Solana Looks Ready for Relief Rally to $200

Key Takeaways

  • Solana is down more than 50% from its all-time high recorded in November.
  • SOL appears to be trading in oversold territory, suggesting a rally may be incoming.
  • A spike in upward pressure could see SOL rise toward $200.

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Multiple buy signals have appeared for Solana. If buy orders increase, SOL could have a significant relief rally on the horizon.

Solana Presents Buy Signals

Solana appears to be gearing up for a major bullish impulse despite the recent downturn in the crypto and global markets.

After putting in a major rally throughout most of 2021, SOL has had a rocky few weeks. It’s currently trading around $119, down more than 50% from its all-time high of $259 recorded on Nov. 6.

The high-throughput blockchain’s SOL currency appears to be trading in oversold territory, hinting that a local bottom could be about to form. The optimistic outlook is forecasted by the Tom DeMark (TD) Sequential indicator as it is currently presenting buy signals on Solana’s three-day and weekly charts. The bullish formations developed as red 9 candlesticks, which is indicative of a one to four candlesticks upswing in either time frame or the beginning of a new uptrend.

A spike in buying pressure around the current price levels could help validate the thesis presented by the TD Sequential indicator. Under such circumstances, Solana could rise toward its 50-three-day moving average at $180. Breaching this critical area of resistance could push SOL higher as the next important supply wall sits at around $200.

Solana US dollar price chart
Source: TradingView

It is worth noting, however, that Solana could dip lower before achieving its upside potential. The 100-three-day moving average and the 50-week moving average are currently hovering around $100, indicating that this is the most stable demand barrier underneath SOL. Any downswing toward this support zone could encourage sidelined investors to re-enter into the market and act as a catalyst for an upward movement.

Still, it remains to be seen whether the $100 support will hold. A decisive candlestick close above this level could spell trouble, invalidating the bullish outlook. Solana could then resume its downtrend toward $82 or even $66.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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Polygon Primed to Tumble After Nine-Month Consolidation

Key Takeaways

  • MATIC appears to be breaking down of a descending triangle.
  • Breaching the $1.80 support level could ignite an 87% bear market.
  • MATIC needs to regain $2.90 as support. Failing to reclaim this level could result in another downturn.

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Polygon’s MATIC token looks poised to slide as it threatens to breach a crucial area of support. With nearly all financial markets in the red, Polygon bulls face a tough challenge ahead.

It looks like the pain isn’t over for Polygon.

As global markets slide, the Ethereum scaling solution’s MATIC token appears to be breaking down after enduring a nine-month-long consolidation period.

Polygon was one of the early stars of the 2021 bull market. MATIC rallied and the network saw rapid user growth near the start of the year as Ethereum-native DeFi projects like Aave and Curve expanded to the network. While it achieved a record high of $2.92 in late December, it has had a rocky start to 2022, trending down to $1.82.

While it reached a new all-time high last month, 15th-ranked cryptocurrency has been developing a descending triangle on its three-day chart since late April 2021. The series of higher lows recorded since then have formed the pattern’s hypotenuse, while the $2.90 resistance barrier has created the x-axis.

A recent spike in selling pressure appears to have pushed MATIC beyond the triangle’s hypotenuse, which can be considered a bearish breakout. If it can print a daily candlestick close below the 50-three-day moving average at $1.80, it could trend down by as much as 87% toward $0.27.

The bearish target derives from the measurement of the triangle’s y-axis added downward from the breakout point.

MATIC US dollar price chart
Source: TradingView

Polygon needs to stay above the 50-three-day moving average to try to invalidate the bearish outlook. More importantly, it would need to gain enough bullish momentum to retest the $2.90 resistance wall and turn it into support. At that point, it could potentially resume its uptrend and return to new highs.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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Dogecoin Up as Musk Says Tesla Is Accepting Payments

Key Takeaways

  • Dogecoin jumped today after Elon Musk revealed that Tesla had started accepting the asset for merchandise payments.
  • The meme coin has experienced a rally over the last few days.
  • It faces resistance as it attempts to advance further.

