How is it possible that cryptos continue to astound onlookers? It’s probably the same reason why baby boomers currently hold most of the wealth: a generational paradigm shift occurred that changed the course of history. And such a shift may be upon us today.
Recall what Gallup said many years ago about wealth disparities between age cohorts. “As a generation, baby boomers –all of whom were in their prime working years during the economic boom of the 1980s and 1990s, and many of whom likely had 401(k)s at work –have above-average rates of stock ownership.”
Fast forward to today’s millennials and Generation Z and these groups have the same opportunity; it’s just a different asset class. Rather than putting their money into stocks, they’re pouring their resources into cryptos. As resource after resource affirms, virtual currency ownership skews young.
Look, even I’m surprised at the dramatic rally given how I was skeptical for a long time. But there’s power in numbers – and the young are only rising in prominence. Therefore, it’s time to wake up and consider these compelling cryptos before they really go bonkers.
Bitcoin (BTC-USD)
Frankly, Bitcoin (BTC-USD) is a tough nut to crack because it defies standard market logic. Last week, I expressed some concerns about how overheated the benchmark crypto was. It turned out, I was right to be skeptical – but only for a brief moment. Following a slight, almost imperceptible downturn, BTC has stormed higher.
In the past 24 hours, the original blockchain asset gained over 8% of market value. For the week, that brings the green ink to 7.8%. Presently, Bitcoin trades hands at just under $56,000. However, at this point, the $60,000 level seems almost a formality. Looking at its point-and-figure (P&F) chart, BTC printed a triple top breakout pattern. This price action implies intense upside pressure.
Again, given the impressive performance, I think 60K is a formality. However, I’d like to see volume more consistently confirm demand. If there is an immediate risk factor, it’s that Bitcoin is trading at a resistance level based on two standard deviations above the median BTC price.
To be fair, Barchart shows tranches of resistance from the current price to $60,189.23. Still, if Bitcoin doesn’t get the job done here, it will probably get it done after it reloads.
Ethereum (ETH-USD)
While Bitcoin naturally receives most of the attention, Ethereum (ETH-USD) could be the one to watch. Over the past 24 hours, ETH gained almost 4% of market value. However, in the past one-week period, the digital asset swung up slightly over 10%. At the moment, ETH trades hands at $3,222, above the critical 3K threshold.
Just like the benchmark crypto, ETH does face some questions. Based on its relative strength indicator of 80.98 points, the decentralized asset stands well into overbought territory. Further, I’d also like to see volume consistently confirm the rising price action. Right now, acquisition volume is relatively flat, which could signal a corrective action.
Looking at Barchart’s trader’s cheat sheet, Ethereum trades above key support levels based on standard deviation and what Barchart terms “pivot points.” Looking ahead, investors can expect resistance from $3,236 to $3,576. However, following the latter price level, there could be relatively clear skies ahead to $4,000.
Interestingly, though, ETH’s P&F chart shows a long tail up pattern. It’s possible, then, that a near-term reversal could take place. And that wouldn’t be surprising given how overheated Ethereum and other cryptos are.
Tether (USDT-USD)
As a stablecoin or asset pegged to a hard currency, Tether (USDT-USD) doesn’t attract the same level of “concern” as other cryptos. Basically, unless you’re trading extremely large volumes of USDT, you’re not really interested in the minutia of its movements. Instead, people convert their fiat wealth into Tether units for convenience’s sake. Should an opportunity arise, they can engage it immediately.
Nevertheless, it helps to keep an eye on USDT’s dollar peg to understand broader sentiment in cryptos. Should the dollar be worth less than its one-to-one ratio with Tether, this dynamic may indicate greater demand for blockchain assets. Conversely, if the greenback rises above the peg, fear and uncertainty may be clouding the decentralized ecosystem.
Interestingly, over the past week, Tether found itself below the 1:1 peg for a few days. However, sentiment increased significantly over the past 24 hours as Bitcoin and other key cryptos began moving higher in earnest.
Looking at the trader’s cheat sheet, Tether presently stands on neutral ground, with an equal number of resistance and support levels on both sides of the bull-bear spectrum. Overall, there’s nothing outlandishly unusual about USDT, which may put your mind at ease.
