Bitcoin (BTC) fundamentals got a boost when the US Senate passed the $ 1.9 trillion stimulus bill on March 7. If the tarders react to this bill in the same way as they did to the first stimulus package in April 2020, then the cryptocurrency markets may experience a strong upward movement.
The stimulus package also intensifies the focus on the devaluation of the US dollar. These concerns could lead some investors to deposit their money in solid assets or Bitcoin rather than holding it in fiat currencies, according to veteran trader Peter Brandt.
In addition to investors, an increasing number of open capital companies choose to protect their cash reserves by buying Bitcoin. After high-profile purchases from MicroStrategy, Tesla, and Square, a Chinese company called Meitu revealed that it had bought $ 40 million worth of Bitcoin and Ether.
If other companies around the world follow suit and invest a portion of their cash reserves in Bitcoin, that could create a massive supply and demand imbalance, causing prices to skyrocket.
Let’s study the charts of the top 5 cryptocurrencies that may resume their upward trend in the short term.
BTC / USD
Bitcoin fell below the 20-day exponential moving average ($ 48,484) on March 5 and March 6, but the long tail at each candle shows that buyers are ready to jump into the lower levels. The bulls have currently pushed the price towards the overhead resistance of $ 52.040.
While the 20-day EMA is flat, the Relative Strength Index (RSI) has started to rise and has risen above 58, indicating that the bulls are trying to get back into the game.
If buyers can carry the price above the resistance, the BTC / USD pair can retest the all-time high at $ 58,341. A breakout of this level could start the next stage of the uptrend, which can hit $ 72.112.
Contrary to this assumption, if the price turns down from the overhead resistance and breaks below $ 46,313, the pair may drop to the 50-day SMA at $ 42,861. This level is likely to act as a rigid support.
If the pair starts to rise from this support it may spend a few more days in consolidation. But if the bears sink the price below $ 41,959.63, traders could rush to close their positions, which could indicate a possible trend reversal.
The pair has formed an inverted head and shoulders pattern on the 4-hour chart that will complete with a breakout and close above $ 52.040. This bullish setup is targeting $ 61.075.
The 20-day EMA has started to appear and the RSI has risen above 62, which indicates a small advantage for the bulls.
This bullish view will be invalidated if the price turns down from current levels or overhead resistance and falls below $ 47,000. Such a move could open the doors for a drop to the next major support at $ 41,959.
UNI / USD
After consolidating near $ 29 for three days, Uniswap (UNI) broke through overhead resistance earlier today. If the bulls can sustain the price above $ 29, it will improve the prospects for a resumption of the uptrend.
Both moving averages are rising and the RSI is in overbought territory, signaling that the bulls are in command. If the UNI / USD pair breaks above $ 33, the next level to watch is $ 38 and later $ 46.
This bullish view will be invalidated if the price turns down from current levels and breaks below the 20-day EMA ($ 25.31). If that’s the case, the pair can drop to $ 22 and then to the 50-day SMA ($ 19.78).
The 4-hour chart shows that the bears are likely to aggressively defend the overhead resistance at $ 32. However, if the bulls do not allow the price to fall below the 20-day EMA, it will indicate strength. A breakout and close above the $ 32 to $ 33 zone can initiate the next stage of the move to the upside.
This bullish outlook will be nil if the price turns down and breaks below the 20-day EMA. Such a move will suggest that traders are taking profits on rallies. The pair could then fall to the 50-day SMA.
THETA / USD
THETA is in a strong uptrend. Although the altcoin fell back on March 7, the long tail of the March 8 candle shows buying at the lower levels. Corrections during a strong uptrend generally last one to three days, after which the main trend resumes.
The rising moving averages and the RSI near the overbought zone suggest that the bulls have the upper hand. If buyers can carry the price above $ 4.72, the THETA / USD pair can resume the uptrend and hit $ 5.73.
Conversely, if the price turns down from the overhead resistance zone of $ 4.50 to $ 4.72, the pair may drop to the 20-day EMA ($ 3.58). A strong bounce off this support will suggest that sentiment remains positive as the bulls are buying the dips.
If the bears sink the price below the 20-day EMA, a deeper correction to the 50-day SMA ($ 2.82) is possible. Such a move will indicate that momentum has weakened and may delay the resumption of the bullish move.
The 4-hour chart shows that the 20-day EMA is rising and the RSI is in the positive zone. If the bulls can push and hold the price above the downtrend line, the pair can retest $ 4.72. The breakout of this resistance could initiate the next leg of the uptrend.
On the other hand, if the price continues to correct, it may find support at the 20-day EMA. If that happens, the bulls will once again try to push the price above the downtrend line. However, a break below the 20-day EMA can push the price down to $ 3.85.
VET / USD
VeChain (VET) is currently stuck in a wide range between $ 0.0345 and $ 0.060774. The price had reached the range resistance, but the long wick on today’s candle shows take profit near $ 0.060774.
However, the moving averages are sloping higher and the RSI has also risen a bit further into the positive territory, suggesting that the path of least resistance is to the upside. If the bulls can carry and hold the price above $ 0.060774, the VET / USD pair can begin the next stage of the uptrend.
The first target on the upside is at $ 0.087048 and if this level is crossed as well, the pair can move up to $ 0.10.
Contrary to this assumption, if the price turns down from the current level, the pair can drop to the 20-day EMA ($ 0.047). A bounce above this support will suggest that the uptrend remains intact, but a break below it may put range-limited action into play.
The 4-hour chart shows profit taking near $ 0.060, but the good news is that the bulls have not allowed the price to continue to decline. If the pair bounces off the 20-day EMA, the bulls will make one more attempt to push the price above the stiff overhead resistance.
If they can sustain the price above $ 0.060774, the next stage of the uptrend could begin. However, if the price falls below the 20-day EMA, selling could intensify and the price could fall to the next support at the 50-day SMA.
MOON / USD
Terra (LUNA) has been consolidating in a wide range between $ 5 and $ 8.50 for the past few days. Both moving averages are rising and the RSI is close to the overbought territory, signaling that the path of least resistance is to the upside.
The bulls managed to push the price above the range on March 5, but were unable to take advantage of the breakout as the price turned down and fell back below $ 8.50 on March 6. This suggests that demand petered out at the highest levels.
Nevertheless, If the bulls do not lose much ground, it will indicate that the tarders are waiting to buy the shallow dips. If that happens, buyers can make one more attempt to start the next stage of the up move. If they get their way, the LUNA / USD pair could rally to as high as $ 12.
The long wicks on the candles above $ 8.50 show profit taking at the higher levels and that the bulls are attempting to defend the 20-day EMA. If the price rebounds from current levels, buyers will again try to resume the uptrend by taking the pair above the upper resistance zone between $ 8.50 and $ 9.
Conversely, if the bears sink and hold the price below the 20-day EMA, the pair could drop to the 50-day SMA. If the price bounces above this level, the pair can consolidate in the upper half of the range for a few days. A dip below the 50-day SMA will be a sign that the price may stagnate in the $ 5 to $ 6 range.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Each investment and commercial movement involves risks, you must do your own research when making a decision.