Bitcoin (BTC) bulls have successfully defended the $ 30,000 level in recent days, but failing to achieve a strong bounce has some traders concerned that the price will eventually drop to new lows.
In a series of tweets, Ecoinometrics said that the current correction "looks very similar to 2013" when Bitcoin took 197 days to rise to a new all-time high and a low was formed after a 69% correction from the all-time high.
If history repeats itself, traders may have to be patient because the current correction has only been in play for 95 days. At $ 30,000, Bitcoin just dropped 54% from its all-time high, and a 69% correction could sink it to $ 20,000.
Daily view of crypto market data. Source: Coin360
In a new report, Delphi Digital highlighted that trading activity had collapsed and spot trading volumes had fallen more than 60% from May highs. The derivatives market has also seen an exodus of leveraged traders and Bitcoin futures open interest has returned to early 2021 levels.
Delphi Digital considers this to be a bullish sign as they believe that "the strongest participants are those who contribute primarily to the current open interest levels".
Let’s study the charts of the top 5 cryptocurrencies that can outperform in the short term.
BTC / USDT
Bitcoin is attempting to bounce off the $ 31,000 support, but the long wick in today’s candle suggests that the buy is exhausted at higher levels. The bears will once again attempt to sink the price below the $ 31,000 support.
BTC / USDT daily chart. Source: TradingView
The 20-day exponential moving average ($ 33,174) is declining and the Relative Strength Index (RSI) is in the negative zone, suggesting that the bears have the upper hand. If sellers drop the price below $ 31,000, the BTC / USDT pair could drop to the next support at $ 28,000.
The $ 31,000 to $ 28,000 zone is critical for the bulls because if this zone cracks, sentiment will sour even more and could lead to a long sell-off. That could intensify sales and result in a drop to $ 20,000.
Contrary to this assumption, if the bulls hold the rebound and push the price above the 50-day simple moving average ($ 34,925), it will indicate that the selling pressure is easing. That could increase the chance of a breakout above $ 36,670.
BTC / USDT 4-hour chart. Source: TradingView
The bulls pushed the price above the 20-EMA on the 4-hour chart, but could not get past the hurdle at the 50-SMA. This suggests that the bears continue to sell in rallies. The bears will again try to sink the price below the $ 31,000 support.
If successful, the pair could drop to $ 30,000 and then $ 29,000. The first sign of strength will be a breakout and close above the 50-SMA. The short-term trend will turn in favor of the bulls if the pair rises above the downtrend line.
MATIC / USDT
Polygon (MATIC) has been correcting for the past few days and the price has reached the strong support zone at $ 0.74 to $ 0.68. The bulls are likely to defend this zone aggressively.
MATIC / USDT daily chart. Source: TradingView
Although the moving averages are declining, the RSI is attempting to rebound from the oversold territory. This suggests that aggressive bulls are attempting to start a relief rally.
The first resistance on the upside is the 20-day EMA ($ 1). If the price turns down from this level and breaks below the support zone, the downtrend could resume and the MATIC / USDT pair could drop to $ 0.54 and then $ 0.34.
Alternatively, if the bulls push the price above the 20-day EMA, the pair could rally to the 50-day SMA ($ 1.26). A break above this resistance could open the doors for a move higher to $ 1.71.
MATIC / USDT 4-hour chart. Source: TradingView
The bounce to $ 0.78 is facing resistance at the 20-EMA on the 4-hour chart. This suggests that the bears are unwilling to let go of their lead and are selling in rallies. The bears will now try to sink the pair to $ 0.74.
Conversely, if the price rises from the current level, the bulls will once again try to push the price above the 20-EMA. If they manage to do that, the pair could rise to the 50-SMA. Above this resistance, the relief rally can reach $ 1.05.
THETA / USDT
THETA has been in a downtrend since it hit $ 15.88 on April 16. The downward movement has reached the strong support zone at $ 4.57 to $ 3.85, which could attract buying.
