Bitcoin has seen an uptick in volumes in the new year. A report by cryptocurrency market research firm Arcane Research shows that 7-day average daily trading volume has surged 126% in a week. Along with Bitcoin trading volume, the CME Bitcoin futures contract has also seen increased activity. The Bitcoin futures open interest has skyrocketed to a seven month high, which is only behind the peak seen at the end of June.
A pick up in volume and open interest with rising prices or even if prices remain range-bound is usually a sign of accumulation by the stronger hands. This could result in a further up move in Bitcoin in the next few days.
While several indicators paint a bullish picture for Bitcoin prices, Tone Vays has maintained a cautious stance because the BitMEX funding rate has still not turned bullish. Vays considers the funding rate to be a reliable lead indicator.
Daily cryptocurrency market performance. Source: Coin360
The Chinese government officials are keenly studying about cryptocurrencies. This was confirmed when a 200-page manual titled “Digital Currency: A Reader for Cadres” was sent for second print just after three months of its initial release.
While the data is encouraging and points to a possible uptick in Bitcoin and other major cryptocurrencies, let’s see if the setup on the charts also projects a rally.
BTC/USD
Bitcoin (BTC) has been consolidating above $7,856.76 for the past few days. This suggests that bulls are in no hurry to close their positions. The 20-day EMA is sloping up and the RSI is in the positive territory, which suggests that the path of least resistance is to the upside.
BTC USD daily chart. Source: Tradingview
The BTC/USD pair is likely to pick up momentum on a break above $8,452.84. Above this level, a move to $9,500 and above it to $10,360.89 is possible. The traders can maintain the stop-loss on the long positions at $6,800. We shall recommend trailing the stops higher after the price sustains above $8,452.84.
Contrary to our assumption, if the bears sink the price below $7,856.76 and the 20-day EMA, it will indicate a lack of demand at higher levels. If the price re-enters the range, a drop to $7,000 is possible. We anticipate a sharp move within this week.
ETH/USD
Ether (ETH) is moving up in an ascending channel. It is facing resistance close to $148 levels. The bears are attempting to sink the price below the moving averages. If successful, it will drag the price to the support line of the channel.
ETH USD daily chart. Source: Tradingview
A breakdown of the channel and the support at $131.484 is likely to attract further selling. The next support on the downside is $125.
However, if the ETH/USD pair bounces off the moving averages, the bulls will make another attempt to scale above the overhead resistance zone of $151.829 to $157.50. As the price is struggling at higher levels, we suggest trailing the stops on the long positions to $128. Let’s reduce the risk.
XRP/USD
XRP bounced off the 20-day EMA on Jan. 10, which is a positive sign. However, the bulls could not carry the price to the overhead resistance at $0.2326, which shows a lack of demand at higher levels.
XRP USD daily chart. Source: Tradingview
The bears will now attempt to sink the price below the moving averages and the critical support at $0.20041. If successful, a drop to $0.18339 will be on the cards.
On the other hand, if the bulls defend $0.20041 support, the XRP/USD pair might remain range-bound for a few more days. The pair will pick up momentum on a break above $0.23260. Until then, we remain neutral on the pair.
BCH/USD
Bitcoin Cash (BCH) is struggling to break out of the overhead resistance at $270.15. However, the positive thing is that the bulls have not allowed the price to give up much ground.
BCH USD daily chart. Source: Tradingview
If the bulls can carry the price above $270.15 and sustain it, a rally to $306.78 is possible. The upsloping 20-day EMA and the RSI in the positive zone show that bulls are in command. The traders can trail their stops on the remaining long positions to $255.
Our bullish view will be invalidated if the bears sink the price below $258.26. This will increase the possibility of a dip to 241.85.
LTC/USD
Litecoin (LTC) has scaled and closed (UTC time) above the overhead resistance at $50, which is a positive sign. The upsloping 20-day EMA and the RSI in the positive territory indicate that bulls have the upper hand.
LTC USD daily chart. Source: Tradingview
If the price can sustain above $50, a rally to $60 and above it to $66 is possible. The LTC/USD pair might pick up momentum above $52.
Conversely, if the bulls fail to sustain the price above $50, a drop to $47.8264 is possible. If this support also cracks, the pullback can extend to the 20-day EMA. We suggest traders trail the stop loss on the long positions to $47.
EOS/USD
EOS has broken out of the downtrend line. This is the first closing (UTC time) above the line since July of this year. If the bulls can sustain the price above the downtrend line for three days, it will signal a possible change in trend.
EOS USD daily chart. Source: Tradingview
The 20-day EMA is sloping up and the RSI is in the positive zone, which shows that the bulls are in command. The next target to watch out for is $3.69.
However, if the bears sink the price back below the downtrend line, the EOS/USD pair can dip to $2.8695. If this support holds, the bulls might again attempt to push the price to $3.69. Our bullish view will be invalidated if the price slips below the 20-day EMA. The traders can trail the stop-loss on the remaining long positions to $2.85.
BNB/USD
Binance Coin (BNB) has been gradually moving up but it lacks momentum. This shows that the bulls are in no urgency to buy. The moving averages are on the verge of a bullish crossover and the RSI is in the positive territory, which suggests that bulls are attempting to make a comeback.
BNB USD daily chart. Source: Tradingview
If the price sustains above $14.5201, a move to $16.50 is likely. We anticipate momentum to pick up above $16.50.
Contrary to our assumption, if the bulls fail to defend the support at $14.5201, the BNB/USD pair can dip to $12.98 levels once again. Therefore, we suggest traders trail the stop-loss in the long position to $14.
BSV/USD
The pullback in Bitcoin SV (BSV) from the recent highs was shallow, which is a positive sign. This shows that the bulls are using dips to buy and are in no hurry to book profits. If the bulls can now scale the price above $177 to $188.69 resistance zone, a rally to record highs is possible.
BSV USD daily chart. Source: Tradingview
On the other hand, if the bulls fail to propel the price above the overhead resistance zone, the bears will attempt to sink the price back below $155.38. If the BSV/USD pair slips below $147.28, it can quickly drop to $127.102. Therefore, traders can trail the stop loss on the remaining long positions to $145.
XMR/USD
After holding above $57.1199 for the past few days, Monero (XMR) is currently under attack from the bears. The failure to the bulls to carry the price toward $67.02 is attracting selling. If the price slips and closes (UTC time) below $57.1199, a drop to the 20-day EMA is possible.
XMR USD daily chart. Source: Tradingview
The 20-day EMA is sloping up and the RSI is in the positive zone, which suggests that bulls have the upper hand. If the price bounces off the current levels or the 20-day EMA, the bulls will again attempt to push the price above $60.
We do not find any reliable buy setups at the current levels, hence, we remain neutral on the XMR/USD pair.
TRX/USD
Tron (TRX) broke out of the descending channel on Jan. 10 and has sustained above it since then. However, it has failed to pick up momentum and rally towards $0.0163957, which suggests a lack of buyers at higher levels.
TRX USD daily chart. Source: Tradingview
The bears are currently attempting to sink the price below the moving averages. If successful, the TRX/USD pair can again dip to $0.0126948.
On the other hand, if the price bounces off the moving averages, the bulls will again try to push the price above $0.0163957. If successful, the pair is likely to move up to $0.020 and above it to $0.0234.
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.