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Dogecoin has enjoyed an upward jolt fueled by news of mainstream adoption. Although prices have reached critical resistance, a breakout could be on the horizon. 

Tesla Now Accepting Dogecoin

Dogecoin is back in the spotlight thanks to Elon Musk. 

The Tesla and SpaceX CEO posted a tweet Friday confirming that his electric car company had started accepting Dogecoin for merchandise payments. The announcement appears to have helped DOGE rally, adding to a winning streak the meme coin has enjoyed throughout this week. The asset spiked within minutes of Musk’s announcement and is currently trading at $0.19, up 35.7% in the last three days. 

Despite the significant gains Dogecoin has posted over the last few days, the asset has some hurdles to overcome to maintain its bullish momentum. 

It has reached a critical area of resistance represented by the hypothenuse of a descending triangle. Its price action has been contained within the descending triangle since April 2021. Although the recent uptrend shows that DOGE is gaining pace, it has not yet decisively closed above $0.20. Moreover, it must breach the 50-three-day moving average at $0.23 to confirm a potential breakout from the consolidation pattern. 

If Dogecoin breaches the 50-three-day moving average, sidelined investors could be encouraged to re-enter the market. That could potentially help Dogecoin surge toward $0.35. Still, it remains to be seen whether the buzz surrounding Tesla’s announcement will endure. 

Dogecoin US dollar price chart
Source: TradingView

It is worth noting that any signs of weakness around the current price levels could lead to a rejection that pushes Dogecoin back to $0.15. Breaching the critical area of demand could signal a break of the 200-three-day moving average, likely resulting in further losses. It could then try to find support around $0.08 or even $0.05. 

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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Did Bitcoin Flash Its Reversal Signal? Top Trader Looks at BTC’s Dip Below $40,000

A popular crypto trader says Bitcoin (BTC) could be flashing a signal that means its price woes are about to turn around.

The pseudonymous crypto analyst known as Cheds tells his 35,700 YouTube subscribers that BTC flashed a “false break” after briefly plummeting below $40,000 on Monday.

Bitcoin has since rebounded and is currently trading at $43,691.93.

Explains the trader,

“One of the most powerful signals in all of technical analysis is where you have a ‘false break’ and a run.

So in my analysis in Bitcoin Live – other people have talked about this, this isn’t like genius-level analysis – but I basically told them, ‘Hey if we dip below $40k, and we don’t pretty much immediately recover it, we’re in major trouble. But if we dip below $40k and we get back above it, you want to buy it.’

… So we had that false break. We had that spring below $40k, and what does that do? That sets up a change in momentum. Now we need follow-through.”

In October, Cheds said there was a strong possibility that a Bitcoin futures exchange-traded fund (ETF) would launch. He also predicted that this would send BTC on a rally that topped out somewhere around $64,000, and then it would correct down to $40,000.

The trader also predicted that after Bitcoin corrects to the $40,000 level, an ascending triangle would form. Ascending triangles often suggest breakouts to the upside when validated.

Cheds notes in his new video that Bitcoin flashed the same spring that happened when it briefly dipped below $30,000 in July.

Does that mean BTC is about to break out via an ascending triangle? The analyst says he doesn’t know.

“Now the $30k spring brought us to $67-69k. Will the $40k spring get us right back on track for the weekly ascending triangle to $100k?

I don’t know. I really don’t know.” 

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Ethereum Hits Crucial Level After Breaking Below $3,000

Key Takeaways

  • Ethereum dipped below $3,000 today.
  • The 50-week moving average now holds as stable support.
  • ETH needs to breach $3,300 to be able to rebound swiftly.

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Ethereum has started the week in sluggish mode after its price suffered another 7% dip. While many market participants are displaying signs of fear, the number two crypto appears to have found vital support.

Ethereum Finds Stable Support

Ethereum broke below $3,000 earlier today as the cryptocurrency market continues to bleed. The global crypto market cap shed more than $280 billion following the latest dip.

ETH is 36.8% short of its all-time high price of $4,870 recorded in November 2021. It’s lost about 17.4% of its value since the beginning of 2022.

