Several DeFi tokens saw their prices breakout on Feb. 4 as Bitcoin (BTC) and Ether (ETH) prices traded sideways for the day. Aside from the general bullish trend permeating the DeFi sector, positive comments from big-name investors touting the benefits of blockchain technology and DeFi appear to be lifting sentiment throughout the sector.
Currently, Bitcoin price is still struggling to reclaim the $38,000 level and according to Cointelegraph analyst Marcel Pechman, top traders may have added to their short positions as BTC rallied toward $38,000 on Feb. 3.
Elon Musk made waves again as his “DOGE” tweet resulted in a sharp volume spike which sent Dogecoin (DOGE) into a 48% rally to $0.054. XRP price also broke out, rallying 12.45% to a daily high at $0.4365.
Universal Market Access (UMA) saw its price explode by 158% to reach a new all-timeat $44.25 before correcting to its current value of $33.13. Decentralized exchange liquidity provider 0x (ZRX) also spiked 70% to a new 2021 high at $1.35.
AAVE vs. MKR vs. COMP percentage growth 4-hour chart. Source: TradingView
DeFi lending platforms AAVE, Compound (COMP) and Maker (MKR) all established new all-time highs as their prices have spiked 46.68%, 36.6% and 22.69% respectively.
Traditional markets rally higher
Traditional markets also caught a boost as stocks saw their fourth straight day of gains led by tech stocks like eBay (EBAY), which saw its price increase by 5%, and PayPal (PYPL) whose shares rallied 7%.
The S&P 500, Dow and NASDAQ all closed the day well into the green, up 1.09%, 1.08% and 1.23% respectively.
DeFi attracts mainstream attention
Increased attention from business leaders like Mark Cuban and institutions such as Grayscale Investments has brought increased attention to the crypto sector and also highlights the rapidly increasing involvement of traditional finance in the cryptocurrency ecosystem.
With MicroStrategy CEO Michael Saylor offering a ‘Bitcoin Bootcamp’ to more than 1,400 publicly traded companies over the past 2 days, the recent price movements and increased trading volume seen today could be the start of wider adoption and increased inflows into Bitcoin and the emerging DeFi ecosystem.
The overall cryptocurrency market cap now stands at $1.13 trillion and Bitcoin’s dominance rate is 60.9%.
Decentralized finance is rapidly becoming a cornerstone of the cryptocurrency sector but the ecosystem has become increasingly centralized on the Ethereum network and this is causing the entire sector to be plagued by high gas fees and slow transaction confirmations.
This explosive rise in gas fees is leading users to look for other options and one alternative is Flamingo finance. The protocol is built on Neo and designed with a focus on governance and interoperability.
Interoperability has also emerged as a prominent issue in the crypto sector as separate blockchains and isolated DeFi platforms need a way to communicate with each other and transact across protocols.
Value pegging when dealing with cross-chain assets has proven a challenge for protocols thus far and has recently become a focus of Flamingo developers.
Flamingo (FLM) price recently set a new high for 2021 as the DeFi protocol saw a surge in trading volume on Feb. 1 that helped its token double in value overnight.
At the start of 2021, FLM price was trading at $0.12 after falling from its previous all-time high of $1.59 in September 2020 at the tail end of the summer of DeFi. Since bottoming out in January, the price has steadily increased to its current value of $0.35.
Three reasons for the recent 200% increase in the price of FLM include the recent expansion of governance features, having the first-mover advantage of DeFi on the Neo blockchain, and record-high trading volume.
Trading volume spikes
Throughout the month of January, the 24-hour trading volume for FLM fluctuated between $6 million to $20 million. Between Jan. 31 and Feb. 1 purchasing volume saw more than a four-fold increase from the previous day putting in a record high 24-hour value of $93.4 million which pushed the price from $0.21 to $0.31.
A closer look at recent announcements from the project shows that the motivating factor behind the surge in volume was a new governance proposal that was released to the community to vote on.
Since the vote ended, FLM’s daily trading volume has dropped $29.7 million, the second-highest amount since September 2020.
As shown above, the price and volume spike also coincided with an increase in Twitter volume as community members responded positively to the announcement.