THETA / USDT daily chart. Source: TradingView
The downtrend moving averages suggest that bears are in command, but oversold levels on the RSI indicate the possibility of a counter-trend rally. The first resistance on the upside is the 20-day EMA ($ 5.68).
If the price turns down from this resistance, the bears will make one more attempt to sink the THETA / USDT pair below the support zone. A break below $ 3.85 will signal the start of the next stage of the downtrend that could hit $ 2.60.
Conversely, if the bulls push the price above the 20-day EMA, the pair could move up to the downtrend line. A breakout of this resistance will suggest a possible trend reversal.
THETA / USDT 4-hour chart. Source: TradingView
The pair has been consolidating in a tight range between $ 4.33 and $ 4.62. The RSI has formed a positive divergence on the 4-hour chart, indicating that the bearish momentum may be weakening.
If the bulls push and hold the price above the 20-EMA, the pair could rally to the 50-SMA. This level can act as a resistance, but if the buyers can overcome this hurdle, the pair could move up to the next higher resistance at $ 6.
Conversely, if the bears sink and hold the price below $ 4.33, the selling could intensify and the pair could fall to the psychological support of $ 4.
CRO / USDT
Crypto.com Coin (CRO) has been limited to a range between $ 0.14 and $ 0.08 for the past few days. The price was down from $ 0.13 on July 14, but the positive sign is that the bulls are trying to stop the correction near the moving averages.
CRO / USDT daily chart. Source: TradingView
Both moving averages have leveled off and the RSI is just below the midpoint, indicating a balance between supply and demand. If the price turns down from the current level and breaks below $ 0.10, the pair could slide towards the strong support at $ 0.08.
Conversely, if the bulls push and hold the price above the moving averages, the CRO / USDT pair could rise to the upper resistance zone at $ 0.13 to $ 0.14. The bears are likely to defend this zone aggressively. If the price turns down from this zone, the limited-range action may continue for a few more days.
CRO / USDT 4-hour chart. Source: TradingView
The bears lowered the price below the support at $ 0.108, but were unable to take advantage of the advantage. The price rallied and rallied to the 20-EMA, but the bulls were unable to overcome this hurdle. This suggests that the bears have not given up and are selling on rallies.
If the bears sink and hold the price below $ 0.108, the pair could start its journey towards the critical support at $ 0.08.
Conversely, if the bulls carry the price above the 20-EMA, the pair could rally to the 50-SMA. A break above this level will increase the possibility of a retest of the upper resistance zone.
Related: Here’s a way to trade Bitcoin even when the price of BTC is teetering off a cliff
LEO / USD
Unus Sed Leo (LEO) has been trading near the wide range resistance between $ 2.03 and $ 2.95 for the past few days. Typically, a tight consolidation near overhead resistance indicates that the bulls are not posting gains as they anticipate a breakout.
LEO / USD daily chart. Source: TradingView
Both the moving averages are up and the RSI is above 63, indicating an advantage for buyers. If the bulls hold the price above $ 2.96, the LEO / USD pair could start its journey towards the next resistance at $ 3.32.
This positive view will be invalidated if the price turns down from the current level and breaks below the 20-day EMA ($ 2.78).
Such a move will suggest that buyers have given up on the prospects of a breakout and are turning a profit. That could bring the price down to the 50-day Simple Moving Average (SMA) ($ 2.59).
LEO / USD 4-hour chart. Source: TradingView
The 4-hour chart shows that the tight consolidation between $ 2.85 and $ 2.95 has resolved to the upside. If buyers hold the price above $ 2.96, the bullish momentum could pick up and the pair could rally to $ 3.10 in the near term.
The 20-EMA has started to gradually rise and the RSI is above 62, indicating a small advantage for the bulls. Contrary to this assumption, if the price turns down and falls below $ 2.80, the pair could slide to $ 2.67.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move involves risk, you should do your own research when making a decision.
The entry Top 5 cryptocurrencies to watch out for this week: BTC, MATIC, THETA, CRO, LEO was published first in Bitcoin, Crypto and Blockchain News.