Bitcoin’s (BTC) price continues to be range-bound between $30,000 and $40,000 level for the past few days, which is not necessarily a bearish sign.
Generally, after a sharp fall, the price tends to consolidate as the asset transfers from weaker hands to stronger hands. After the transition is complete, the asset breaks out and starts a new uptrend. Usually, the longer the price consolidates in a range, the stronger the next trending move will be.
Bloomberg Intelligence senior commodity strategist Mike McGlone said on Saturday that Bitcoin’s declining supply was a positive sign, which could act as a “bullish ace” for its move higher “if past patterns hold.”
Yoni Assia, CEO of eToro, also told Cointelegraph that Bitcoin could see a sharp rise “over the next three to five years, as there are still 5 billion people in the world that basically don’t have good local currency.”
Therefore, investors should not be discouraged by the muted price action in the short term. Bitcoin’s fundamentals remain strong and are likely to result in a new uptrend in the future.
As crypto markets consolidate, let’s analyze the charts of the top-5 cryptocurrencies that may outperform in the next few days.
Bitcoin turned down from the resistance line of the descending triangle on Jan. 12 and broke below the 20-day exponential moving average ($36,586). This suggests that the bears are aggressively defending the resistance line.
The longer the price stays below the 20-day EMA, the greater the chances of a drop to the lower levels. If bears sink the price below $34,600, the BTC/USDT pair could drop to $33,400 and then to $31,000.
A break and close below $31,000 will complete a descending triangle pattern, which has a target objective at $19,549. However, it is unlikely to be a straight drop to the…