Photo: Coin Telegraph
(Coin Telegraph) - Demand and supply metrics determine the price of an asset and data from Glassnode, an on-chain data firm, shows that Bitcoin’s liquid supply has been decreasing since June 2020. This signals that traders owning Bitcoin are not selling their holdings.
While the supply is shrinking, demand has been going up in the past few months as an increasing number of institutional investors have been buying Bitcoin.
Even though Bitcoin has risen sharply in the past few months, its dominance has fallen from about 69.71% on Jan 4 to 60.9% currently.
This shows that altcoins have outperformed Bitcoin in the past few weeks. With an eye on altcoins, let’s study the charts of the top five cryptocurrencies that may trend in the next few days.
Bitcoin broke above the $41,959.63 resistance on Feb 8 with a strong up-move, but since then, the momentum has weakened. Although the price has been nudging higher, the leading cryptocurrency is facing profit-booking at intermittent levels.
If the price turns down from the current levels and slips below $46,000, the correction could deepen to the strong support at $41,959.63. If the BTC/USD pair rebounds off this support, it will suggest the bulls continue to accumulate on dips, which is a sign that the uptrend is intact.
The bulls will then try to drive the price above the psychological barrier at $50,000 and resume the uptrend with the next target objective at $60,974.43.
On the other hand, if the bears sink the price below the 20-day exponential moving average ($41,349), the pair may drop to the 50-day simple moving average or SMA of $36,070.
This is an important support to watch out for because the price has not dipped below the 50-day SMA since Oct 9. Hence, a break below it will indicate a possible change in trend. The next support on the downside is much lower at $28,850.
Bitcoin Cash broke above the $539 resistance on Feb 12 and this attracted buying from the bulls. The altcoin picked up momentum and soared above the $631.71 resistance on Feb 13.
The long wick on today’s candlestick suggests short-term traders may be booking profits after the recent runup.
The BCH/USD pair may now correct to $631.71 and if the bulls can flip this level into support, it will indicate buying on every minor dip.
Read more from the original article here.
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