According to data from CryptoQuant, the total amount of Bitcoin (BTC) held in exchange reserves dropped from 2.8 million BTC in October 2019 to 2.4 million. Analysts believe that this steady decline in reserves means retail traders and whales may be accumulating Bitcoin as they expect prices to rise in the future.
Even though Bitcoin is still far below its lifetime highs, if it manages to close Q3 2020 above $10,590, that would be the second-best close in any quarter. Data from Skew shows this would only be behind the Q4 2017 closing price at $13,660.
All of this suggests that the crypto markets are moving into the hands of stronger investors who are not perturbed daily price fluctuations.
Daily cryptocurrency market performance. Source: Coin360
Institutional investors are said to have deep pockets and favor holding long-term positions. Data from Bybit shows that Grayscale Investments currently holds 449,900 Bitcoin, which is over 2% of Bitcoin’s maximum possible supply.
If institutional investors increase their allocations to cryptocurrencies, demand could eventually exceed supply and that could boost Bitcoin’s price.
Let’s study the charts to analyze the path of least resistance for the top-10 cryptocurrencies.
Bitcoin has been hovering around the 20-day exponential moving average ($10,732) for the past few days. Although the bulls had tried to break away on Sep. 29, they could not sustain the higher levels.
BTC/USD daily chart. Source: TradingView
The bears have not been able to capitalize on the weakness and sink the price below the $10,500 support. This shows indecision among the bulls and the bears about the next directional move.
The flat 20-day EMA and the relative strength index near the midpoint suggests a balance between supply and demand. It is difficult to predict the direction of the next breakout from this range.
However, sometimes, the movement of the RSI can provide some hints. If the RSI rises above the symmetrical triangle and the 55 level, it increases the possibility that the bulls may attempt a breakout of $11,178.
If they succeed, the BTC/USD pair can rally to $12,000 and then to $12,460. Conversely, if the bears sink the price below $10,500 and the uptrend line, a drop to $9,835 is likely.
The bears are attempting to stall the relief rally at the 20-day EMA ($361). If the price turns down and breaks below $337, Ether (ETH) could drop to $308.392.
ETH/USD daily chart. Source: TradingView
When the price fails to rise above the 20-day EMA in a down move, it suggests that the sentiment is negative and the bears are selling on rallies.
Both moving averages are sloping down marginally and the failure of the RSI to rise above the 50 level suggests that bears have the upper hand. A break below the critical $308.392 support could result in a fall to $240.
This negative view will be invalidated if the ETH/USD pair turns up and breaks out of the 20-day EMA. Such a move could result in a rally to $395.
The pullback from the Sep. 24 intraday low of $0.219712 has hit a wall at the 20-day EMA ($0.243). The failure of the bulls to push XRP above the 20-day EMA suggests that the bears may be shorting at this resistance.
XRP/USD daily chart. Source: TradingView
Both moving averages are sloping down marginally and the RSI is just below the 50 level, which suggests that bears are at a slight advantage.
If the bears can sink the XRP/USD pair below the $0.2295–$0.219712 support zone, the downtrend may resume with the next stop at $0.19.
Contrary to this assumption, if the pair turns up and breaks above the 20-day EMA, it will be the first sign that the selling pressure is reducing. A breakout of $0.26 will suggest a possible change in trend.
The failure of the bulls to sustain Bitcoin Cash (BCH) above the 20-day EMA ($227) for the past four days suggests a lack of demand at higher levels.
BCH/USD daily chart. Source: TradingView
If the bears sink the price below $223, a drop to $210 and then to $200 will be on the cards. A break below the critical support of $200 will be a huge negative as it could signal the start of a possible downtrend.
This negative view will be negated if the BCH/USD pair turns up and breaks out of the downtrend line and the overhead resistance at $242. Above this level, the up-move can reach $280.
The pullback in Binance Coin (BNB) reached the 61.8% Fibonacci retracement level of $29.0886 on Sep. 29 where it is facing resistance. However, if the altcoin does not give up much ground, the bulls will make one more attempt to push the price above $29.0886.
BNB/USD daily chart. Source: TradingView
If they succeed, the BCH/USD pair could move up to the 78.6% Fibonacci retracement level of $30.9884 and above it to $33.4084. The rising moving averages and the RSI in the positive zone suggest that the bulls have the upper hand.
The bears will try to pull down the price but the bulls are likely to buy the next dip to the 20-day EMA aggressively as the trend is up. The failure to sustain the price above the 20-day EMA will be the first sign of weakness.
The failure of the bulls to push the price above the 20-day EMA ($4.55) suggests weakness. Polkadot (DOT) has turned down and the bears will now try to sink the price below the $4–$3.5321 support zone.
DOT/USD daily chart. Source: TradingView
If they succeed, the DOT/USD pair could give up ground and drop to $2.782 and below it to $2. The gradually downsloping 20-day EMA and the failure of the RSI to sustain above 50 suggests that the bears have the upper hand.
However, if the pair again rebounds off $4 or turns up from the current levels, the bears will attempt to push the price above the 20-day EMA. If they can accomplish that, the pair may move up to $4.921 and then to $5.5899.
The failure of the bulls to sustain the price above the 20-day EMA ($10.60) could have prompted profit booking from the short-term traders. The bears will now try to capitalize on this weakness and sink Chainlink (LINK) below the immediate support at $9.3771.
LINK/USD daily chart. Source: TradingView
If they succeed, the LINK/USD pair may drop to $6.90. The 20-day EMA has started to turn down and the RSI has been sustaining below 50 for the past few days, which suggests that the bears have the upper hand.
However, if the pair rebounds off the $9.3771 support, a few days of range-bound action is possible. A break above $11.1990 will be the first sign that the selling pressure has reduced.
Bitcoin SV (BSV) turned down from the downtrend line on Sep. 28 but the bulls did not allow the price to dip below the 20-day EMA ($166). The buyers have today pushed the price above the downtrend line and are attempting to scale it above the 50-day SMA ($180).
BSV/USD daily chart. Source: TradingView
The 20-day EMA is turning up gradually and the RSI has risen into the positive territory, which suggests that the bulls are at a slight advantage. If they can propel the BSV/USD pair above the 50-day SMA, it will increase the possibility of a rally to $208.
Conversely, if the pair turns down from the 50-day SMA, it will suggest that the bears are aggressively defending this level. The sellers will then attempt to sink the pair below the $146.20–$135.00 support zone.
Crypto.com Coin (CRO) has been trading below the moving averages for the past few days but the bears have failed to sink the price below the immediate support at $0.144743.
CRO/USD daily chart. Source: TradingView
However, if the CRO/USD pair does not rise above the moving averages within the next few days, it could result in another round of selling that could challenge the $0.144743 support.
A break and close (UTC time) below this level will complete the descending triangle pattern, which has a target objective of $0.10607.
This bearish setup will be invalidated if the bulls push the price above the downtrend line of the triangle. Above this level, a move to $0.183416 and then to $0.191101 is possible.
The strong relief rally in Cardano (ADA) could not rise above the downtrend line on Sep. 28, but the positive sign is that the bulls have not allowed the price to dip below the 20-day EMA ($0.0955).
ADA/USD daily chart. Source: TradingView
The 20-day EMA is sloping up and the RSI has been sustaining above 50, which suggests that the bulls have the upper hand.
If the ADA/USD pair rebounds off the 20-day EMA, the bulls will once again attempt to push the price above the downtrend line. If they succeed, the pair could move up to $0.1280.
Contrary to this assumption, if the bears sink the pair below the 20-day EMA, a drop to $0.0855982 and then to $0.0755701 is possible.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.