Bitcoin (BTC) volatility has decreased over the past few days. The standard deviation of daily Bitcoin returns over the last 30 and 60 days as calculated by the Bitcoin Volatility Index is 2.63%, the lowest volatility since November 2020.
In general, narrow ranges are often followed by steep climbs. In 2020, the period of low volatility in November was followed by a strong rally in mid-December, to a high of $64,854 on April 14, 2021.
However, it is not certain that the volatility extension will only be to the upside. The price can break out in either direction. Commentator Vince Prince warned that Bitcoin’s high leverage could result in a large number of long stops if it breaks the $40,000 support.
Can bitcoin start a fresh move higher or will the bears pull the price below the support and trigger a sell-off in altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin has been trading near the 20-day EMA ($44,181) for the past few days. Although the bulls failed to propel the price above this resistance, a small benefit is that they did not lose much ground.
BTC/USDT daily chart | Source: TradingView
If the price surges up from the current levels or $41,725.95, the bulls will make another move to clear the overhead resistance at the 20-day EMA and the horizontal resistance at $45.456.
If that is the case, the pair can rally to the 50-day SMA ($47,680), where the bulls could face renewed strong bear resistance. A break and close of this resistance can propel the pair to $52.088.
Conversely, if the price falls below $41,725.95, the BTC/USDT pair can drop to the strong support at $39,600. This is an important level for the bulls to defend because if it is broken, selling can increase and the pair can drop to $30,000.
Ether (ETH)’s rebound from descending channel support has stalled near the 20-day EMA ($3,439), showing that sentiment remains bearish and traders are selling on the rallies.
ETH/USDT daily chart | Source: TradingView
Now the bears will try to pull the price below $3,188. If they succeed, the ETH/USDT pair can drop to $2,928.83. This is a key support to watch out for as if it breaks the decline can extend to $2,652.
Contrary to this assumption, if the price turns up from the current levels and breaks above the 20-day EMA, the bulls will attempt to push the pair above the channel’s resistance line. In that case, the pair can rally to $4,200.
Binance Coin (BNB) failed to break the resistance line of the descending channel on Jan. 16. This could prompt short-term traders to sell and pull the price below the 20-day EMA ($488).
Daily BNB/USDT Chart | Source: TradingView
If the bears sink the price below $466.50, the BNB/USDT pair can drop towards the channel’s support line. The flat moving averages and the RSI are just below the middle, showing a balance between bulls and bears.
If the price recovers from $466.50, the bulls will make another attempt to push the price above the channel and the 50-day SMA ($530). If this succeeds, this signals a possible trend reversal. After that, the pair can rally to $572.
Cardano (ADA) broke out and closed above the 50-day SMA ($1.34) on Jan. 16, showing the bulls are attempting a return. Now the price can reach the resistance line of the descending channel.
Daily ADA/USDT Chart | Source: TradingView
The moving averages are preparing for a bullish cross and the RSI has jumped into positive territory, showing that bulls have the upper hand in the near term. When buyers push and hold the price across the channel, it signals a trend reversal.
First, the ADA/USDT pair can rally to $1.87 and if that level is conquered, the next move could be to $2.47. On the other hand, if the price turns down from the resistance line, the pair can drop to the moving averages.
Solana (SOL) continues to trade within a descending channel. The bulls attempted to push the price above the 20-day EMA ($154) on Jan 13 but failed. This shows that the bears are selling on every small rally.
Daily SOL/USDT chart | Source: TradingView
Now, the bears will attempt to sink the price below the $130 support. If they succeed, the SOL/USDT pair can drop to the strong support at $116. This is an important level for the bulls to defend as a break below it could push the pair to the channel support line.
Contrary to this assumption, if the price turns up from current levels and breaks above the 20-day EMA, the pair can rally to the channel’s resistance line. A break and close above the channel signals a possible trend reversal.
Ripple (XRP) traded between the 20-day EMA ($0.79) and the $0.75 support. This pressure will likely end soon.
XRP/USDT daily chart | Source: TradingView
If the price drops below $0.75, the XRP/USDT pair can resume the downtrend and drop to $0.69, followed by a drop to $0.60. The moving averages are sloping down and the RSI is in the negative territory, showing an advantage for the bears.
Contrary to this assumption, if the price surges up from $0.75 and breaks above the moving averages, it will show consolidation at lower levels. After that, the pair could start its march north with strong overhead resistance at $1.
Terra (LUNA) failed to scale and sustain above the 61.8% Fib retracement level at $87.88 on Jan 15-16. This may have triggered profit booking by the short-term bulls.
Daily LUNA/USDT Chart | Source: TradingView
The price has fallen to the 20-day EMA ($80.17), which could act as a support. If the price surges up from the current levels, the bulls will make another attempt to push and sustain the LUNA/USDT pair above $87.88.
If successful, the pair can rally to the 78.6% Fib retracement level at $94.80. Also, if the price breaks below both moving averages, it shows that traders are in a hurry to get out. After that, the pair can drop to $68.33.
Polkadot (DOT) surged above the 20-day EMA ($26.90) on Jan. 12, but the bulls failed to push the price above the 50-day SMA ($28.15). This may have attracted profit booking from short-term traders.
DOT/USDT daily chart | Source: TradingView
The bears pulled the price back below the 20-day EMA on Jan. 17. If the sellers sink the price below $25.45, the DOT/USDT pair can drop to the strong support at $22.66.
The 20-day EMA is flat and the RSI is just below the middle, indicating an equilibrium between supply and demand. This suggests that the pair could stay in the range between $22.66 and $32.78 for a few more days.
If the price turns up from the current levels and scales above the 50-day SMA, the pair can rally to $32.78. The bulls need to clear this barrier to signal the start of a fresh move higher.
Avalanche (AVAX) reversed from the 20-day EMA ($95) on Jan. 16, showing that the bears continue to defend this level aggressively. If the price stays below the symmetrical triangle uptrend line, the next stop can be $75.50.
AVAX/USDT daily chart | Source: TradingView
The moving averages are sloping down and the RSI is in the negative territory, showing that the bears have the upper hand. A close and below $75.50 will complete a descending triangle pattern that could signal the start of a new downtrend.
The AVAX/USDT pair can drop to $57.02 and then $50. This negative view will be invalidated if the price rises from the current levels and breaks the downtrend line. After that, the pair can rally to $128.
Dogecoin (DOGE)’s failure to surge and sustain above the $0.19 resistance on Jan. 15 may have attracted profit booking from short-term traders. This pushed the price down to the 20-day EMA ($0.16).
The flat 20-day EMA and the RSI just below the midpoint are signaling near-term consolidation. If the bears turn down and sustain the price below the moving averages, the DOGE/USDT pair can drop to $0.13.
On the other hand, if the price recovers from the current levels, the bulls will make another move to push and sustain the pair above $0.19. If this is the case, it indicates the start of a new rally.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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