Bull phase corrections are usually a bullish sign, as they reduce the frothy excitement and allow stronger hands to enter the markets. However, the recent correction in Bitcoin (BTC) from its all-time high at $ 64,849.27 doesn’t seem to have scared novice traders.
Data from DappRadar shows that decentralized exchange volumes have increased over the past week as traders have left potentially profitable Bitcoin positions to buy altcoins at their current rock bottom prices.
Another sign of interest in altcoins is the continued high volumes in Dogecoin (DOGE), which remains the fourth most traded cryptocurrency by volume, after Bitcoin, Ether (ETH) and XRP, according to data from CoinMarketCap.
Bitcoin’s recent decline witnessed the sale by the small to medium-sized whales, who dumped $ 100,000 to $ 1 million worth of Bitcoin on the exchanges. A positive sign, however, is that the larger whales have continued to congregate during this time.
While the long-term bullish story remains intact, the short term could see even more downside. In general, a correction does not end until shoppers throw in the towel and a state of fear seizes the markets.
In such an uncertain atmosphere, let’s take a look at the top 5 cryptocurrencies that are likely to outperform the other major cryptocurrencies in the short term.
BTC / USDT
The bulls are trying their best to push the price back above the psychological USD 50,000 level, but are facing strong resistance from the bears with every small increase. This shows that the bears are trying to hold their advantage and continue the decline to the next critical support at $ 43,006.
The 20-day exponential moving average ($ 55,671) is winding down and the relative strength index (RSI) is close to oversold territory, suggesting the bears have the upper hand.
The BTC / USDT pair had formed an inside day candlestick pattern on April 24 and today, indicating indecision among the bulls and bears. If uncertainty resolves to the other side, sales could increase, opening the gates for a drop to $ 43,006.
On the other hand, if the bulls are able to push the price above USD 52,129, the pair could witness a relief rally that is likely to meet resistance at the 20-day EMA. If the price lowers this resistance, the chances of a break below USD 47,459 increase.
This negative view will be voided if the bulls push and keep the price above the 50-day simple moving average ($ 56,870).
The 4-hour chart shows the bears have sold at aid rallies for the 20-EMA. With both descending moving averages and negative zone RSI trading, the upside lies with the bears.
If the bears drop the price below $ 48,664.67, the pair could drop to $ 47,459. A break under this support could resume the downward movement.
Conversely, a break above the 20-EMA will be the first sign that sales have dried up and the bulls have a chance to expand the relief rally to the 50-SMA.
ETH / USDT
The bulls have once again defended the 20-day EMA ($ 2,235) indicating that the trend remains strong and buyers are piling up on dips. Ether will now attempt to rally towards the $ 2,545 to $ 2,645 overhead resistance zone.
An overhead zone breakout could be the start of the next leg of the uptrend that could reach $ 2,745 and then $ 3,000. The gradually increasing moving averages and the RSI above 57 suggest that the path of least resistance is upwards.
Contrary to this assumption, if the price falls against the overhead resistance, the bears will try again to lower the ETH / USDT pair below the moving averages. If they succeed, the pair could start a deeper correction towards $ 1,542.
The 4-hour chart shows that the pair has formed a head and shoulders pattern that will complete at a break and close below the neckline. Such a move could bring the price down to the $ 1,600 pattern target.
On the other hand, if the bulls can push the price above USD 2,375, the pair could retest its all-time high at USD 2,645. Such a move will void the pattern and the pair is likely to pick up momentum on a break above USD 2,645.
BNB / USDT
Binance Coin (BNB) is currently consolidating in an upward trend. The bulls buy the dips on the USD 480 support while the bears defend the USD 600 to USD 638.57 overhead resistance zone. A series-tied action following a strong upward trend shows that traders are not rushing to make a profit.
Both moving averages are increasing and the RSI above 56 suggests the bulls have the upper hand. If buyers can push the price above USD 530, the BNB / USDT pair could start its journey into the range resistance at USD 600. The bears are likely to build a solid resistance again between USD 600 and USD 638.57 .
If the price goes down from this zone, the range-bound promotion can continue for a few more days. On the contrary, if the bulls push the price above USD 638.57, the pair could start its journey towards USD 720 and then USD 832.
This positive opinion will be voided if the bears sink and keep the price below $ 480. When that happens, sales could increase and the pair could drop to the 50-day SMA ($ 368).
The 4-hour chart shows that the price is stuck in a large symmetrical triangle. While price bounced off the triangle’s support line, the bears are trying to slow the relief rally at the moving averages.
If that happens and the price falls from the current level, the bears will feel an opportunity and try to drop the price below the triangle. If they succeed, the pair could start a deeper correction to $ 348.
Alternatively, if the bulls are pushing price above the moving averages, the pair could move towards the triangle’s resistance line. A breakthrough of the triangle could mean the resumption of the uptrend.
XMR / USDT
Monero (XMR) is in a strong uptrend and repeated attempts by the bears to start a correction have failed as the bulls have aggressively bought the dips near the $ 288.60 support.
The bulls have successfully defended the 20-day EMA ($ 335) and both moving averages are gradually rising, suggesting that buyers have the upper hand. However, the RSI is showing the first signs of a negative divergence, indicating that momentum may be weakening.
If the price falls from its current level and dips below the 20-day EMA, it will suggest the possible start of a correction towards $ 288.60. On the downside, if the bulls push the price above USD 424.55, the XMR / USDT pair could climb towards USD 498.
The 4-hour chart shows that volatility has picked up in recent days. The bears have repeatedly broken the 50 SMA, but the bulls have aggressively bought the dip and pushed the price back above the 20 EMA.
If the pair bounces back from the current level and rises above USD 405.40, a retest of USD 424.55 is possible. A breach of this resistance could start the next leg of the uptrend. Conversely, if the bears drop the price below the moving averages, a drop to $ 288.60 is likely.
CAKE / USDT
PancakeSwap (CAKE) had faced solid resistance near the USD 28 level in recent days. The bears tried to lower the price below the 20-day EMA ($ 24) on April 23, but the bulls aggressively bought the dip, suggesting sentiment remains positive.
Momentum has been building for the past two days and the CAKE / USDT pair has broken out to a new record today. The rising moving averages and the RSI near the overbought zone suggest the path of least resistance is up.
If the bulls hold the price above USD 30, the pair could move up towards USD 34.50. This optimistic view will be invalidated if the bears sink and keep the price below the 20-day EMA. Such a move will be a significant event as the price has not stayed below the 20-day EMA since March 24.
VORTECS ™ data from Cointelegraph Markets Pro began detecting a bullish outlook for CAKE on April 23, just as the rally began.
Exclusive to Cointelegraph, the VORTECS ™ Score is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As shown in the chart above, the VORTECS ™ Score for CAKE turned green on April 23 when the price was $ 25.24.
From then on, the VORTECS ™ score remained steady in the green and CAKE rose to a high of $ 31.12 on April 25, gaining 23% in about two days.
The 4-hour graph shows the formation of an inverted head and shoulders pattern. This bullish setup has a pattern target of $ 34.70. The 20-EMA has started to emerge and the RSI has risen above 65, indicating that the bulls have the upper hand.
In case of a correction, the bulls will try to bend the neckline of the pattern. If they do, the uptrend can resume. Conversely, a break below $ 27.50 could tip the advantage in favor of the bears, indicating that selling is at higher levels
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 carries risks, you should do your own research when making a decision.