BTC, ETH, ADA, SOL, THETA
When market sentiment turns bearish, any negative news, no matter how small, pulls the price down as traders panic sell. It did so after China's social media giant Weibo banned a number of crypto-related accounts and raised fears that wider crackdown could emerge.
In other news, a note from Goldman Sachs said that their meetings with 25 chief investment officers of long-only and hedge funds revealed Bitcoin (BTC) as the least preferred asset to invest in.
Daily view of crypto market data. Source: Coin360While the news can be negative in the short term, it is unlikely to change Bitcoin's long-term history. As the price corrects, several institutional investors are likely to consider crypto investments to hedge their portfolio against the potential surge in inflation in the United States.
From the point of view of most traders, the current decline in Bitcoin continues to be a buying opportunity in the longer term.
Let's analyze the charts of the top 5 cryptocurrencies that could outperform in the next few days.
BTC / USDT
Bitcoin slid off the 20-day exponential moving average ($ 39,127) on June 3, but is finding support near the triangle's trendline. This shows that bulls buy on dips and bears sell on rallies.
BTC / USDT daily chart. Source: TradingViewThe next trend move is likely to begin after price leaves the triangle. If the bulls push the price above the resistance line and hold it, the BTC / USDT pair could rise to the 50-day simple moving average ($ 47,198) and then to the pattern target at $ 52,622.90.
On the contrary, when the price goes down and falls below the trendline of the triangle, it indicates that supply is exceeding demand. This could result in a drop into the $ 30,000-28,000 support zone.
If this zone breaks, sales could intensify as several traders who recently bought could abandon their positions. That could bring the price down to $ 20,000.
BTC / USDT 4 hour chart. Source: TradingViewThe moving averages on the 4-hour chart have flattened and the relative strength index (RSI) is hovering around 40-60, indicating a balance between buyers and sellers.
However, this state of uncertainty is unlikely to last long and the price is likely to break above or below the triangle in the next few days. If the price breaks out and holds above the triangle, it suggests that the setup was acting as a reversal pattern.
Conversely, if the price falls below the triangle, it suggests that the current consolidation was a temporary break in a strong downtrend. It is difficult to predict the direction of the breakout, so traders can wait for the breakout to occur before considering new positions.
ETH / USDT
Ether (ETH) snapped off the 50-day SMA ($ 2.908) on June 4th and re-entered the symmetrical triangle. On the positive side, however, the bulls haven't given way much, indicating strong buying near $ 2,550.
ETH / USDT daily chart. Source: TradingViewIf buyers push price above the triangle's resistance line, the ETH / USDT pair could challenge the 50-day SMA again. A breakout and close above this resistance could open the way for a move to the 61.8% Fibonacci retracement level at $ 3,362.72.
Contrary to this assumption, if the price again deviates from the 50-day SMA, this suggests that the bears will be aggressively defending the resistance. A break below $ 2,550 could push the price below the triangle's support line. A break below the triangle is the first sign that the bears are back in the driver's seat.
ETH / USDT 4-hour chart. Source: TradingViewThe 4 hour chart shows the formation of an ascending triangle pattern that completes on a breakout and closes above $ 2,906. If so, the pair could rise to $ 3,600 and then to the pattern target at $ 4,083.26.
This bullish view will be invalidated if price goes down and falls below the triangle's trend line. The bears will then attempt to push the price down to $ 2,200 and then to the critical support at $ 1,728.74.
ADA / USDT
Cardano (ADA) has been stuck in a wide range between $ 1.94 and $ 1 for the past few days. The altcoin slid down from the resistance of the range on June 4th and fell to the moving averages.
ADA / USDT daily chart. Source: TradingViewThe bulls are currently trying to defend the zone between the 20-day EMA ($ 1.66) and the 50-day SMA ($ 1.55). If the price rebounds from current levels, it suggests that sentiment will turn positive and traders will buy the dips to the moving averages.
A breakout and close above $ 1.94 (USD) indicate the bulls are back in the driver's seat. If the price holds above this level, the ADA / USDT pair could retest the all-time high at $ 2.47. A break above this resistance indicates the beginning of the next leg of the uptrend.