New governance features attract users
Coinciding with a spike in the buying volume of FLM was the release of the latest governance proposal for the Flamingo community, otherwise known as a Flamingo Improvement Proposal (FIP). This marks the second voting opportunity for members of the platform and is focused on redesigning the asset flow of the Flamingo platform in an effort to improve overall usability and asset interoperability.
According to Flamingo’s website, the proposed updates will help evolve the “sophisticated process of asset synthesization established at the initial launch,” to a more innovative design that will “optimize the cross-chain asset flow process while maintaining value pegging to the original asset.”
The redesign goals include: Restoring the Value pegging between cross-chain assets and their underlying original assets; Improving the robustness and future-proof-ness of Flamingo’s asset flow design; and continuing to develop Flamincome as the ultimate yield booster on Ethereum.
Using Neo blockchain gives Flamingo the first-mover advantage
Flamingo appears well-positioned to benefit from the continued expansion of decentralized finance and has the opportunity to corner the market on the Neo blockchain as it is currently the largest and most developed DeFi platform on the network.
Tokens available for staking include wrapped forms of Bitcoin (BTC), Ether (ETH) and Tether (USDT), as well as NEO, Ontology (ONT) and Switcheo (SWTH). Liquidity on the platform is currently around $100 million with a 24-hour volume of $3.4 million.
Liquidity and 24-hour volume on Flamingo. Source: Flamingo Finance
As token holders look for options to escape high gas fees on the Ethereum network, platforms like Flamingo, which offer the ability to transact in both BTC and ETH for the cost of 0.01 GAS, could see an influx of activity as a result.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
On Feb. 2 Ether (ETH) saw its price breakout to a new all-time high at $1,555 as increased activity in the derivatives market provided clear signals that traders were bullish on the long-term prospects of the largest altcoin by market capitalization.
Bitcoin price also saw a bullish breakout as it finally crossed above the $35,000 resistance and currently trades for $36,700
Prominent business personalities like Elon Musk, Michael Saylor and Mark Cuban continued to engage the public with discussions revolving around the benefits of blockchain technology and decentralized finance. In remarks to the reddit group r/Wallstreetbets, Cuban said that “stocks will be on the blockchain in the future.”
Circle’s USD Coin (USDC) has now been integrated with the Stellar blockchain, enabling the stablecoin to be transacted on the Stellar network and possibly take some of the strain of the clogged Ethereum network.
USDC price vs. the number of transactions per sec. Source: Glassnode
Data from Glassnode shows USDC transaction volume on Ethereum has steadily been increasing over the past year as the Coinbase backed coin steadily gains ground on Tether (USDT). Utilizing Stellar blockchain will greatly reduce USDC transaction fees and free up space on the Ethereum network.
Traditional markets rise as meme stocks tumble
The hype surrounding r/Wallstreetbets stocks like GameStop (GME), AMC and BlackBerry (BB) dwindled as their prices extended the losses experienced on Feb. 1.
While the “meme” stocks saw their prices plunge, the S&P 500, Dow and NASDAQ all put on strong performances for the day and closed up 1.39%, 1.57% and 1.56%. Silver price dropped 8.44% to $26.60.
Strong price performances were also seen from numerous altcoins as the spike in Ether price increased optimism across the sector. Litecoin (LTC) saw a price jump of 13% and currently trades at $153.50, while Maker (MKR) and Solana (SOL) extended their strong performance as each gained nearly 15%.
The overall cryptocurrency market cap now stands at $1.09 trillion and Bitcoin’s dominance rate is 62.3%.
A new report by CoinShares suggests Bitcoin (BTC) has garnered 97% of the total crypto inflows in 2021.
The recent correction in Bitcoin price does not seem to have deterred crypto investors as CoinShares data shows a record $1.3 billion in crypto product inflows over the past week. This suggests that investors are accumulating on the dips rather than attempting to chase higher prices.
Another space that has taken giant strides in the past few months has been the decentralized finance sector. While bond yields across the world are reeling near-zero levels, the attractive yield farming opportunities in DeFi and flash loans have attracted investors, boosting the total value locked to $26.1 billion on Jan. 25.
