) has resumed its up move. Its target remains $10,360.89. Though there is a minor resistance at $9,500, we expect it to be crossed. The 20-day EMA is sloping up and the RSI is close to the overbought zone, which suggests that bulls are in the driver’s seat.
BTC USD daily chart. Source: Tradingview
In case of a correction, we anticipate the bulls to provide support at the 20-day EMA. Therefore, dips to the 20-day EMA can offer a buying opportunity for traders who want to add to their positions or establish fresh positions.
Our view will be invalidated if the BTC/USD pair turns down from the overhead resistance level and plummets below $7,856.76. Traders can hold their long positions with stops at $7,600.
Ether (ETH) bounced off the immediate support at $157.50 on Jan. 16, which is a positive sign. This shows that the bulls are not waiting for a deeper correction to buy. The altcoin has reached the overhead resistance at $173.841, above which, a rally to $197.75 is possible.
ETH USD daily chart. Source: Tradingview
We anticipate the bears to mount a stiff resistance at $197.75, hence, the traders can book partial profits on the remaining long positions close to $190.
Our bullish view will be invalidated if the ETH/USD pair turns down from the current levels and plummets below the $157.60 to $151.829 support zone. For now, the traders can retain the stops at $150, which can be trailed higher after the pair scales above $173.841.
XRP dipped to the neckline of the inverted head and shoulders (H&S) pattern on Jan. 16 but the bulls defended this level, which is a positive sign. If the price can now scale above $0.2454, it can move up to $0.31503.
XRP USD daily chart. Source: Tradingview
The traders who initiated long positions on our suggestion given in the previous analysis can maintain the stop loss at $0.1995.
Our bullish view will be negated if the bears defend the overhead resistance at $0.2454 and sink the XRP/USD pair below the neckline of the inverted H&S pattern.
The bulls defended the dip to the $306.78 support levels on Jan. 16. Bitcoin Cash (BCH) is currently attempting to rise above the overhead resistance at $360 once again. If successful, the altcoin can reach $423.40.
BCH USD daily chart. Source: Tradingview
Both moving averages are sloping up and the RSI is in overbought territory, which suggests that bulls are in command.
For now, the traders can retain the stops on the remaining long positions at $300. The stops can be trailed higher after the BCH/USD pair scales above $360. Our bullish view will be invalidated if the bears sink the pair below the critical support at $306.78.
Bitcoin SV (BSV) has pulled back to just below the 50% Fibonacci retracement level of the recent leg of the rally from $115.75 to $458.74. This shows that the bulls are buying on dips. However, the bounce lacks strength, which points to consolidation for the next few days.
BSV USD daily chart. Source: Tradingview
Attempts to move up will face selling from traders who are stuck at higher levels. Hence, we do not expect a new high within the next few days at least.
On the downside, if the bears sink the BSV/USD pair below $280, the fall can extend to $255.62, which is an important level to watch out for. The traders who have a small long position open after booking profits recently can trail the stops to $280.
After a minor correction for the past couple of days, Litecoin (LTC) has resumed its up move. The next level to watch out for is $66.1486. We expect the bears to mount a defense of this level but if the bulls can scale it, the up move can extend to $80.2731.
LTC USD daily chart. Source: Tradingview
The traders can trail the stop loss on the remaining long positions to $54. If the price rises above $60.8452 but fails to scale above $66.1486, the stops can be tightened further.
Contrary to our assumption, if the price turns down from the current levels and breaks below $54.7278, the LTC/USD pair can dip to $50.
EOS bounced off $3.5216 on Jan. 16 and is currently attempting to scale above the overhead resistance at $4.24. If successful, the altcoin can reach $4.8719. We anticipate the bears to defend this level aggressively.
EOS USD daily chart. Source: Tradingview
However, if the bulls fail to scale above $4.24, the EOS/USD pair might consolidate for a few days. A break below $3.50 will signal a deeper correction. Hence, the traders can keep the stop loss on the remaining long positions at $3.4. The stops can be trailed higher after the pair sustains above $4.24.
Binance Coin (BNB) bounced off $16.31 on Jan. 16 and broke above the minor overhead resistance at $18.19. However, failure of the altcoin to sustain above $18.2 indicates that buying dries up at higher levels.
BNB USD daily chart. Source: Tradingview
If the bulls fail to sustain the price above $18.2, the BNB/USD pair might remain range-bound for a few days.
Our view will be invalidated if the bears sink the price below $16. Below this level, a drop to the 20-day EMA and below it to $14.5201 is possible. Therefore, the traders can retain the stops on the long position at $15.90.
Ethereum Classic (ETC) has risen into the top ten list of cryptocurrencies in terms of market capitalization. The altcoin rallied from a low of $5.46914 on Jan. 14 to a high of $12.04 today by press time, a gain of about 120% in a very short timespan.
ETC USD daily chart. Source: Tradingview
Traders who had initiated long positions on our earlier recommendation are sitting on huge profits. We anticipate the bears to defend the overhead resistance zone between $12 and $14. The RSI has reached extremely overbought levels. Hence, a few days of correction or consolidation is likely.
Therefore, traders can book profits on 50% of the position at the current levels and trail the remaining position with a close stop loss.
The bulls have maintained Tron (TRX) above $0.0163957 for the past two days but have not been able to build on the gains. This shows a lack of urgency among the bulls to buy at higher levels.
TRX USD daily chart. Source: Tradingview
If the bulls can push the price above $0.0181864, move to $0.020 and above it to $0.0234 is possible.
However, if the bulls fail to carry the price higher, the bears will again attempt to sink the TRX/USD pair below $0.0163957. If successful, a drop to $0.0146343 is possible. We do not find any attractive buy setups, hence, we remain neutral on the pair.
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.