Once again, cryptos are on the move, this time benefiting from a convergence of tailwinds. However, investors need to be vigilant as not all virtual currencies have experienced the same benefits.
First, the benchmark cryptocurrency appeared to be rising partly on technical momentum. As I will explain later, the digital asset appears to be in the process of forming a bullish pennant formation. Secondly, the blockchain ecosystem has there were liquidations of open short positions. This dynamic suggests that a short squeeze forced bearish traders to close their positions.
Finally, there are some rumors that several China-based financial companies have put forward Applications for their own spot exchange-traded crypto funds. These applications are apparently awaiting official approval. If given the green light, international demand for cryptos could flourish.
This is a difficult time as not all blockchain assets have printed the same compelling charts as the benchmark coin. Still, it is an exciting time to be involved in decentralized finance circles. Below are the top cryptos to keep an eye on.
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Bitcoin (BTC USD)
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Let’s get started right away. From a short-term perspective, this is more than possible Bitcoin (BTC USD) could see a significant increase. This is because BTC appears to be drawing what I said before: a bullish pennant formation. Essentially, this pattern represents a behavioral consolidation where the upper and lower price action converges at a focal point. At this peak, the asset could either break out or collapse.
I’ll be direct. One of my main concerns at the start of the current crisis was the Bitcoin halving. Fundamentally, the narrative seems convincing to the bulls: the difficulty of mining BTC is increasing significantly, leading to lower supply as demand increases. This combination should lead to explosive growth. At the same time, it is also a well-known catalyst. That’s why you have to respect the old adage: buy the rumor, sell the news.
However, the depiction of Bitcoin’s bullish pennant forces me to respect the data. Additionally, the volume has been “toned down” when the pennant is formed, which is what you actually want to see. So don’t be surprised if the BTC price rises.
Ethereum (ETH-USD)
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While optimists may be justified in celebrating Bitcoin’s potential rise, ether (ETH-USD) presents a more difficult narrative. The basic shape of the pennant formation is there – well, sort of. However, it’s an ugly looking chart that makes me think. Will ETH keep up with BTC as usual? Or will the benchmark asset leave other cryptos in the lurch?
Unlike the formation Bitcoin printed, Ethereum’s (possible) pennant lacks symmetry. Admittedly, symmetry is subjective when it comes to the discipline of technical analysis. However, the two diagrams are significantly different, so caution is advised. If I had to buy this rally, I would focus more on BTC and ETH.
Why? Currently, the fundamentals support Bitcoin. It is the one that is about to bring about the halving event. In addition, the aforementioned Chinese investors are planning to create Bitcoin ETFs. It is not clear whether they are interested in altcoins or alternative (non-BTC) cryptos.
One peculiarity to note: Ethereum volume decreased during the formation of its strange-looking bullish pennant. This is something you can add to your calculations.
Tether (USDT-USD)
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In the last 24 hours since early Tuesday morning Connection (USDT-USD) fell just below parity with the dollar. Normally, losing the perfect one-to-one ratio to the greenback is no surprise; In fact, the ratio fluctuates constantly. However, Bitcoin is up almost 3% in the last 24 hours. Ethereum gained more than 8%. Therefore, cryptos are likely to be more valuable than fiat money at this point.
However, Tether was surprisingly subdued for much of Monday’s session. As Bitcoin crossed the $71,000 threshold, it is evident that bullish sentiment has returned. The question now is whether the mood will last or not. Here it is the loss of parity that makes me a little suspicious.
Don’t get me wrong – I’m not suggesting that the apparent contradiction will lead to a crash in the virtual currency complex. However, it is also possible that the consolidation cycle of the aforementioned bullish pennant formation could take a little longer. In any case, I would look at this area before making any major moves.
BNB (BNB-USD)
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After a hard-fought battle BNB (BNB-USD) has moved back to the Fourth place in terms of market capitalization. Of course, cryptos represent an extremely volatile space. So while BNB has opened up a market cap gap of around 10% against the fifth-place asset, the lead is not secure. BNB could have a bad day and/or the fifth-ranked blockchain token could have a strong day.
Now, what makes BNB a compelling cryptocurrency is that it is also printing a bullish pennant formation. The chart is not as aesthetically pleasing as Bitcoin’s, especially because it lacks “firmness” in recent sessions. As evidence of this, BNB has fallen slightly below parity in the last 24 hours. This is in sharp contrast to the performance statistics produced by Bitcoin and Ethereum.
Still, I like the softening in volume as the meat of the pennant formation built up on the charts. This is a possible signal that BNB could move higher at the apex. However, I think a word of caution is in order.
Between Bitcoin and BNB, I would give the former blockchain asset a greater weight. Here, too, it takes center stage in the fundamental spotlight.
Solana (SOL-USD)
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While Solana (SOL USD) had held fourth place by market capitalization for several weeks, but could not hold on. Still, it is within striking distance of BNB, which is currently worth around $87.1 billion. Solana is at $79.3 billion. Furthermore, the gap between Solana and the next most valuable digital asset is over 130%.
Remember what I said before about not all cryptos enjoying the same benefits as Bitcoin? This is the case with Solana. Yes, in the longer term SOL has killed it, especially since the “Uptober” seasonality cycle. However, SOL has risen by just over half a percent in the last 24 hours. Even more worrying is its performance last week, which fell 3%.
Subsequently, Solana traded with hands below its 20-day exponential moving average. Additionally, volume has been declining since around mid-March. It is difficult to say whether this volume slowdown is a positive development, as it is difficult to characterize SOL’s chart pattern as a bullish pennant.
Yes, it’s a bit like comparing notes Rorschach test. Still, I think SOL needs to exercise caution at this point.
XRP (XRP-USD)
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As if cryptos needed to be any more confusing, we come to this conclusion XRP (XRP USD). In recent sessions, XRP has been one of the most frustrating digital assets. Previously, XRP recorded a series of rising lows from the summer of 2022 to the end of 2023. However, this pattern suffered a noticeable flaw earlier this year. Luckily for stakeholders, the bulls came to save the chart.
However, rescue from choppy water was not easy and resulted in wild waves. A few sessions ago, XRP tested the support line symbolized by its 200-day moving average. It was a nervous moment, but the optimists persevered. Currently, XRP is trading at almost 62 cents, above its 50-day average of 61 cents.
Still, I wouldn’t say with certainty that XRP is out of the woods. One of the problems is that XRP’s February low triggered what looked like a widening wedge. Long story short, I need at least XRP to trade along a horizontal consolidation range and break the negative impact of the wedge. Of course a big step up would be better.
For now, investors need to keep a careful eye on this area.
Cardano (ADA-USD)
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If you thought reading about the impact of cryptos would be confusing at this point, check this out Cardano (ADA USD). I’m not here to complain about it. Basically, I recognize that it is one of the most popular altcoins. It has enjoyed this status for years, longer than most virtual currencies have been around. But let’s face it – that’s an ugly chart.
Since falling from its highs last month, Cardano’s 20-day exponential moving average has effectively created upward resistance, first near the 66 cent level, then near the 61 cent level, which is approximately is where ADA is currently located. In the cycle of falling prices The volume also decreased. However, this seemingly bearish dynamic could actually have bullish implications.
Still, it’s a damn risky assumption. Again, this is mainly because Cardano is not the one receiving the halving advantage. You can also potentially claim that ADA printed a head and shoulders pattern between February and the current time. This generally has negative effects.
Overall, investors need to be careful.
At the time of publication: Josh Enomoto held a LONG position in BTC, ETH, USDT and XRP. The opinions expressed in this article are those of the author, subject to those of InvestorPlace.com Publishing Guidelines.