The cryptocurrency markets and global stock markets rebounded strongly on November 29, despite the uncertainty caused by the new COVID-19 variant Omicron.
Long-term investors seem to see the recent drop in prices as a buying opportunity. A recent report from MicroStrategy shows that the company bought 7,002 Bitcoin (BTC) at an average price of $ 59,187. That brought MicroStrategy’s total storage to 121,044 bitcoins, which were purchased for an average of about $ 29,534 per BTC.
However, citing order book data, the analytics platform Material Scientist said that “much of Bitcoin’s liquidity has been taken away” and warned that “stoploss hunters” could try to eliminate weak hands with a sharp drop.
Is the current rally a bull trap or the start of an ongoing rally? Let’s check out the top 10 cryptocurrency charts to find out.
Bitcoin’s relief rally is facing resistance at the 20-day EMA ($ 58,712). This shows that sentiment is still negative and the bears are trying to sell as price rebounds to overhead resistance.
BTC / USDT daily chart | Source: TradingView
Although the 20-day EMA continues to fall, the RSI has risen above 46, suggesting that the bearish momentum may ease.
The bulls need to push and hold the price above the 50-day SMA ($ 60.805) to signal the correction is over. After that, the rally can challenge the resistance area of $ 67,000 to $ 69,000.
On the flip side, the bears will seek to break the strong support at the 100-day SMA ($ 54.184) if the price drops sharply from the 20-day EMA. When this happens, the BTC / USDT pair may drop to the critical level of USD 50,000.
The bulls are expected to aggressively defend this level as a break below it could lead to panic selling. After that, the pair can slide to the critical support at $ 40,000.
Ether (ETH) rebounded from the clipping of a developing head and shoulders (H&S) pattern on Nov 28, showing that the bulls are vigorously defending this level. Continuous purchases have the rate on Nov.
ETH / USDT daily chart | Source: TradingView
A break and a close above the USD 4,551 resistance level suggests the correction may be over. The ETH / USDT pair can then rebound to the all-time high of $ 4,868. Breaking above this level will invalidate bearish setup and open the door to a rally to $ 5,796.
Alternatively, if price turns down from current levels and drops below the 50-day SMA ($ 4.243), the bears will make another move to bring the pair below the neckline. A close below this level completes the bearish setup and starts a downtrend.
Selling pressures could build on a break below the 100-day SMA ($ 3,794). After that, the pair could begin their journey towards the pattern’s goal at $ 3,047.
The long tail of the Binance Coin (BNB) on Nov. 28 shows that the bulls are buying the dip as the price falls below the 20-day EMA (USD 595). Now the bulls will attempt to push the price into the $ 669.30 to $ 691.80 resistance area.
BNB / USDT daily chart | Source: TradingView
A breakout and a close above $ 669.30 ($ 669.30) complete an inverted H&S pattern. This bullish setup has a target of $ 828.60. The 20-day EMA is turning up slightly and the RSI is at 56, showing that the bulls are trying to get the upper hand.
The first sign of weakness will be a breakout and close below the 20-day EMA. The bears will then seek to bring the price below the 50-day SMA and hold it. Such a move could result in a fall to the strong support at USD 510.
Solana (SOL) fell below the support line of the symmetrical triangle again on Nov 28, but the bears were unable to sustain the lower levels. This suggests strong buying on a decline.
Daily SOL / USDT chart | Source: TradingView
The SOL / USDT pair broke above the 50-day SMA ($ 204) on November 29th and now the bulls will attempt to break the hurdle at the 20-day EMA ($ 212). If successful, the pair could rebound to the resistance line of the triangle, where the bears can be a major challenge.
A break and close above the resistance line would indicate that the correction may be over. After that, the pair can rebound to $ 240 and up to $ 259.90.
Conversely, if price breaks down from the 20-day EMA, the bears will try again to move below the support line and hold it. Sales could accelerate on a breakthrough and close below the 100-day SMA ($ 172).
Cardano (ADA) is on a downward trend. Price bounced off $ 1.41 on November 28, but the bulls are struggling to hold higher levels.
