The Purpose Bitcoin (BTC) exchange-traded fund debuted on the Toronto Stock Exchange on Feb. 18 and has quickly ramped up trading volumes of about $400 million worth of shares in two days. This is quite impressive, considering that the equity market in Canada is only a fraction of the size of the U.S. markets. This shows strong demand for Bitcoin and investor's preference to take the ETF route to establish fresh positions
Last week, Bitcoin reached another important milestone when it hit the critical $1 trillion market capitalization on Feb. 19, making it the sixth asset on the list of top market cap companies in the world
The involvement of institutional investors and a market cap of over $1 trillion could allay the concerns of manipulation and liquidity raised by the U.S. Securities and Exchange Commission in the previous years as it rejected Bitcoin ETF applications
In a recent interview with CNBC, Ark Invest CEO
Cathie Wood said that “the probability of an ETF has gone up.” Wood
said the new SEC chairman Gary Gensler, who taught a digital currency class at
the Massachusetts Institute of Technology could be more open to crypto,
increasing the likelihood of an approved Bitcoin ETF
Although Bitcoin’s fundamental factors continue to improve, the near term could experience some turbulence due to the steepening of the U.S. Treasury curve.
Let’s analyze the charts of the top-5 cryptocurrencies that indicate the possibility of the resumption of the uptrend in the short term
BTC/USD
Bitcoin broke above the resistance line of the ascending channel on Feb. 19 and the bulls have managed to sustain the breakout. This suggests that traders continue to buy at higher levels
BTC/USDT daily chart. Source: The 20-day exponential moving average ($47,450) is sloping up and the relative strength index (RSI) is in the overbought zone, which indicates that bulls have the upper hand
Contrary to this assumption, if the price re-enters the channel, the bears will try to pull the price down to the 20-day EMA. A break below the channel will indicate a possible change in trend and the pair may then correct to the 50-day simple moving average
BTC/USDT 4-hour chart. Source: If they succeed, the pair may again drop to the 20-EMA. A bounce off of this support will suggest that the trend remains strong and the bulls are not waiting for a deeper correction to buy. The momentum could pick up if the bulls can propel and sustain the price above the channel
On the contrary, if the bears can sink the price below the 20-EMA, it will suggest profit-booking by traders. The trend could weaken if the pair plunges below the channel
AAVE/USD
AAVE has been consolidating between $392.50 and $545 for the past few days. A consolidation after a strong uptrend is a positive sign as it suggests that traders are not rushing to the exit because they anticipate higher levels in the future
AAVE/USDT daily chart. Source: If the buyers can push the price above $480, the AAVE/USD pair may rise to $545. A breakout and close above the $545 to $581.667 resistance zone could start the next leg of the uptrend that may reach $697.50 and then $814.397
On the other hand, if the bears can sink and sustain the price below $392.50, it will suggest that supply exceeds demand. That could start a deeper correction to the 50-day SMA ($297)
AAVE/USDT 4-hour chart. Source: Contrary to this assumption, if the bulls can push the price above the 50-SMA, a move to $500 is possible. A break above this resistance will enhance the prospects of a move to $545 and then $581.667
ATOM/USD
Cosmos (ATOM) is currently correcting in a strong uptrend. While the pullback is five days old, the bears have not yet been able to pull the price down to the 38.2% Fibonacci retracement level at $19.007. This shows a lack of sellers at lower levels
ATOM/USDT daily chart. Source: If the bulls can thrust the price above $26.55, the next leg of the uptrend could begin. The ATOM/USD pair could then rally to $32.173. If the bulls can conquer this level, the up-move may extend to $40
On the contrary, if the pair continues to fall, a drop to the 20-day EMA ($18.19) is possible. A strong bounce off this support could keep the uptrend intact but a break below it will suggest a deeper correction to the 61.8% retracement level at $14.347
ATOM/USDT 4-hour chart. Source: However, if the price rises from the support line of the descending channel, it will indicate accumulation at lower levels. On a break above the moving averages, a move to the resistance line of the channel is possible
A breakout and close above the channel could result in a retest of $26.55. On the other hand, a break below the channel may weaken sentiment. The pair could then decline to the 50% retracement level at $16.677