Unless the markets are gripped in panic, there are always certain sections that are in a bull phase. The tokens selected today have also outperformed the broader market in the short term.
Let’s investigate some of the fundamental reasons behind their bullish moves and pinpoint the critical levels to watch out for.
CELO/USD
Transferring money seamlessly across borders without having to pay high fees is a necessity in today’s world and Celo (CELO) aims to ease this process. The project is gradually gaining adoption as there is now $30 million worth of cUSD in circulation.
After the success of cUSD, the platform plans to launch a new stablecoin that is pegged to the euro in the next two months. Similar to its cUSD, the euro stablecoin will use a basket of crypto assets to keep the price closely pegged to the underlying asset.
Celo’s partnership with KardiaChain, Kadena, and Paychant opens several new opportunities for its users. The community also cheered Celo’s listing on Binance exchange on Jan. 5 and the altcoin broke out strongly after listing.
Celo recently announced a rewards program and starting Jan. 25 users who maintain a certain minimum average monthly balance of cUSD will earn rewards in CELO on a first-come, first-serve basis.
Along with the products, the credibility of the project is also important for its success. On that front, Celo’s inclusion in the World Economic Forum’s Global Future Council on Cryptocurrencies may have worked as a big positive.
CELO price surged from $1.752 on Jan. 12 to an intraday high at $3.922 on Jan. 22, a gain of 123% within ten days. The token is currently forming a rounding bottom pattern that will complete on a breakout and close above $4.50.
The CELO/USD pair has started a new uptrend and has been making a series of higher highs and higher lows. This suggests a bullish sentiment and traders are buying on dips. The moving averages are sloping upward and the relative strength index (RSI) is in the overbought zone, indicating an advantage to the bulls.
The pair does not have any major resistance until it reaches $4.30 but the bears are unlikely to give up easily. They will try to stall the current up-move in the $3.60 to $3.922 zone. If they succeed, the pair could drop to the 20-day exponential moving average ($2.528) where buyers are likely to step in.
A strong rebound off the 20-day EMA will keep the uptrend intact and the bulls will then again try to push the price to $4.30. A breakout and close above the $4.30 to $4.50 resistance zone could start the next leg of the uptrend.
This bullish view will invalidate if the pair breaks below the 20-day EMA. In such a case, the pair could drop to the 50-day simple moving average ($1.95).
XVS/USD
The DeFi space continues to hold strong even as major cryptocurrencies are witnessing a sharp correction. This shows users’ confidence in DeFi and the ability of the sectors’ projects to offer much better returns compared to altcoins.
Venus Protocol (XVS) is exclusively on Binance Smart Chain, therefore it did not suffer from the detrimental effects of high gas fees that negatively impacted DeFi projects in early January. This could have attracted some traders to jump over to Venus.
Decentralization is one of the key factors in crypto and Venus completed the transition on Jan. 15. The protocol will now be governed by the community, which is a welcome step in the right direction. The positives of the past few days may have resulted in its total value locked to jumping to $400 million.
XVS has risen from an intraday low at $3.945 on Jan. 18 to an intraday high at $12.90 today, a 227% rally within a short span. The momentum picked up after the bulls pushed the price above the stiff $5 to $6 overhead resistance zone on Jan. 23.
Some profit-booking was seen on Jan. 25 but the bulls purchased the dip and pushed the price above $9.89 today to resume the uptrend. Crossing into double digits seems to have ignited the bulls who have continued to buy at higher levels.
The XVS/USD pair could now rally to $15 and then to $20. However, the recent rally has pushed the RSI deep into the overbought territory, which increases the risk of a correction or consolidation.
If the price turns down from the current levels, it is likely to find support at $10. A strong rebound off this level will suggest the previous resistance has flipped to support and the bulls will then try to resume the uptrend. On the contrary, if the price breaks below $10, the correction could deepen to $8.
FTM/USD
FantomFinance (FTM) is another DeFi project that is acting as a bright spot that is leading the market higher.
Fantom recently entered into a partnership with Injective Protocol that is expected to increase adoption as users can access assets on both chains. Together both teams plan to bring new and innovative synthetic products to the market, tapping the ever-growing popularity of synthetics and decentralized derivatives trading.