Solana (SOL-USD)
One of the hottest cryptos not named Bitcoin or Ethereum, Solana (SOL-USD) could see its market value rise even more. Over the past 24 hours since Tuesday early morning, SOL gained almost 7%. That helped erase its one-week loss to just below parity. At the same time, the blockchain asset is no longer overbought based on its RSI reading.
Stated differently, don’t be too shocked if Solana swings higher this week. Looking at its P&F chart, SOL has printed a low pole reversal pattern. Using the terminology of P&F analysts, the supply that made the SOL price fall has been absorbed. Now, demand is taking control of the market, which bodes well for the alternative cryptocurrency or altcoin.
Turning to Barchart’s trader’s cheat sheet, SOL appears to stand on neutral ground. On the plus side, at nearly $111, the bulls enjoy multiple support levels, ranging from around $90 to about $105. But on the challenging side of the narrative, resistance levels exist from $112.54 to almost $125.
Ultimately, though, if Solana can clear $125, it’ll (probably) be off to the races.
XRP (XRP-USD)
One of the more promising cryptos, XRP (XRP-USD) has nevertheless frustrated bullish investors recently. For about a year, XRP has chartered a series of higher lows. However, this formation got out of whack earlier this year. It’s only now that circumstances appear to have moderately improved. Nevertheless, there’s a lot of work to be done.
Specifically, XRP will need to take out upside resistance as represented by its 200-day moving average. Here, the good news is that after breaching the lower 50 DMA (which sits at 54 cents), XRP has made slow and steady progress. Of course, getting past the 200 DMA is but a small target. XRP really needs to get above the 60-cent level to restore credibility.
Looking at its P&F chart, the bulls will be aiming for 63 cents. Should it establish a baseline of support there, the next logical targets would be 75 cents, then 88 cents. Unfortunately, this directive will be easier said than done.
Yes, XRP has a ton of support between 49.1 cents through 53.5 cents. However, from 56 cents through 61 cents lies heavy resistance. Still, one good pop could change everything.
Cardano (ADA-USD)
Another popular altcoin known for helping to popularize the proof-of-stake (PoS) blockchain protocol, Cardano (ADA-USD) has been making some moves recently. Over the past 24 hours, ADA swung up more than 6%. That print helped mitigate the trailing week loss to only 1.3%. Moving forward, investors appear bullish, in part because the coin is no longer overbought.
Right now, ADA trades hands at 62.5 cents, noticeably above its 50 DMA of 54.2 cents. Also, its 200 DMA sits at 40.4 cents. As with other cryptos, a risk factor to monitor closely is the volume level. Not only is it not confirming the recently rally, acquisition volume has been fading since December. Ideally, if the optimists were to take control, you’d want to see a significant bump up in buying volume.
Looking at ADA’s trader’s cheat sheet, the blockchain asset enjoys significant support from 53.2 cents to just under 60 cents. However, upside resistance begins to get heavy at 63.7 cents. Further, you can expect the bears to apply pressure all the way to 69 cents.
If the bulls can get above the hump, 75 cents – then 88 cents – should be within realistic reach.
Avalanche (AVAX-USD)
Even if you’re not interested in Avalanche (AVAX-USD), you may want to keep an eye on it as it could provide a barometer for performances among other popular altcoins. Right now, AVAX trades hands at $39.37, having moved up almost 6% in the trailing 24 hours. That cuts its trailing-week loss to just under parity.
In terms of its price chart, Avalanche initially entered a corrective phase after getting slightly overbought. However, AVAX bounced off its 50 DMA, which should encourage the bulls. As well, the coin trades substantially above its 200 DMA, which sits at $22.98. However, the common risk factor affecting many other cryptos remains relevant for Avalanche: volume has been fading since December, raising questions about upward viability.
Turning to Barchart’s trader’s cheat sheet, AVAX enjoys significant support from $32.47 through $37.82. Therefore, I don’t expect a drop to $32 unless something wild happens. However, AVAX will face upside resistance between $40.43 through $44.41.
Of course, the good news is that if Avalanche can clear the resistance levels, $50 should represent a foregone conclusion. Like I said, keep an eye on AVAX.
On the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT and XRP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