Despite the significant losses it has incurred over the last few weeks, ETH appears to have found stable support.

The 50-week moving average on the weekly chart is holding strong after facing its first test since May 2021. Ethereum has successfully maintained this critical support level throughout previous bull cycles, which may hint that a rebound is on the horizon.

The Fibonacci retracement indicator, measured from the June 2021 low of $1,700 to the November 2021 all-time high of $4,870, suggests that Ethereum must regain $3,300 as support to attract buyers. Moving past this resistance level could generate enough bullish momentum to push ETH toward $3,700 or $4,120.

Ethereum US dollar price chart
Source: TradingView

If Ethereum fails to gain the strength it needs to rebound, a breach of the 50-week moving average could be imminent. Failing to hold the support level could generate panic among investors, increasing the potential for another sell-off. ETH could then crash toward the 78.6% Fibonacci retracement level or the 100-week moving average. These key areas of interest sit at $2,400 and $1,700 respectively.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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Bitcoin Struggling Against Bearish Momentum

Key Takeaways

  • Bitcoin has broken below a strong foothold at $45,000. 
  • The next critical support zone lies between $39,000 and $37,300.
  • Failing to hold above this level could send Bitcoin to $30,000 or lower.  

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Bitcoin is struggling to find a stable support floor as bears appear to have taken over. Historical price action suggests that BTC must hold above $37,300 to avoid capitulation. 

Bitcoin Bulls Put to Test

Bitcoin has breached the $45,000 support level, and is threatening to dip lower. At press time, Bitcoin was trading just under $43,500.

The Fibonacci retracement indicator, measured from Jun. 2021’s low at $28,750 to the all-time high at $69,000, suggests that Bitcoin will continue its descent. The next critical demand barrier underneath the flagship cryptocurrency lies between $39,000 and $37,300. 

Such a crucial interest zone might have the strength to hold since the Tom DeMark (TD) Sequential prepares to present a buy signal on the weekly chart. The bullish formation forecasts that around Jan. 17, Bitcoin could enter a one-to-four week run-up or a new upward countdown. 

The buying pressure that might be generated in the next two weeks is critical for Bitcoin to regain the 50-day moving average at $50,000 as support and march towards record highs.

Failing to gain enough steam can be devastating for the bulls as the 100- and 200-day moving averages are the last demand zones underneath BTC. These key levels sit at $30,000 and $19,000, respectively.  

Source: Trading View

Although a capitulation event may appear out of the question given the strong fundamentals behind Bitcoin, the Relative Strength Index suggests otherwise. 

The RSI appears to have behaved a certain way each time Bitcoin is capitulated since the 2014 bear market. This momentum indicator tends to drop to the 42 level, rebound, and then breach this support floor to mark the beginning of a sell-off. 

Similar market behavior occurred over the past six months. In Jul. 2021, the RSI bounced off the 42 level to reach 69 in Nov. 2021. The rejection pushed the RSI back to 42, where it currently holds. If history were to repeat itself, it is reasonable to assume that capitulation towards $19,000 is near. 

Source: Trading View

While Bitcoin appears to head lower, the bulls must prepare to defend the $39,000-$37,300 support wall at all costs. Such a crucial demand zone can represent one of BTC’s last opportunities to resume its uptrend for some time.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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Chainlink Eyes Possible Bull Run

Key Takeaways

  • Chainlink is currently down almost 55% from all-time highs, but has traded in a parallel channel since April of 2018.
  • LINK is trading a critical support levels that historically indicate a future uptrend.
  • LINK must maintain critical support above $17 on the lower boundary of the parallel channel to validate the bullish thesis.

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Chainlink appears to be trading at a crucial support level that has previously marked the beginning of a bull run. If history repeats itself, LINK could rise towards new record highs.

Chainlink Reached a Local Bottom

Chainlink appears ready to kick off 2022 on the right foot. 

Although LINK is down nearly 55% from an all-time high of about $53 in May 2021, it appears to be holding above a crucial area of support. The lower trendline of a parallel channel, where the token has been contained since April 2018, could serve as a rebound point.