This offers an opportunity for the traders to benefit from trading markets that are in a trend rather than getting stuck to a specific asset class. FTM’s recent listing on SushiSwap also seems to have been cheered by the community.
FTM has soared from an intraday low at $0.0241 on Jan. 22 to an intraday high at $0.0678 today, a 181% rally within five days. The bulls had pushed the price above the $0.05665 resistance on Jan. 24 and 25 but could not sustain the higher levels.
The bears attempted to start a correction on Jan. 25 but the bulls were in no mood to relent. They have aggressively propelled the price to a new all-time high today. However, the sharp rally of the past few days has pushed the RSI deep into the overbought territory, which could start a correction or consolidation.
If the price turns down from the current levels but rebounds off the $0.05665 support, it will suggest the previous resistance has flipped to support. The FTM/USD pair may then start the next leg of the uptrend that could reach $0.0850.
Conversely, if the bears sink the price below $0.05665, the pair could drop to $0.05 and then to $0.045. A break below this support could signal a change in trend.
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.
After the recent correction, Bitcoin (BTC) will need aggressive inflows to absorb the possible selling from the short-term traders and momentum players as the price nears $40,000. In the past few months, Grayscale Investments has been one of the major entities responsible for the pickup in demand.
However, JPMorgan Chase analysts pointed out in a recent note that Grayscale inflows “appear to have peaked” on a four-week rolling average basis. Without a strong tailwind from the institutional investors, many analysts believe Bitcoin may not break above $40,000.
The failure to resume the uptrend does not mean Bitcoin will plunge and enter a bear market similar to the one seen in 2018. Lower levels continue to attract investments from institutions, and the latest to disclose a position in Bitcoin is Nevada-based crypto mining firm Marathon Patent Group. The company has purchased $150 million worth of Bitcoin at an average price of $31,168.
Even if Bitcoin remains range-bound for the next few days, select altcoins could continue to move toward new highs.
Let’s study the charts of the top 10 cryptocurrencies to spot the ones that are in a bull trend.
BTC/USD
Bitcoin (BTC) broke above the 20-day exponential moving average ($33,851) today, indicating accumulation at lower levels. The current up-move could rise to the downtrend line where the bulls are likely to face stiff resistance from the bears.
The flat 20-day EMA and the relative strength index (RSI) just above the midpoint suggest a balance between supply and demand.
If the price reverses direction from the downtrend line, the bears will again try to sink and sustain the BTC/USD pair below the $30,450 support. If they succeed, the pair will complete a descending triangle pattern, which has a target objective of $18,940.37.
Contrary to this assumption, if the bulls drive the price above the downtrend line, the aggressive bears who may have sold short in the past few days could cover their positions, resulting in a short squeeze. Above the downtrend line, the pair could rise to $40,000 and then to $41,959.63.
ETH/USD
Ether (ETH) surged above the $1,350 resistance on Jan. 24 and followed it up with another up-move today, hitting a new all-time high at $1,473.096. However, the long wick on today’s candlestick suggests profit-booking at higher levels.
The RSI has also formed a negative divergence, which suggests the momentum may be weakening. If the bears sink the price below the $1,350 support, the ETH/USD pair could drop to the 20-day EMA ($1,195).
A strong rebound off the 20-day EMA will indicate that the bulls are accumulating on dips. The buyers will then try to resume the uptrend. If they can push the price above $1,500, the pair could rise to $1,675.
On the contrary, if the bears sink the price below the uptrend line, the pair may drop to the next support at $840, signaling a trend change.
DOT/USD
Polkadot’s DOT has formed a Doji candlestick pattern today with a long wick, which suggests the bears are attempting to stall the current up-move at $19.40. However, the rising moving averages and the RSI near the overbought territory suggests the bulls are in control.
If the bulls do not give up much ground from the current level, it will suggest the buyers are absorbing the supply, and that will increase the possibility of a breakout above $19.40. If that happens, the DOT/USD pair could resume the uptrend and rally to the next target objective at $24 and then to $30.