Daily ADA / USDT Chart | Source: TradingView
The 20-day EMA ($ 1.78) continues to fall and the RSI is near the oversold zone, showing that the bears are in control. If the price drops from current levels, the bears will seek to push the ADA / USDT pair below $ 1.40.
If this succeeds, the downtrend can continue with the next target at USD 1.20. The bulls need to push and hold price above the 20-day EMA to negate the bearish sentiment. After that, the pair can rebound to stiff resistance at $ 1.87.
The long tail of the Ripple (XRP) candle on November 28th shows active buying near the strong support at $ 0.85. The price has reached the psychological level at $ 1 which can now act as a resistance.
XRP / USDT daily chart | Source: TradingView
If the price is falling from current levels, it will show that the bears have turned USD 1 into resistance. After that, the XRP / USDT pair can drop to $ 0.85. A breakout and close below this level signal the beginning of a deeper correction to USD 0.70.
Alternatively, if the price rises above $ 1, the pair can rebound to the 20-day EMA ($ 1.05). This level could act as a strong resistance again, but if the bulls break this barrier the pair can rebound to the 50-day SMA ($ 1.10).
Polkadot (DOT) bounced off $ 32.21 on Nov 28, showing that the bulls are trying to defend strong support at $ 32, with the rally poised to sell at the 100-day SMA ($ 37.16 ) shows that the bears are selling during the pullbacks.
DOT / USDT daily chart | Source: TradingView
If the price drops from current levels or a collapse of $ 38.70, the bears will attempt to prolong the decline. A break and close below $ 32 could usher in the next phase of the decline with a target of $ 26.
The 20-day EMA ($ 40.41) continues to fall and the RSI is in negative territory, showing that the bears have the upper hand. The bulls will need to push and hold the DOT / USDT pair above a break of $ 38.70 to break the bearish view.
Dogecoin (DOGE) bounced off the USD 0.19 support on Nov. 28, showing that the bulls are consolidating lower levels. Buyers pushed the price above the $ 0.21 resistance on November 29, but failed to break the barrier at the 20-day EMA ($ 0.22).
Daily DOGE / USDT Chart | Source: TradingView
The long wick on the candlestick on November 29th shows that sentiment remains negative and that traders are selling in rallies. If the price stays below $ 0.21, the bears will take another step to push the price below $ 0.19. If so, the DOGE / USDT pair may fall to the support at $ 0.15.
Contrary to this assumption, if the bulls push and hold price above the 20-day EMA, it will signal a change in the short-term trend. The pair can then climb to the 100-day SMA ($ 0.24) and gain momentum once this resistance is overcome.
Avalanche (AVAX) bounced off the 20-day EMA ($ 106) on November 27th and again on November 28th, but the bulls are struggling to sustain the rebound. This suggests that demand will dry up at higher levels.
AVAX / USDT daily chart | Source: TradingView
The shallow bounce increases the likelihood of a break below the 20-day EMA. If the bears drag the price below the 20-day EMA and the USD 100 support area, sales may intensify. After that, the AVAX / USDT pair may plunge to the 61.8% fib retracement level at $ 91.39.
Conversely, if price bounces off the support zone, the bulls will try to rally again. If buyers push the price above $ 120, the pair can climb to $ 130. A break and a close above this resistance could open the door for a retest of the all-time high of $ 147.
SHIBA INU (SHIB) has traded below $ 0.000040 for the past three days, but the bears failed to take advantage of that weakness and pushed the price down to the 100-day SMA ($ 0.000027). This shows a lack of salespeople on the lower levels.
Daily SHIB / USDT Chart | Source: TradingView
If the bulls push and hold the price above USD 0.000040, the SHIB / USDT pair may rise to the 20-day EMA (USD 0.00044). This level should again act as a strong resistance. If the price moves down from this level, it shows that sentiment is still negative and traders are selling on a rebound.
The bears will then take one more step to bring the price below $ 0.000035 and continue the downward trend. This negative view will be invalidated in the short term if the bulls push and hold the price above the 50-day SMA ($ 0.00046). After that, the pair can rally to $ 0.000052.
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