Every time Chainlink has dropped to this technical formation’s lower boundary since then, the downtrend has reached exhaustion before prices move back to the pattern’s middle or upper edge. From this point, LINK usually gets rejected, which is consistent with the characteristics of a parallel channel.

Similar price action to the past four years could see Chainlink rise to the channel’s middle trendline at $67 or even the upper trendline at $180. 

Source: Trading View

The Relative Strength Index is currently hovering around 48, adding credence to the optimistic outlook. This indicator usually remains in the 40-90 range with the 40-50 zone acting as significant support in an uptrend. 

The RSI’s recent rebound from the 42 level suggests that Chainlink continues in a bull market and has more legs to go up. 

Source: Trading View

It is worth paying attention to the parallel’s channel lower boundary at $17 and the RSI’s 42 support. Any decisive break among these crucial areas of interest could invalidate the bullish thesis and result in a steep correction. Under such circumstances, Chainlink might dive towards the 200-week moving average at $10. 

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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This key trading pattern hints at the continuation of Fantom’s (FTM) 125% rebound

Fantom (FTM) looks poised to hit a new record high in the coming sessions after its 125% price rebound from $1.23 on Dec. 14, 2021, to $2.84 on Jan. 3, 2022 triggered a classic bullish reversal setup. 

Dubbed inverse head and shoulders (IH&S), the setup appears when an asset forms three troughs below a so-called neckline resistance, with the middle trough (the head) deeper than the left and right shoulder. 

The price of FTM has recently undergone a similar price trajectory, as shown in the chart below. As a result, FTM has a common resistance in the range defined by $2.55 to $2.74, which encompasses the length of the inverse head and shoulders pattern.

FTM/USD daily price chart featuring inverse head and shoulders pattern. Source: TradingView

Could Fantom rally by another 50%?

In a perfect world, an IH&S pattern would normally result in a bullish breakout once the price closes decisively above the neckline level. Ideally, the upside target be equal to the maximum distance between the head and the neckline, when measured from the breakout point.

On Monday, FTM almost completed its IH&S formation by reaching its neckline. As a result, the Fantom token’s next move could be a bullish breakout above the $2.55 to $2.74 resistance range. In doing so, it would pursue a run-up toward $4.33, based on the setup presented in the chart below.

FTM/USD daily price chart featuring the IH&S’s breakout setup. Source: TradingView

A sharp price pullback from the neckline range, accompanied by a spike in volume, would risk invalidating the IH&S setup. In that case, the next ideal support line may come near $2.08. This would be based on FTM’s volume profile visible range (VPVR), a metric that displays trading activity over a specified period at specified price levels.

FTM/USD daily price chart featuring volume profile target. Source: TradingView

Are there risks of overvaluation?

Downside risks in the Fantom market also appeared in the form of its relative strength index (RSI), a metric that measures the magnitude of the asset’s recent price changes to evaluate its overbought or oversold conditions.

Relative Strength Index in a nutshell. Source: Investopedia

In detail, FTM’s daily RSI entered an overbought territory on Jan. 3 as its reading marginally jumped above 70. The technical indicator suggests FTM is overbought and that it should undergo a certain degree of correction to neutralize its market sentiment.

In layman’s terms, an RSI reading above 70 is usually seen as a signal to sell. However, the sell-offs typically do not necessarily come right after RSI jumps into the overbought zone.

Related: 5 cryptocurrency projects that made waves in 2021

Based on multiple RSI corrections spotted between August and September 2021, the FTM price appears to extend its upside momentum even after the indicator crosses above 70. At its best, the daily RSI had reached almost 89 on Sep. 9, coinciding with the FTM price hitting the then-record high of $1.99.

FTM/USD daily price chart featuring RSI-led corrections. Source: TradingView

That somewhat leaves FTM with the possibility of pursuing its IH&S profit target of $4.33 despite its overvaluation risks. What could follow is a correction towards its 20-day exponential moving average (20-day EMA; the green wave in the chart above) around $2.09.

This would bring the price near to the VPVR support at $2.08, as discussed above.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.