Top 5 cryptocurrencies to watch this week: BTC, SOL, AVAX, ALGO, AXS

Bitcoin (BTC) continues to face a strong sell-off as bulls attempt to reverse the $60,000 psychological level as support. Some analysts believe bitcoin could enter a correction phase as traders took profits following the successful launch of a bitcoin exchange-traded fund last week.

In the past, the Chicago Mercantile Exchange (CME) launched a bitcoin futures product on Dec. 18, 2017, ending a strong bull market and marking the start of a multi-year bear market. Following the Coinbase IPO (COIN) on April 4, 2021, there was a similar but smaller crash. This suggests that there may be a risk of the old adage "buy the news, sell the news" repeating itself.

Crypto Market Data Daily View Source: Coin360

However, some analysts were unfazed by the pullback. Encryption market intelligence firm Decentrader said, "There are zero cases of Bitcoin breaking through previous major all-time highs and failing to continue higher." They expect Bitcoin's bull market to continue, with a possible target of $72,000 and then $88,000.

Not all indicators are showing a bullish outlook at the moment. Binance’s bitcoin reserves rose to 400,000, according to data from Bybt, suggesting traders may be considering liquidating their positions.

Can Bitcoin Make a Strong Comeback, Boosting Sentiment in the Crypto Space? Let’s analyze the charts of the top 5 cryptocurrencies that are likely to continue to gain traction in the coming days.

BTC/USDT

Bitcoin faced a strong rejection in the $64,854-$67,000 range. The price could drop to the 20-day exponential moving average (EMA) ($58,315), which is a key level to watch. If the price rebounds strongly from this level, it will signal that market sentiment remains positive and traders buy on dips.

BTC/USDT daily chart source: TradingView

The bulls will then try again to push the price above the upper zone. If they can succeed, BTC/USDT could resume its uptrend, which could later lead to a target price of $84,533.12.

The upward-sloping moving averages and the relative strength index (RSI) are in positive territory, suggesting buyers have the upper hand.

Contrary to this assumption, if the price turns lower and breaks below the 20-EMA, it would suggest that a break above $64,854 could be a bull trap. BTC/USDT may then continue to slide towards the 50-day simple moving average (SMA) ($50,927).

BTC/USDT 4-hour chart Source: TradingView

BTC/USDT is correcting within the descending channel. The current support level is $58,739.17. If it breaks below this level, BTC/USDT may fall to the support line of the channel. This is an important level for bulls to defend, as a break below it could intensify the sell-off.

The 20-EMA has turned down and the RSI has dropped into negative territory, suggesting that the bears have the upper hand. This negative view will be invalidated if the price breaks out of the channel and moving averages. Such a move would increase the probability of a retest of the upper zone.

SOL/USDT

Solana’s long shadow on Oct. 22 shows that the bears are aggressively defending the overhead resistance at $216. On Oct. 23, the altcoin formed an intraday candlestick pattern, indicating indecision between bears and bulls.

SOL/USDT daily chart source: TradingView

This uncertainty dictates today’s downside, with the price likely to drop to the $177.79 breakout level. If the price bounces off this level, it will indicate that sentiment remains bullish and traders are buying on dips.

At that point, the bulls will once again attempt to push the price above $216. If they succeed, SOL/USDT could rise to $239.83. The slightly rising 20-EMA ($168) and the relative strength index are in positive territory, pointing to favor for buyers.

This positive view will be negated if the price continues lower and breaks below the 20-EMA. This will pull the price down to the trendline of the triangle.

SOL/USDT 4-hour chart Source: TradingView

The bears have pulled the price below the 20-EMA on the 4-hour chart. If the sellers sustain the price below the 20-EMA, it will indicate that the bullish momentum has weakened. Then, SOL/USDT could drop to $177.79, where buying is possible.

The first sign of strength will be a breakout and close above the downtrend line. Such a move would indicate that traders are buying on dips. This could push the price to $205.78, and if this resistance level is broken, SOL/USDT could rise to all-time highs.

