Bitcoin and select altcoins are attempting a recovery, but the most likely outcome of any breakout is strong selling at higher levels.
Bitcoin (BTC) continues to trade below $40,000 as bears try to flip the level into resistance. The soaring U.S. dollar index (DXY), which is usually inversely related to Bitcoin, favors the sellers. However, it is not all gloom and doom because the Bitcoin bulls seem to be taking clues from the Nasdaq (NDX), which has been hovering close to positive territory.
Although risky assets have been on the receiving end for the past few days, Bitcoin hodlers are focusing on the long-term bullish projections and ignoring the short-term weakness. Glassnode data shows that Bitcoin’s supply that has not moved for at least a year has hit above “64% for the first time ever.”
While speaking to Bloomberg, SkyBridge Capital founder Anthony Scaramucci said that the firm is bullish on cryptocurrency markets “over the three to five years.” The hedge fund now plans to reposition itself by allocating a majority of its assets under management to digital assets and become the “leading cryptocurrency asset manager and adviser:”
Could a further decline in Bitcoin and altcoins attract buying from long-term investors? What are the key levels to keep an eye on? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin dipped below the immediate support at $38,536 on April 2 but the bears could not build upon their advantage. The long tail on the day’s candlestick suggests strong buying near the support line of the ascending channel.
The buyers will now attempt to push the price above the 20-day exponential moving average (EMA) ($40,974). If they manage to do that, the BTC/USDT pair could rise to $43,000.
Conversely, if the price turns down from the 20-day EMA, it will suggest that the sentiment remains negative and bears are selling on rallies to strong overhead resistance levels. The pair could then decline to the support line of the channel.
A break and close below the channel could accelerate selling and the pair may slide to the strong support zone between $34,300 and $32,917. The bulls are expected to defend this level with all their might.
ETH/USDT
Ether (ETH) broke and closed below the 50-day simple moving average (SMA) ($3,022) on April 21 indicating weakness. The buyers tried to push the price back above the 50-day SMA on April 22 but failed, suggesting that the bears have flipped the level into resistance.
The bears pulled the price below the immediate support at $2,883 on April 25 but the long tail on the day’s candlestick suggests that bulls are aggressively buying at lower levels. If buyers propel the price above the 20-day EMA ($3,045), the ETH/USDT pair could rise to $3,200 and thereafter rally to the 200-day SMA ($3,477).
Conversely, if the price turns down from the psychological level at $3,000, it will suggest that bears continue to sell at higher levels. If the pair slips below $2,797, the pair could drop to the uptrend line.
BNB/USDT
BNB broke below the immediate support at $391 on April 25 but the long tail on the day’s candlestick shows that bulls are buying at lower levels.
If the price sustains and closes above $391, the bulls will strive to push the BNB/USDT pair above the 20-day EMA ($411). If they succeed, the pair could rally to the overhead resistance at $445.
On the contrary, if the price turns down from the current level or the 20-day EMA and breaks below $382, it will suggest that bears are selling on rallies. That could pull the pair to the strong support at $350. The downsloping 20-day EMA and the relative strength index (RSI) in the negative zone suggest that bears have an edge.
XRP/USDT
Ripple (XRP) broke below the strong support at $0.69 on April 25, indicating that the range-bound action has resolved in favor of the sellers. The 20-day EMA ($0.74) has turned down and the RSI is near the oversold territory, indicating that bears are in command.
If the price sustains below $0.69, the XRP/USDT pair could drop to the immediate support at $0.62. If the price rebounds off this level but does not rise back above $0.69, it will suggest that bears have flipped the level into resistance. That will increase the possibility of a drop to the strong support at $0.54.
Conversely, if the price turns up and rises back above $0.69, it will suggest that the markets have rejected the lower levels. The pair could then again attempt to break above the 50-day SMA ($0.78).
SOL/USDT
Solana’s (SOL) tight range trading resolved to the downside and the price has slipped to the support line of the ascending channel. This is an important level to keep an eye on.
If bears sink and sustain the price below the channel, the selling could intensify and the SOL/USDT pair could slide to the strong support at $75. The downsloping 20-day EMA ($104) and the RSI in the negative territory indicate that bears are in control.
Conversely, if the price rebounds off the current level with strength, it will suggest that bulls continue to defend this support with vigor. The buyers will then again try to push the pair above the 20-day EMA. If they do that, the pair could rise toward $122.
LUNA/USDT
Terra’s LUNA token slipped below the 20-day EMA ($91) on April 23 but the bears could not make use of this advantage. This suggests that selling dries up at lower levels.
The 20-day EMA ($91) is flat and the RSI is just above the midpoint, indicating a balance between supply and demand.
If the price breaks above the 50-day SMA ($94), the bulls will make another attempt to clear the overhead hurdle at $100. If they succeed, the LUNA/USDT pair could start its march toward the all-time high at $119.
The balance could tilt in favor of the sellers if the price turns down from the 50-day SMA and plummets below $87. That could pull the pair to the strong support at $75.
ADA/USDT
Cardano (ADA) has been stuck inside a large range between $0.74 and $1.26 for the past several days. This suggests that traders buy near the support and sell close to the resistance of the range.
After failing to cross above the resistance at $1.26 on April 4, the ADA/USDT pair has been declining toward the support of the range. The downsloping 20-day EMA ($0.95) and the RSI in the negative territory indicate that bears are in control.
The pair broke below the support at $0.87 on April 25 clearing the path for a possible drop to $0.74. This level is likely to attract strong buying by the bulls. If that happens, the bulls will try to push the pair above the 20-day EMA. If they manage to do that, it will suggest that the range-bound action may continue for a few more days.
Related: Could XRP price lose another 70% by Q3?
AVAX/USDT
Avalanche (AVAX) broke and closed below the uptrend line on April 21, which invalidated the possible ascending triangle pattern. The bears pressed upon their advantage and pulled the price near the strong support at $65.
The long tail on April 25’s candlestick suggests that bulls are buying the dips near $65. They will now attempt a relief rally, which could hit a wall at the 20-day EMA ($77).
If the price turns down from this resistance, it will suggest that the sentiment remains negative and traders are selling on rallies. The bears will then make one more attempt to sink the price below $65.
Conversely, a break above the 20-day EMA will suggest that the AVAX/USDT pair could remain range-bound between $65 and $99 for some more time.
DOGE/USDT
Dogecoin (DOGE) broke below the 50-day SMA ($0.13) on April 24 and the bears pulled the price to the strong support at $0.12 on April 25. The bulls bought this dip aggressively and have pushed the price back above the 50-day SMA.
If buyers sustain the price above the 20-day EMA ($0.14), the DOGE/USDT pair could attempt to rally to $0.15 and later to the strong overhead resistance at $0.17. The 200-day SMA ($0.17) is placed just above this level, hence the bears are expected to mount a strong defense at $0.17.
Alternatively, if the price turns down and breaks below the 50-day SMA, it will suggest that bears are unwilling to surrender and they continue to sell on rallies. The longer the price sustains below the 50-day SMA, the greater the possibility of a drop to the psychological level at $0.10.
DOT/USDT
Polkadot (DOT) turned down from the overhead resistance at $19 on April 24 and the bears are attempting to build upon this advantage and sink the price below the immediate support at $17.
If they manage to do that, the DOT/USDT pair could decline to the strong support at $16. The downsloping 20-day EMA ($19) and the RSI in negative territory indicate that bears have the upper hand.
Contrary to this assumption, if the price turns up from the current level, the bulls will make one more attempt to clear the overhead hurdle. A break and close above the 50-day SMA ($19) could clear the path for a possible rally to $23.
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.
