The collapse of FTX continues to fuel fears of a contagion in the cryptocurrency space as investors wait for news of companies that could face heatwaves. One notable name that has come under suspicion is the Grayscale Bitcoin Trust (GBTC), which has seen the price discount of bitcoin (BTC) hit an all-time high of around 50%.
Traders hate uncertainty and avoid investing during these periods. This may be one of the reasons for the lack of buying interest in Bitcoin even after its price plummeted. The Stock-to-Flow (S2F) model, which skyrocketed in popularity during the bullish phase, is under increasing criticism following a deviation between the price of Bitcoin and its price-forecast levels that did not exist before.
Does this mean that pessimism has gone to the extreme, or is the S2F model just wrong?
During the bearish phase, the overall trend is down, but there are always pockets of strength that can offer trading opportunities for long-only investors. However, rallies during a bear market are short-lived, so traders may consider taking profits near strong resistance levels.
Let’s look at the charts of five cryptocurrencies that may try to rise in the near future.
Bitcoin continues to trade in a tight range of $16,229 to $17,190. As a rule, periods of hard consolidation are accompanied by an increase in volatility.
Descending moving averages and the Relative Strength Index (RSI) in the negative zone indicate that the path of least resistance lies down. If the price falls below $16,229, the November 9 intraday low of $15,588 could be in jeopardy. A break and close below this support could signal a resumption of the downtrend. The next support on the downside is $12,200.
If the bulls want to avoid further declines, they will have to push and hold the price above the $17,622 breakout level. Such a move would indicate strong demand at lower levels. The pair may then rise to the psychological level of $20,000.
The BTC/USDT pair is trading near the moving averages, which have leveled off. This suggests that the pair has entered a state of equilibrium, since both buyers and sellers have not decided on the next direction of movement.
However, this uncertainty is unlikely to last long. If the price drops below $16,229, selling pressure could increase and the pair could drop to $15,588. If this support gives way, the pair may start the next leg of the downtrend.
On the contrary, if the price rises and exceeds $17,190, this would mean that the bulls have used the current tight range to accumulate. The pair could then rise to $18,200 and then to $18,730.
Toncoin (TON) recovered sharply from its June low and managed to hold on to most of the gains. This suggests that traders are not in a hurry to dump their positions at higher levels.
The TON/USDT pair has formed a symmetrical triangle that usually acts as a continuation pattern. Both moving averages are gradually sloping up and the RSI is in positive territory, indicating a slight bullish lead.
If the price bounces off the 20-day exponential moving average ($1.65), the bulls will try to take the price above the triangle. If they succeed, the pair could rise to $2.15 and then move up to the $2.87 target.
Alternatively, if the price falls below the 20-day EMA, the pair could fall to the 50-day SMA ($1.50) and then to the support line.
The pair is facing tough resistance at $1.80. Repeated failures to sustain the price above this level may have prompted short-term traders to take profits. The bears are trying to capitalize on this situation and push the price below the 50-SMA. If this support breaks, the pair could drop to $1.55.
Conversely, if the price rebounds from the current level, the bulls will again try to break the wall at $1.80. Repeatedly retesting a resistance level tends to weaken it. A close above this resistance could open the doors to a possible upside to $2.
Chiles (CHZ) is trying to form an inverted head and shoulders pattern that will end on a breakout and close above the neck line. If this happens, it could signal the start of a new uptrend.
The target of the reversal pattern is $0.54, but the bears are unlikely to give up easily. They aggressively protect the neckline. If the price falls below the 50-day SMA ($0.21), the CHZ/USDT pair could drop to $0.18 and then to $0.14.
Alternatively, if the price rebounds from the current level, the buyers will again try to push the pair above the neck line and gain control.
Smoothing moving averages and RSI just below the midpoint do not give a clear advantage to either bulls or bears. Therefore, it is better to wait until the price breaks out before opening new positions.
The pair reversed sharply down from $0.27 and the bears drove the price below the moving averages. If the price holds below the 50-SMA, the pair could drop to $0.20. This can put bears in the driver’s seat.
On the other hand, if the price turns up from the current level and rises above the 20-EMA, this means that traders are viewing the fall as a buying opportunity. The pair could then rise to $0.26 and then to $0.28. Buyers will have to push the price above this level to challenge the resistance at $0.30.
Connected: FTX Funds Move as Thief Converts Thousands of ETH to Bitcoin
Although Quant (QNT) has corrected sharply over the past few days, it is trying to find support and bounce off the support line. This indicates demand at lower levels.
The descending 20-day EMA ($128) indicates the advantage of the bears, but the RSI is trying to form a positive divergence. This suggests that selling pressure may ease.
Buyers will need to push and maintain the price above the 20-day EMA to show that the corrective phase can be completed. Then QNT/USDT could rise to the 50-day SMA ($151) and then to $180.
This positive view may not be valid in the near future if the price continues to decline and breaks the uptrend line. The pair could then drop to $87 and then to $79.
The recovery of the pair is facing selling near the downtrend line. This suggests that bears are active at higher levels. The bears have pulled the price below the moving averages and will try to continue lower to $105 and then to $94.
To negate this negative point of view, the bulls will have to push the price and keep it above the downtrend line. The pair could then rally to $125 where the bears could put up a strong defense. If buyers overcome this barrier, the increase could reach $136.
While most of the major cryptocurrencies continued their downtrend over the past few days, Trust Wallet Token (TWT) moved in the opposite direction and surged. This indicates superiority in the short term.
TWT/USDT jumped from $1.03 on Nov 10 to $2.73 on Nov 14, up 165% in a short amount of time. This pushed the RSI deep into the overbought zone, suggesting a minor correction or consolidation in the near term, which is what happened.
The pair is finding support near the $1.88 Fibonacci 50% retracement level, but the bulls are struggling to push the price above $2.45. This suggests that the pair may consolidate between $1.81 and $2.45 within a few days.
Both moving averages are sloping upwards, and the RSI remains in positive territory, indicating a bullish lead. If buyers push the price above the $2.45 to $2.73 resistance zone, the pair could resume the uptrend. This positive view could be invalidated on a break and close below the 20-day EMA ($1.70).
The bears have pulled the price below the 50-SMA, but they are struggling to keep the pair down. This suggests strong buying at lower levels. If buyers push the price above the 20-EMA, the pair may rise to the downtrend line.
A break above this level could clear the way for a possible upside to $2.45. This remains a key hurdle for the bulls. If they manage to break it, the pair could retest $2.73.
On the other hand, a drop below $1.92 could take it down to $1.81. This is an important level to keep an eye on because a break below this level could tip the edge in favor of the bears.
The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and trading step involves risk, you should do your own research when making a decision.