The sharp correction in Bitcoin (BTC) may have wiped many leveraged traders off the table, but the data shows whales and institutions aggressively bought the dip and now bulls have shown their determination to push the Bitcoin price back up $ 40,000. The total cryptocurrency market cap has also recovered and rallied back up $ 1 trillion.
Dan Morehead, founder and CEO of Pantera Capital, said he was behind his earlier forecast of $ 115,000 for Bitcoin in August this year. Morehead believes China’s digital yuan developments could boost cryptocurrency adoption and prove to be a bullish trigger.
Several altcoins have also turned positive and are following Bitcoin higher. Let’s examine the fundamental reasons for their rise to determine if there are any potential positive goals.
ZEC / USD
Christine Lagarde, President of the European Central Bank repeated her view that Bitcoin should be regulated by Bitcoin. Regulation can be a double-edged sword, and those who oppose it have argued that it has repeatedly failed in traditional finance. Therefore, as the votes for regulation increase, some investors may prefer privacy coins such as Zcash (ZEC).
The Zcash Foundation wants the community to increase gated adoption and applications to facilitate transactions with gated Zcash. To do that, the foundation plans to accelerate development of Zebra, a consensus-compatible Zcash node client written in Rust.
Zcash also completed its third major network upgrade called Blossom on December 11th. The upgrade cut block times in half, enabled faster transaction confirmations, lowered costs, and doubled network throughput.
While Zcash is taking necessary steps to improve user adoption, the project continues to suffer from heat due to its privacy tag. Recently, crypto exchange Bittrex announced that it was deletion ZEC along with two other privacy coins starting January 15th. Let’s see if any of these developments work in ZEC’s favor.
ZEC surged from an intraday low of $ 54.3150 on Jan. 1 to an intraday high of $ 120.7119 on Jan. 13, up 122% within two weeks. This rally has invalidated a bearish falling triangle pattern and this is a strong bullish sign.
However, the bears are unlikely to give up easily and they are currently trying to defend the USD 125.3626 resistance. The ZEC / USD pair could now retest the recent breakout level at $ 102.6824.
If the pair bounces off this support, it will suggest the level has turned to support and this could be used as a launch pad for a break above USD 125.3626.
If the buyers manage to reach that, the pair could climb to $ 140 and then to $ 160. A breakout of this backlash could pave the way for a rally to $ 220.
Contrary to this assumption, if the bears sink and hold the price below $ 102.6824, the decline could be as high as $ 84. Such a decline suggests that momentum has weakened.
KSM / USD
The recent crypto bull run has not only increased the price of Bitcoin, it has also rewarded altcoins that provide solutions to the problems that bog down existing projects. Dot (POINT) aims to address interoperability and scalability issues and recently traders have done just that pushed the price in the top five cryptocurrencies based on market capitalization. This also benefits his cousin, Kusama (KSM).
The forthcoming Substrate 3.0 release brings Ethereum compatibility and is expected to launch in the first half of this year. The upgrade could further increase Polkadot’s popularity. Meanwhile, the Plasm network became the first parachain on Polkadot’s testnet parachain, Rococo V1. The same code will run on Kusama, and a growing number of projects aimed at winning the Polkadot parachain slots auction will try Kusama first.
Although Kusama is its own unique network, its fortunes will closely follow Polkadot’s trajectory.
The charts show KSM in an uptrend as the price has risen from an intraday low on Jan. 11 at $ 57.877 to an intraday high of $ 85,239 today. This represents an impressive 47.27% rally within four days. Both moving averages are increasing and the relative strength index (RSI) is in the positive zone, indicating that bulls are in control.
The bears had attempted to start a correction on January 11, but the bulls aggressively defended the 50-day simple moving average ($ 58). This suggests strong demand at lower levels. The KSM / USD pair can go up to $ 88 and then to $ 100.
However, the long wick of the current candlestick suggests selling at higher levels. If the bears pull the price below $ 76, the pair could drop to the 20-day exponential moving average ($ 67). A strong rebound will keep the upward targets intact.
On the other hand, an interruption below the 20-day EMA can result in a drop in the 50-day SMA. If this support bursts, it could signal a trend change.
HGET / USD
Traders use derivative leverage in highly trending markets to maximize their profits. However, crypto markets can become volatile resulting in the fast ones liquidation of futures positions. Therefore, professional traders use options to limit their risk and participate in the rally, while also hedging their futures positions. In fast-moving markets, demand for options is likely to remain high, and this has benefited Hedget (HGET), the decentralized options trading protocol.
When trading options, pricing is an important factor to consider for both the buyer and seller. Hedget recently announced a partnership with the Umbrella Network and will provide volatility metrics from Genesis volatility to efficient DeFi option contract pricing. As more crypto traders understand and use options to hedge their risks, Hedget can continue to thrive.
HGET is up from $ 1,675 on Jan. 11 to an intraday high of $ 3.20 today, gaining 91% in a short space of time. This rally has pushed the price above the down trend line, indicating a possible trend change.
If the bulls can hold the price above the down trend line, the HGET / USD pair could move up to USD 3.945 where it could face solid resistance from the bears. If the price goes down from this level but does not fall below the down trend line, it will suggest the start of a new uptrend.
A break above $ 3,945 can push the price towards $ 5. This level can act like a stiff resistance, but if the bulls don’t give up much ground, the upward movement can resume. There are no significant resistance levels once USD 5 has passed, so momentum may increase.
The 20-day EMA ($ 2.23) has surfaced and the RSI is in the overbought zone, suggesting the path of least resistance is up. This positive opinion will be invalidated if the price falls below USD 2.75.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move carries risks, you should do your own research when making a decision.