Bitcoin (BTC) has rallied nearly 40% so far in January, its best start to the year since 2013. The sharp upward move has turned on some bullish on-chain signals, according to on-chain analyst Cole Garner.
Usually, a sharp recovery from the bottom of the market, driven by the leader, is a sign that a strong hand can buy aggressively. This may be because traders believe that selling may be overdone in the near term or they find the price attractive.
After the initial runup, a quick correction can be expected, which will shake the weak hands. Next fall will also confirm whether Bitcoin has formed a bottom or not. If less is confirmed, some altcoins may start to outperform Bitcoin in the near future.
What altcoins show promise in the near term? Let’s study the chart of Bitcoin and select altcoins to see which ones can increase in the next few days.
BTC/USDT
Bitcoin has been trading above $22,800 since January 25, which indicates that the bulls are trying to turn the level into support.
The rising 20-day exponential moving average ($21,558) indicates that the bulls are in command but the relative strength index (RSI) in overbought territory indicates that the rally may be overextended in the near term.
If buyers push the price above $23,816, the BTC/USDT pair could start a northward march to $25,211. This level can act as a strong resistance.
On the downside, the 20-day EMA is an important level for bulls to defend because if it breaks, the pair may fall to psychological support at $20,000.
The RSI on the four-hour chart is forming a negative divergence indicating that buyers may be losing their grip. If the bulls want to assert their dominance, they need to push the price above the $23,816 resistance. That can start the next leg up and down.
On the contrary, if the price drops from the overhead resistance, the bear will try to pull the pair below the moving average. There is minor support at $22,715 but if this level breaks, the pair could retest $21,480.
LTC/USDT
Litecoin (LTC) exchange rate rose in the past few days. After a brief consolidation, buyers pushed the price above the $92 overhead resistance, indicating that the upside is intact.
The LTC/USDT pair may rally to the psychological level of $100 where bears may once again try to build a roadblock. If the bulls don’t give up too much from this level, the pair can extend its trip to $107. The rising 20-day EMA ($86) and the RSI near overbought territory indicate an advantage for buyers.
This positive view can be canceled if the price drops and falls below the 20-day EMA. The pair could then drop to $81 and later to $75.
A break and close above the $92 level indicates that the consolidation is over for the buyers. If the bulls can maintain the price above $92, the pair can move up to the $98 pattern target.
The Bears likely have other plans. They will try to drag the price below the $92 breakout level and trap the aggressive bulls. If it does, the pair could drop to $86. This is an important level for bulls to defend because a break below can shift the advantage in favor of bears.
AVAX/USDT
Avalanche (AVAX) rose above the resistance line on January 27 and reached the overhead barrier at $22 on January 28.
Bears tried to stall the recovery at $22 but the bulls did not seem in a hurry to book profits. This increases the chance of breaking above the overhead barrier. If that happens, the AVAX/USDT pair could accelerate to $30. There is a small resistance at $24 but it is likely to be scaled.
Another possibility is that the price goes down and retests the resistance line. If the price rebounds from this level, it will suggest that the bull has flipped to support. That could increase the prospect of a break above $22. Bears can gain the upper hand if the price dives below the 20-day EMA ($17).
The four-hour chart shows the pair has pulled back near the 20-dayEMA. If the price jumps from the current level, the bulls will try again to push the pair above the overhead barrier at $22. If this level is extended, the pair could rally to $24.
The first sign of weakness will be a break and close below the 20-EMA. That could give the bears a chance to come back. Sellers can gain the upper hand if they pull and sustain the pair below the resistance line.
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APT/USDT
Aptos (APT) has had a nightmare in the past few days. Usually, when an asset picks up momentum, it continues to move in the same direction for some time.
The APT/USDT pair declined from $20.40 on January 26 but the bulls tried to capture the pullback at $16.62. A shallow correction shows that every small dip is being bought by the bulls. Buyers will try to push the price above $20.40 and start the next leg of the uptrend. The pair could then rise to $24.
The risk to this assumption is that the RSI has been in overbought territory for the past few days. This increases the risk of a short-term correction. If the price declines and falls below $16.60, the pair may slide to $14.57 and then to the 20-day EMA ($12.23).
The four-hour chart shows a negative divergence in the RSI. If the price breaks below the 20-EMA, the pair can test the 50-SMA. This is an important support to monitor because if it cracks, the pair could drop to $12.
Conversely, if the price rises and breaks above $20.40, it will indicate that the bull has reasserted its supremacy. That can cancel the negative divergence that developed in the RSI and continue the upward trend.
FTM/USDT
Fantom (FTM) has been on an amazing run since breaking through the downtrend line. A clear rally the past few days suggests aggressive buying by bulls.
These indicators signal that the cow is under control. During a strong up move, the correction is short-lived as bulls buy on every small dip. Bears try to stop the rise near the psychological resistance at $0.50 but if the bulls pierce this level, the FTM/USDT pair can soar to $0.56 and then to $0.63.
Sometimes, a vertical rally is followed by a sharp decline. Therefore, traders should be careful as a break and close below $0.43 can drop the pair to the 20-day EMA ($0.37). This is a key level to watch out for as a break below it could signal that the uptrend may be over in the near term.
The pair dropped from overhead resistance at $0.50 but found support at the 20-EMA. This indicates that sentiment remains positive and traders are buying dips. The bulls will again try to clear the overhead barrier at $0.50 and continue the upward move.
Bears may have other plans as they will try to pull the price below the 20-EMA. This is an important level to watch out for in the short term as a break below it could open the door to a possible drop down to the 50-day simple moving average. If this level is also cracked, the next stop can be $0.36.
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