Contrary to this assumption, if the bears sink the price below $16.7951, the pair may drop to the 20-day EMA ($14.51). A strong rebound off this support will keep the uptrend intact, and the bulls will again attempt to resume the uptrend. On the other hand, if bears sink the price below the 20-day EMA, it will suggest a trend change.
XRP/USD
The daily trading range for XRP has shrunk over the past two days. The gradually downsloping moving averages and the RSI in the negative territory suggest a minor advantage to the bears.
The Doji candlestick pattern on Jan. 24 and today signals indecision among the bulls and the bears. If the uncertainty resolves to the downside and the bears sink the price below $0.25, the XRP/USD pair will complete a bearish descending triangle pattern that could result in a drop to $0.169.
On the contrary, if the pair rises from the current levels and breaks above the downtrend line, it could result in a rally to $0.385.
ADA/USD
Cardano’s Ada continues to trade inside the ascending channel and the price has been sustaining above the $0.34 support for the past two days, which is a positive sign. This suggests the traders are not hurrying to book profits on relief rallies.
The bulls will now try to push the price to $0.3971995. A breakout and close above the $0.40 resistance could start the next leg of the up-move that could reach $0.50. The ADA/USD pair could further pick up momentum if the bulls can thrust the price above the channel.
Both moving averages are sloping up and the RSI is above 60, which suggests the bulls have the upper hand. Contrary to this assumption, if the pair turns down from the current levels and breaks below $0.34, it will suggest traders are booking profits on rallies. A break below the support line of the channel may signal a trend change.
LINK/USD
Chainlink’s LINK soared to a new all-time high on Jan. 23, but the bulls have not been able to build upon the momentum since then. The altcoin formed a hanging-man candlestick pattern on Jan. 24, which suggested the bulls may be tiring out.
The negative divergence on the RSI also indicates that the bullish momentum may be weakening.
The buyers attempted to resume the up-move today but the LINK/USD pair is facing profit-booking at higher levels. If the pair breaks below $23.1612, a drop to the critical support at $20.1111 is possible.
On the other hand, if the pair turns up from the current level and rises above $26, it will suggest the bulls are back in command. The next target on the upside is $30.
LTC/USD
Litecoin (LTC) bounced off the 50-day simple moving average ($126) on Jan. 22 and broke above the 20-day EMA ($143) today, but the long wick on the candlestick suggests the bears are aggressively defending the downtrend line.
If the price turns down from the downtrend line, the bears will again try to break the $120 support. If they succeed, the LTC/USD pair will complete a bearish head-and-shoulders pattern that may pull the price down to $100 and then to $70.
Conversely, if the bulls can push the price above the downtrend line, the pair may rise to $165.9709 and then retest the $185.5821 resistance. A breakout of this level could resume the uptrend.
However, the flat 20-day EMA and the RSI just above the midpoint are not signaling a clear advantage either to the bulls or the bears. The indicators suggest the pair may consolidate for a few more days.
BCH/USD
Bitcoin Cash (BCH) is currently attempting to rise and sustain above the 20-day EMA ($454). If successful, the altcoin could rise to $539. A breakout and close above this resistance could result in a retest of $631.71.
Conversely, if the bulls fail to sustain the price above the 20-day EMA, the bears may again sink the price to the support of the range at $370. A breakdown and close below $353 could pull the price down to $275.
The indicators are currently not indicating an advantage to either the bulls or the bears. The flattish 20-day EMA and the RSI near the midpoint suggest the BCH/USD pair may extend its stay inside the range for a few more days.
BNB/USD
Binance Coin (BNB) bounced off the support line of the ascending broadening wedge pattern on Jan. 22, and the bulls have pushed the price above the 20-day EMA ($41), which is a positive sign.
If the bulls can push and sustain the price above $43.0992, the BNB/USD pair could retest the all-time high at $47.2187. A breakout of this resistance could resume the uptrend, with the next target objective at $50.
The 20-day EMA is sloping up gradually and the RSI is just above the midpoint, suggesting a marginal advantage to the bulls.
This positive view will be invalidated if the pair turns down from the current levels and breaks below the support line. If that happens, the bearish pattern will complete and could result in a fall to $35.69 and then $30.