AVAX/USDT

On October 21, Avalanche (AVAX) broke out and closed above the descending channel, which means that the correction may be over. The bulls will now attempt to resume the uptrend.

AVAX/USDT daily chart Source: TradingView

The long shadows on October 22 and 23 suggest that demand is drying up at higher levels. AVAX/USDT could fall to the moving averages.

A strong bounce off this support would indicate that traders continue to buy on dips. The bulls will then try again to push the price above $69.18. If they succeed, AVAX/USDT could rise to $73.41 before retesting the all-time high of $79.80.

Contrary to this assumption, if the price breaks below the moving averages, AVAX/USDT could drop to the strong support at $51.04. If this level is broken, a drop to the support line of the channel is likely next.

AVAX/USDT 4-hour chart Source: TradingView

The bulls pushed the price above the downtrend line of the descending triangle, invalidating the bearish pattern. However, the recovery was short-lived as the bears have pulled the price back below the 20-EMA. This suggests a sell-off at higher levels.

AVAX/USDT may now drop to the 50-SMA. If this support breaks below, the bears will attempt to pull the price back into the triangle. If that happens, it will suggest that the breakout above the triangle is a bull trap.

Conversely, if the price rises from the current levels or bounces off the downtrend line, it will indicate that the bulls are accumulating on dips. Buyers will then attempt to push the price above $69.18. A breakout and close above this resistance will indicate that bulls have the upper hand. Then AVAX/USDT may start heading towards all-time highs.

ALGO/USDT

Algorand (ALGO) has been trading within a symmetrical triangle for the past few days. The price has turned down from the resistance line of the triangle today, showing that the bears are unwilling to give the bulls their way.

ALGO/USDT daily chart source: TradingView

If the price breaks below the moving averages, ALGO/USDT could drop to the support line of the triangle. This is an important level for the bulls to defend, as if it breaks, the bears will try to pull the price to $1.51 and then $1.20.

Alternatively, if the price rises from the current level or support line and breaks out of the triangle, it will show that the bulls are in control. ALGO/USDT could then rally to $2.22 before retesting the all-time high of $2.55.

ALGO/USDT 4-hour chart Source: TradingView

Prices are being squeezed inside the triangle, suggesting that ALGO/USDT may be preparing for a strong directional move. The criss-crossing moving averages and RSI are near the midpoint with no clear advantage for either the bulls or the bears.

A breakout of the triangle would indicate that the bulls have priced in the selling from the bears, which could bring ALGO/USDT back to the upside. Conversely, a break below the triangle would indicate oversupply and a deeper correction could begin.

AXS/USDT

Axie Infinity (AXS) has formed a symmetrical triangle pattern, indicating indecision between bulls and bears. It is difficult to predict the direction of a breakout, but usually, a triangle is a continuation pattern.

AXS/USDT daily chart source: TradingView

If the price bounces off the support line, the bulls will try again to push AXS/USDT above the triangle. If they succeed, it would signal a resumption of the uptrend. AXS/USDT may then retest the all-time high of $155.27.

If buyers clear this overhead hurdle, bullish momentum could pick up. AXS/USDT could then rise towards the pattern target of $186.05.

Conversely, a break and close below the triangle would be the first sign of a deeper correction. AXS/USDT could fall to $103.22 first and then to the breakout level of $94.67.

AXS/USDT 4-hour chart Source: TradingView

The moving averages on the 4-hour chart have flattened out and the RSI has been oscillating between 40 and 62. This suggests that the market is in an equilibrium where traders are buying on dips at $115 and selling near $140.

A break and close below $115 could mean uncertainty has dictated the downside. This could pull the price down to the pattern target price of $90. Conversely, a break above $140 will signal the return of the bulls to the market. AXS/USDT could rise to $155.27 before reaching the pattern target price of $165.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.