If the pair turns down and breaks below the 50-day SMA, this positive view will be invalidated. The bears will then attempt to push the price into the $ 1.33 to $ 1.22 support zone.
ADA / USDT 4 hour chart. Source: TradingViewThe 4 hour chart shows the formation of an ascending triangle pattern that completes on a breakout and closes above $ 1.94. This bullish setup has a target target of $ 2.88. However, it is unlikely to hit the target straight away as the bears could build stiff resistance at the current all-time high of $ 2.47.
The 20-EMA has started falling and the RSI is just below the midpoint, indicating a possible decline on the triangle's trendline. A break below this support will void the bullish setup and this may cause it to fall to $ 1.36 and then to $ 1.
SOL / USDT
The bears are trying to stop Solana's (SOL) relief rally at the 61.8% Fibonacci retracement level at $ 43.38. However, sellers were unable to bring the price below the 20-day EMA ($ 36.39), suggesting that sentiment has turned positive.
Cointelegraph Markets Pro's VORTECS ™ data began to see a bullish outlook for SOL on June 1 before the rally picked up pace.
The VORTECS ™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points such as market sentiment, trading volume, recent price movements and Twitter activity.
VORTECS ™ Score (green) vs. SOL price. Source: Cointelegraph Markets ProAs can be seen from the above chart, the VORTECS ™ Score for SOL turned green on June 1st when the price was close to $ 32.10.
The VORTECS ™ Score has remained consistently in the green since then and the price of SOL has risen to $ 43.33 today, up 35% in five days. This shows how the VORTECS ™ Score indicated early on a counter-trend rally, even though other instruments would have been bearish.
SOL / USDT daily chart. Source: TradingViewThe SOL / USDT pair rallied from the 20-day EMA on June 4th and has risen from the 50-day SMA ($ 39.42) today. This suggests the bulls are not waiting for a deeper correction to buy.
When buyers drive the price above $ 43.38, it indicates that the downtrend is over. The pair could then climb to the 78.6% retracement level at $ 49.97 and then to the all-time high at $ 58.38. The 20-day EMA has started to turn and the RSI is in positive territory, suggesting that buyers have the upper hand.
This positive view will be invalidated if the price goes down and falls below the trend line. The pair could then drop to $ 25.58 and then to $ 21.
SOL / USDT 4 hour chart. Source: TradingViewThe 4 hour chart's moving averages have risen and the RSI is trading in positive territory, suggesting that the bulls are making a comeback. The upside could gain momentum if buyers push the price above $ 43.38.
Conversely, if the price falls and breaks the 20 EMA, it suggests that supply is outstripping demand. The pair could then fall to the 50-SMA and then the trendline. A break below the trendline indicates that bears are back in the game.
THETA / USDT
THETA trades on a descending channel. The bulls attempted to push and hold the price above the resistance line of the channel on June 4th and 5th but failed. This suggests that the bears are aggressively defending this resistance.
THETA / USDT daily chart. Source: TradingViewHowever, the 20-day EMA ($ 8.19) has started to move higher and the RSI is in positive territory, suggesting that the bulls have a slight advantage. If the THETA / USDT pair rebounds from the 20-day EMA, buyers will make another attempt to push the price above the channel.
If they are successful, it suggests that the downtrend may be over. The pair could then start an upward move to $ 13 and later to the all-time high of $ 15.88. This bullish view will be invalidated if the bears sink and hold the price below the 20-day EMA. Such a move could result in a drop to $ 6.
THETA / USDT 4-hour chart. Source: TradingViewThe 4 hour chart shows that the pair has turned down twice from the resistance line of the channel. However, the bears have been unable to bring the price down and hold below the 20 EMA, suggesting lower demand.
If the pair recovers from current levels, the bulls will make another attempt to push the price above the channel. If they succeed, the next stage of the uptrend could begin.
However, if the price breaks below the 20-EMA, the pair could slide to the 50-SMA. A break below this support indicates the beginning of a deeper correction.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every step of investing and trading involves risk, so you should do your own research when making a decision.
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