XLM/USD
Stellar’s Lumens (XLM) re-entered the $0.26 to $0.325 range on Jan. 22 and has been sustaining above the 20-day EMA ($0.265) since then. However, the bulls have failed to sustain the recovery and push the price toward the $0.325 resistance, which suggests a lack of demand at higher levels.
If the XLM/USD pair fails to rise and sustain above $0.282 in the next few days, the bears may again try to sink the price below the $0.26 support. If they succeed, the pair may drop to the 50-day SMA ($0.211).
Such a move will suggest the momentum has weakened. The flattish 20-day EMA and the RSI just above the midpoint also indicate a balance between supply and demand.
If the bulls push the price above $0.282, the pair may rise to $0.30 and then to $0.325. The bears may mount a stiff resistance at this level, and if the pair turns down from $0.325, it may continue the range-bound action for a few more days.
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.
As Bitcoin price trade sideways, traders are keeping an eye out for new purchases from institutional investors in order to gauge whether BTC‘s correction is over.
MicroStrategy’s recent purchase of 314 Bitcoin at an average price of $31,808 is a mild sentiment booster but it may not be enough to arrest the decline if buyers do not step in and sustain their purchases at higher levels.
A recent timezone analysis by QCP Capital divided the Asia and U.S. trading sessions into a 12-hour bracket and found that since March 2020 Bitcoin price had risen during U.S. hours due to sustained buying from institutional investors. However, this buying momentum from the U.S. has shown signs of exhaustion for the first time since Bitcoin topped out about two weeks ago.
While keeping an eye on institutional investor inflow is a good strategy, it’s also important to monitor what is happening on the retail side. In the past few months, retail investor volume has picked up and this is supporting equity markets across the globe.
Bitcoin may be struggling to reclaim its all-time high but during this time a handful of altcoins have rallied to new highs. This shows that retail traders are currently focusing on altcoins.
Let’s study the charts of the top-5 cryptocurrencies that could trend in the next few days.
BTC/USD
Bitcoin’s bounce off the 50-day simple moving average ($28,632) is facing resistance near the 20-day exponential moving average ($33,775). The failure to rise above the 20-day EMA is a negative sign as it shows a possible change in sentiment from buying on dips to selling in each rally.
The 20-day EMA has started to slope down and the relative strength index (RSI) has been trading below the 50 level, suggesting that the bears are trying to make a comeback. The inside day candlestick pattern on Jan. 23 and today shows indecision among the bulls and the bears.
If the uncertainty resolves to the downside, the bears will try to establish their supremacy and sink the BTC/USD pair below the 50-day SMA. If they succeed, it could result in a deeper correction to the 50% Fibonacci retracement level at $25,897.42 and then to the 61.8% retracement level at $22,106.73.
On the contrary, if the bulls thrust the price above the 20-day EMA, the pair may rise to the downtrend line, where they are again likely to face stiff resistance. If the price turns down from this level and breaks below the 20-day EMA, it will suggest the bears are selling on rallies, but if the bulls push the price above the downtrend line, it will indicate the correction may be over.
A close above the downtrend line will increase the possibility of a retest of the all-time high at $41,959.63. A break above this resistance could result in a rally to $50,000.
The downsloping moving averages and the RSI in the negative zone on the 4-hour chart shows the bears have the upper hand. The price action shows a bearish descending triangle formation that will complete on a breakdown and close below $30,450. The pattern target of this setup is $18,940.37.
Contrary to this assumption, if the bulls can propel the price above the moving averages, the pair could rise to the downtrend line. This is a critical resistance to watch out for because a break above it will invalidate the bearish setup. If that happens, it could catch the aggressive bears on the wrong side, resulting in a short squeeze that could drive the price to a new all-time high.
ETH/USD
Ether (ETH) has climbed above the $1,300 overhead resistance, and the bulls are attempting to resume the up-move. The upsloping moving averages and the RSI above 61 suggest the bulls are in control.
If the price sustains above $1,300, the ETH/USD pair could retest the all-time high at $1,438.318. A breakout and close above this resistance may start the journey to the target objective at $1,675.
