Bitcoin’s (BTC) eight-week winning streak is likely to end as the price is down nearly 4% this week. The recent weakness indicates profit-booking by traders but it does not change the short-term uptrend. The pullback will also help reduce the froth that may have been building.
After the initial shakeout, strong hands are likely to re-enter the crypto market as the macro environment remains bullish for risk-assets. The decision by the Federal Reserve to pause rate hikes and possibly reduce rates in 2024 could further boost demand for crypto products.
Crypto market data daily view. Source: Coin360
However, nothing goes up in a straight line. After sharp rallies, traders generally book profits and shift their focus to other coins. As Bitcoin takes a breather, traders’ are likely to turn their attention to select altcoins.
What are the coins that may attract buyers in the short term? Let’s look at the charts of the top-five cryptocurrencies that are showing promise.
Bitcoin price analysis
Bitcoin is getting squeezed between the 20-day exponential moving average ($41,370) and the downtrend line. This sets the stage for a sharp breakout within the next few days.
BTC/USDT daily chart. Source: TradingView
If the price dives below the 20-day EMA, the bears will sense an opportunity and try to tug the BTC/USDT pair to the strong support at $37,980. The bulls are expected to fiercely defend this level. If the price rebounds off $37,980, it is likely to face selling at the 20-day EMA and again at the downtrend line.
Instead, if the price turns up and breaks above the downtrend line, it will suggest that the bulls are asserting their dominance. The pair could then retest the overhead resistance at $44,700. If this level is scaled, the prospects of a rally to $48,000 improve.
BTC/USDT 4-hour chart. Source: TradingView
The moving averages on the 4-hour chart have turned down, and the relative strength index (RSI) is trading in the negative territory, indicating that the bears have a slight edge in the near term. The bears will have to break the $40,000 support to accelerate selling and sink the pair to $37,980.
On the upside, a…
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