During a bull market, negative news is digested quickly and collateral damage is often limited. Even when XRP price fell aggressively due to uncertainty about the outcome of the U.S. Securities and Exchange Commission lawsuit, other altcoins were largely unaffected.
Day view of crypto market data. Source: Coin360
As Bitcoin’s (BTC) strong rally takes a breather, several altcoins have broken out of their overhead resistance and are trying to resume their uptrend. Let’s look at some tokens that have risen sharply in the past few days and analyze their charts to see if the rally could stretch any further.
TAG / USD
Zilliqa’s Zilling Token (ZIL) rose sharply in 2020. Part of the rally could be attributed to the decentralized financial boom that dominated much of the year.
After the start of the decentralized exchange ZilSwap on October 5 and the non-custody participation on October 14, the token recovered significantly. These new features enabled the community to participate directly in the smart contract, while previously they had to do so through a third party.
To date, the community has used about 30.49% of the total outstanding offer, and the low 10 ZIL admission threshold may have sparked greater participation from token holders.
During the coronavirus pandemic, most people stayed indoors and spent their time on social media. Therefore, the timing for the launch of Zilliqas SocialPay could not have been better. The platform launched in May and rewards users for sharing Zilliqa’s updates and announcements on Twitter.
All of these fundamental developments could be the reason for the increase in the number of wallet addresses and monthly transactions in 2020. But can the token continue to outperform in 2021? Let’s study the diagrams to find out.
The altcoin was in a strong uptrend, rising from an intraday low of $ 0.0296388 on Dec. 12 to an intraday high of $ 0.0996 on Dec. 27, a rally of 236% in about two weeks . Usually these vertical rallies are unsustainable in the long run. Regular corrections or consolidations are required which can cool the uptrend and increase the longevity of the trend.
ZIL / USDT daily chart. Source: TradingView
The ZIL / USD pair formed consecutive candlestick patterns within a day on December 28th and today. This indicates a decline in volatility as the bulls and bears decide on the next change of direction.
If the inner day dissipates on the upside, the uptrend could resume. Conversely, if the inner daily candle is followed by a sharp downward move, the bears may have gained the upper hand and a deeper correction could be expected.
Therefore, if the bears pull the price below the 38.2% Fibonacci retracement level at $ 0.0728748, it is a decline to the 50% retracement level at $ 0.0646194 and then to the 20 day exponential moving -Average ($ 0.0570) possible.
A strong rally in this support suggests that positive sentiment will remain intact as traders pile on dips. The bulls will then attempt to resume the uptrend and if they can push the price above $ 0.0996 a rally to $ 0.14 is possible.
Conversely, if the price falls below the 20-day EMA, it suggests that there may be a short-term spike as bulls are not interested in buying dips.
LUNA / USD
The Luna token of the Terra Protocol appears to have benefited from a stronger takeover of the existing products and the planned introduction of new products. The Chai payments app recorded over 2.8 million transactions in November with a payment volume of over $ 90 million.
To capitalize on strong demand for US stocks, commodities and exchange-traded funds, Terra launched the Mirror Protocol on December 4th, which enables the creation and trading of synthetic assets. This could continue to attract traders as long as assets remain in a strong trend.
Terra is also trying to target the product recommendation marketing category that primarily benefits the direct referrer. The protocol plans to officially launch BuzLink, a marketing tool, in February 2021 that will reward the entire chain of referrals after the sale is complete.
Luna has risen from an intraday low of $ 0.45 on December 24th to an intraday high of $ 0.70 today, up 55% in a week. The rising moving averages and the relative strength index (RSI) near the overbought zone suggest that bulls have the upper hand.
LUNA / USDT daily chart. Source: TradingView
The LUNA / USD pair crossed the overhead resistance of $ 0.57 on December 28, completing a rounding pattern. This bullish setup has a target of $ 0.86.
However, today’s doji candlestick pattern with a long wick shows that traders are making gains at higher levels. This could bring the price down to the breakout level of $ 0.57.
If the pair rebounds from this level, or even the 20-day EMA ($ 0.51), it suggests that the bulls are in control. A break above $ 0.70 could resume the uptrend.
If, contrary to that assumption, the bears pull and hold the price below $ 0.57 and the 20-day EMA, it suggests that the recent breakout was a bull trap. The trend could favor the bears if the pair breaks below $ 0.45.
Vocational Education / USD
The coronavirus pandemic has made people and companies even more aware of the power of digital technology. VeChain developed the E-HCert app in collaboration with the Mediterranean Hospital of Cyprus to save COVID-19 test records. Following its successful implementation, Aretaeio Hospital has also joined the VeChain ecosystem to incorporate its laboratory testing services that will make the data easily accessible to patients when needed.
The VeChainThor blockchain recently received a 5-star blockchain service certificate from TÜV Saarland, a European certification body. This could boost confidence in its ecosystem and also improve investor sentiment about professional education brands. In a further surge, Grant Thornton Cyprus showed himself to be one of the masternodes of the VeChainThor Authority. These developments could open up new possibilities for the future.
VeChain Token (VET) has bounced back from an intraday low of $ 0.011724 on Dec. 23 to an intraday high of $ 0.02120375 today, an 80% increase in a short period of time. The bears are likely to defend the $ 0.02210 level aggressively as it has acted as stiff resistance for the past several months.
VET / USDT daily chart. Source: TradingView
However, if the VET / USD pair doesn’t break below $ 0.018, the bulls will make another attempt to push the price above $ 0.02210. If successful, the pair will complete a rounded basic pattern that has a target of $ 0.0353.
The 20-day EMA ($ 0.0165) has started to emerge and the RSI is above 60, suggesting that bulls have the upper hand. Even a consolidation between $ 0.018 and $ 0.0221 would be a positive sign and increase the possibility of an overhead resistance breakout.
Contrary to this assumption, a renewed rejection of the price at $ 0.02210 could result in profit bookings from the short-term traders, possibly causing the price to fall back below the moving averages. Such a move could indicate that the pair is consolidating in a large area for a few days.
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