On the other hand, if the price turns down from the overhead resistance, the pair may drop to the 20-day EMA ($1,166). A rebound off this support will increase the possibility of the resumption of the uptrend.
However, if the next drop breaks below the uptrend line, it will indicate a possible change in trend. The next support on the downside is at the 50-day SMA ($882).
The bears are currently attempting to defend the $1,350 overhead resistance. If the price turns down from the current level, it could find support at the moving averages. A bounce off this level will suggest bulls are buying on every minor dip, and this will enhance the prospects of a breakout of $1,350.
Contrary to this assumption, if the bears sink the price below the moving averages, the pair could drop to the uptrend line. A break below this support will signal a change in sentiment and may result in a deeper correction.
DOT/USD
Polkadot (DOT) is currently range-bound between the high at $19.40 and the 38.2% Fibonacci retracement level at $14.7259. A consolidation near the all-time high is a positive sign as it shows traders are not rushing to book profits.
The bears are currently defending the overhead resistance at $19.40. This could extend the stay of the DOT/USD pair inside the range for a few more days
However, the upsloping 20-day EMA ($14.11) and the RSI near the overbought territory suggest the bulls have the upper hand. If buyers can drive the price above $19.40, the next leg of the up-move could begin. The first target on the upside is $24 and then $30.
This positive view will invalidate if the pair turns down and breaks below the 20-day EMA. Such a move could open the possibility of a deeper fall to the 61.8% Fibonacci retracement level at $11.8383.
The pair has turned down from the overhead resistance, which suggests the bears are unwilling to give up without a fight. The flattening 20-EMA and the RSI near the midpoint on the 4-hour chart shows a balance between supply and demand.
If the bears sink the pair below the 50-SMA, a drop to $16 and then to $14.7259 is possible. The bulls are likely to buy this dip and try to keep the price inside the range. The next trending move could start after the price breaks above $19.40 or sinks below $14.7259.
AAVE/USD
AAVE is in a strong uptrend and has been hitting new highs for the past few days, which shows traders continue to buy at every higher level. In an uptrend, the bulls buy the dips to the 20-day EMA and that was seen during the recent fall on Jan. 21.
The current leg of the uptrend has a target objective at $263.23 and then $294.229. The wick on today’s candlestick suggests bears are attempting to stall the rally near the psychological resistance at $250.
If the price turns down from the current level, the first support is at $200 and then at the 20-day EMA at $166. The upsloping moving averages and the RSI in the overbought zone indicate bulls are in command.
The first sign of weakness will be a breakdown and close below the 20-day EMA. Such a move will suggest that supply has exceeded demand from dip buyers and that could be a sign of a trend change.
The 4-hour chart shows the price is trading inside an ascending channel. If the price dips from the current levels, it could drop to the support line of the ascending channel where buyers are likely to step in.
A break below the channel could sink the price to the 20-EMA. A strong rebound off this support will suggest that bulls continue to accumulate on dips. However, a break below the moving averages will open the doors for a deeper correction.
SNX/USD
Synthetix (SNX) witnessed a sharp correction on Jan. 21 but it quickly recovered and is currently attempting to resume the uptrend. Aggressive buying near the 50% Fibonacci retracement level at $10.744 on Jan. 22 shows demand at lower levels.
Both moving averages are sloping up and the RSI has bounced from the midpoint, indicating the path of least resistance is to the upside. If the bulls can propel the price above $17.150, the next leg of the uptrend could begin.
The next target on the upside is $20 and then $24.083. However, if the price turns down from $17.150, the SNX/USD pair may dip to the 20-day EMA ($13.68), which is likely to act as strong support.
The 4-hour chart shows the bears are attempting to defend the $17 overhead resistance. If the price turns down from the current level, the pair could drop to the moving averages and then to $14. A consolidation between $14 and $17 will be a positive sign and increase the possibility of a break above $17.15.
Contrary to this assumption, if the price breaks below $14, the correction could deepen to $11.263. Such a move will suggest the bullish momentum has weakened. A break below $11.262 may pull the price down to the 61.8% Fibonacci retracement at $9.232 and then $7.880.
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.
