Bitcoin and part of the altcoins continue to test resistance at higher levels and the upward trend may resume soon.
According to CryptoQuant data, the total amount of Bitcoin (BTC) held in foreign exchange reserves fell from 2.8 million BTC in October 2019 to 2.4 million. Analysts believe that this steady decline in reserves means that retail and whale traders may be accumulating Bitcoin, signalling that they expect prices to rise in the future.
Even if Bitcoin is still well below its historic highs, if it can close the third quarter of 2020 above $10,590, that will be the second-best close of any quarter. Skew data show that this would only be behind the fourth quarter 2017 closing price of US$13,660.
All this suggests that the cryptomorph markets are moving into the hands of stronger investors, who are not disturbed by daily price fluctuations.
Institutional investors are said to have large pockets and prefer to hold long-term positions. Bybit data shows that Grayscale Investments currently holds 449,900 Bitcoin, which is more than 2% of the maximum possible supply of Bitcoin.
If institutional investors increase their allocations to cryptomoks, demand may eventually exceed supply and this may boost the price of Bitcoin.
We will study the charts to analyze the path of least resistance for the top 10 cryptomoks.
Bitcoin has hovered around the 20-day exponential moving average (US$10,732) in the last few days. Although the bulls tried to escape on September 29, they were unable to sustain the higher levels.
The bears were unable to capitalise on the weakness and sink the price below the $10,500 support. This shows indecision between the bulls and bears about the next directional movement.
The flat 20-day MME and relative strength index near the mid-point suggests a balance between supply and demand. It is difficult to predict the direction of the next break from this range.
However, sometimes the RSI movement can provide some hints. If the RSI rises above the symmetrical triangle and level 55, it increases the possibility that the bulls will attempt a breach of $11,178.
If successful, the BTC/USD pair can rise to US$ 12,000 and then to US$ 12,460. On the other hand, if bears sink the price below $10,500 and the trend line goes up, a drop to $9,835 is likely.
The bears are trying to halt the recovery from the 20-day MME relief (US$361). If the price falls below US$337, the Ether (ETH) may fall to US$ 308,392.
When the price cannot rise above the 20-day MME in a downward move, this suggests that the sentiment is negative and the bears are selling up.
Both moving averages are falling marginally and the failure of the RSI to rise above the 50 level suggests that bears are in the lead. A drop below critical support of $308,392 could result in a drop to $240.
This negative view will be invalidated if the ETH/USD pair increases and exits the 20-day MME. Such a move may result in a high to $395.
The US$0.219712 fall from the September 24 intraday casualty hit a 20-day EMA wall (US$0.243). The failure of the bulls to push the XRP above the 20-day MME suggests that the bears may be operating uncovered in this resistance.
Both moving averages are falling marginally and the RSI is just below level 50, suggesting that bears are at a slight advantage.
If bears can sink the XRP/USD pair below the $0.2295-$0.219712 support zone, the bearish trend may resume with the next stop at $0.19.
Contrary to this assumption, if the pair goes up and breaks above the 20-day MME, it will be the first sign that selling pressure is reducing. A break of $0.26 will suggest a possible change in the trend.
The failure of bulls to sustain Bitcoin Cash (BCH) above the 20-day MME (US$227) in the last four days suggests a lack of demand at higher levels.
If bears drop the price below $223, there will be a drop to $210 and then $200. A break below the critical support of $200 will be a big negative as it may signal the beginning of a possible downward trend.
This negative view will be denied if the BCH/USD pair climbs and exits the downtrend line and air resistance at US$242. Above this level, the increase may reach US$ 280.
The Binance Coin (BNB) retraction reached the Fibonacci retraction level of 61.8% from US$29.0886 on September 29, where it is facing resistance. However, if altcoin does not give up a lot of ground, the bulls will make another attempt to push the price above US$29.0886.
If they are successful, the BCH/USD pair can rise to the 78.6% Fibonacci retracement level of $30,9884 and above to $33,4084. The rising moving averages and the RSI in the positive zone suggest that the bulls are in the lead.
Bears will try to pull down the price, but bulls will likely buy the next drop to the aggressively 20-day MME as the trend is up. Failure to sustain the price above the 20-day MME will be the first sign of weakness.
The failure of the bulls to push the price above the 20-day MME (US$4.55) suggests weakness. The Polkadot (DOT) refused and bears will now try to sink the price below the $4-3.5321 support zone.
If successful, the DOT/USD pair may give way and fall to $2,782 and below to $2. The gradual fall of the 20-day MME and the failure of the RSI to stay above 50 suggests that bears are at an advantage.
However, if the pair recovers from $4 or rises from current levels, bears will try to push the price above the 20-day MME. If they can do this, the pair could rise to $4.921 and then $5.5899.
The failure of the bulls to sustain the price above the 20-day MME ($10.60) could have generated profit reserves for short-term traders. The bears will now try to capitalize on this weakness and sink the Chainlink (LINK) below the immediate support of $9.3771.
If successful, the LINK/USD pair can fall to US$ 6.90. The 20-day MME has started to fall and the RSI has stayed below 50 in the last few days, suggesting that bears are at an advantage.
However, if the pair recovers from the $9.3771 support, a few days of limited action is possible. A drop above $11.1990 will be the first sign that selling pressure has been reduced.
The Bitcoin SV (BSV) went down from the downward trend line on September 28, but the bulls did not allow the price to fall below the 20-day MME (US$166). Buyers today pushed the price above the downtrend line and are trying to climb it above the 50-day SMA (US$180).
The 20-day MME is gradually rising and the RSI has risen to positive territory, suggesting that bulls are at a slight advantage. If they can boost the BSV/USD pair above the 50-day SMA, this will increase the possibility of a rise to USD 208.
On the other hand, if the pair falls from the 50-day SMA, this will suggest that the bears are aggressively defending this level. Sellers will try to sink the pair below the $146.20-135 support zone.
Crypto.com Coin (CRO) has been trading below moving averages in recent days, but bears have failed to sink the price below immediate support by $0.144743.
However, if the CRO/USD pair does not rise above moving averages in the next few days, this could result in another round of sales that could challenge support of $0.144743.
A break and close (UTC time) below this level will complete the pattern of the downward triangle, which has a target of $0.10607.
This bearish setting will be invalidated if the bulls push the price above the triangle’s bearish trend line. Above this level, you can move to $0.183416 and then to $0.191101.
The strong relief in Cardano (ADA) could not rise above the trend line on September 28, but the positive sign is that the bulls did not allow the price to fall below the 20-day MME (US$0.0955).
The 20-day MME is rising and the RSI has remained above 50, suggesting that the bulls are at an advantage.
If the ADA/USD rebounds from the 20-day MME, the bulls will once again try to push the price above the bearish trend line. If successful, the pair could rise to $0.1280.
Contrary to this assumption, if bears sink the pair below the 20-day MME, a drop to $0.0855982 and then to $0.0755701 is possible.