BTC and some altcoins might be gearing up for an oversold move, but traders beware, it’s likely to be a dead cat bounce.
The US Dollar Index (DXY) has broken through the highs made in March 2020 and could next challenge the multi-year highs set in January 2017. Bitcoin (BTC) price action is generally inversely connected to DXY . Therefore, unless the dollar reverses its strong uptrend, a strong recovery for Bitcoin may be difficult.
Although Bitcoin has not confirmed a bottom, institutional investors appear to have started their buying at lower levels. Canada’s Purpose Bitcoin exchange-traded fund added 1,132 BTC to its holdings, according to data analytics platform Coinglass. Behavioral analytics resource Santiment also suggested that crowd interest in buying the dip hit a six-week high.
The cryptocurrency sector has been under pressure in 2022, but that has not reduced venture capital (VC) activity in different blockchain sectors. The first quarter of 2022 has seen venture capital investments of over $14.6 billion in the blockchain industry, representing 48% of the total investments made by venture capital in 2021. This shows the potential long-term growth of the industry.
Could Bitcoin and altcoins start a recovery from their respective support levels? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin’s rally on April 26 stalled at the 20-day exponential moving average ($40,618), suggesting sentiment remains negative and traders are selling on rallies. A minor positive is that the price has bounced off the support line of the ascending channel today, which indicates that the bulls are attempting to defend this level.
If the bounce holds, the bulls will once again strive to push the price above the 20-day EMA and the 50-day simple moving average (S42.038). If they are successful, it will suggest that the BTC/USDT pair could extend its stay within the channel for a few more days.
Conversely, if the price turns down from the current level or the 20-day EMA and breaks below the channel, it will suggest that the bears are in control. The pair could then slide to $34,300 and then $32,917.
ETH/USDT
Ether (ETH) once again turned down from the 20-day EMA ($3,014) on April 26, which indicates that the bears continue to sell on the rallies at this level. The bears will now try to push the price to the uptrend line.
If the bears sink the price below the uptrend line, the ETH/USDT pair could slide towards $2,450. The bulls will try to stop the decline at this level, but if they fail, the selling could accelerate and the pair could drop to $2,159.
Alternatively, if the price turns up from the current level, the buyers will make one more attempt to push the pair above the 20-day EMA. If they manage to do that, the pair could rally to $3,200 and then attempt a move higher to the 200-day SMA ($3,470).
BNB/USDT
Binance Coin (BNB) closed below immediate support at $391 on April 26, signaling short-term weakness. The bulls are currently attempting to push the price above the breakout level.
If they are successful, the price could rally to the 20-day EMA ($408). This is an important resistance to watch out for because if the bulls break through this hurdle, the BNB/USDT pair could rally to $431 and then attempt a rally to $460.
Contrary to this assumption, if the bears flip the $391 level to resistance, the BNB/USDT pair could resume its downtrend and drop towards the strong support at $350. The downsloping 20-day EMA and the RSI at the negative zone indicate that the path of least resistance is to the downside.
XRP/USDT
Ripple (XRP) long tail on the Apr 25 candle shows strong buying at lower levels. However, the bulls were unable to sustain the price above $0.70 on Apr 26, which resulted in another sell-off.
The 20-day EMA to the downside ($0.72) and the RSI close to the oversold zone indicate that the bears have the upper hand. If the price drops below the immediate support at $0.62, the XRP/USDT pair could plummet to the strong support at $0.55.
Contrary to this assumption, if the price bounces off the current level, the bulls will make another attempt to push and hold the pair above the breakout level at $0.69. If they are successful, the pair could rally to the 50-day SMA ($0.77).
SOL/USDT
The bulls have been defending the support line of the ascending channel for the past two days, but they have not been able to push Solana (SOL) above the 20-day EMA ($103). This suggests that demand dries up at higher levels.
The downward sloping 20-day EMA and the RSI below 44 indicate an advantage for the sellers. If the price turns down from the current level or the 20-day EMA, the possibility of a break below the ascending channel will increase. If that happens, the SOL/USDT pair could drop to the strong support at $75.
Alternatively, if the price turns up from the current level and breaks above the 20-day EMA, it will suggest a build up at the support line. The pair could rally to $110. A breakout and close above this level will suggest that the pair may extend its stay inside the channel for a few more days.
MOON/USDT
Terra’s LUNA token has been trading above and below the 20-day EMA ($91) for the past few days. The buyers pushed the price above the 50-day SMA ($94) on April 25, but could not sustain the higher levels.
The bears pushed the price below the 20-day EMA on April 26. If the price breaks down and sustains below $86, the LUNA/USDT pair could continue to slide towards the strong support at $75. Buyers are likely to defend this level aggressively.
If the price turns up from the current level and breaks above the 50-day SMA, the bulls will once again try to push the pair above the psychological resistance at $100. If successful, the pair can rally to the all-time high of USD 119.
The flat 20-day EMA and the RSI just below the midpoint do not give a clear advantage to either the bulls or the bears.
ADA/USDT
After repeatedly failing to break above the psychological $1 level, Cardano (ADA) has been gradually dipping towards the strong support at $0.74.
The 20-day EMA to the downside ($0.93) and the RSI close to the oversold territory indicate an advantage for the bears. The sellers will now try to sink the ADA/USDT pair below the strong support at $0.74. If they are successful, the pair could resume the downtrend.
Contrary to this assumption, if the price turns up from the current level or the support at $0.74, the bulls will try to push the pair above the 20-day EMA. If they do that, the pair could rally to $1. A breakout and close above this resistance could open the doors for a possible rally to $1.26.
AVAX/USDT
Avalanche (AVAX) has been trading between $65 and $99 for the past few days. The price has gradually dipped towards range support where buyers are expected to mount a strong defense.
If the price bounces off the current level, the bulls will try to push the AVAX/USDT pair above the 20-day EMA ($76). If they succeed, it will be the first indication that the bears may be losing control. A breakout and close above the 200-day SMA ($85) could open the doors for a potential rally to $99.
Alternatively, if the price turns down from the current level or the 20-day EMA and drops below $65, it could clear the way for a drop to $51. The 20-day EMA is sloping down and the RSI is in the negative zone. indicate that the path of least resistance is to the downside.
DOGE/USDT
Dogecoin (DOGE) spiked to the overhead resistance of $0017 on Apr. 25, but the bulls were unable to break above this barrier. The failure to do so may have attracted profit booking by short-term traders, which brought the price back below the 20-day EMA ($0.14) on April 26.
The 20-day EMA is flat and the RSI is close to the midpoint, which suggests range bound action in the short term. If the price breaks below the 50-day SMA ($0.13), the DOGE/USDT pair could drop to $0.12. The bulls are likely to defend this level vigorously, but if they fail to stop the decline, the next stop could be the psychological level at $0.10.
The next trending move could start after the bulls push and hold the pair above $0.17 or the bears sink the price below the support at $0.10. Until then, the volatile range-bound action is likely to continue.
DOT/USDT
Polkadot (DOT) has been stuck in a range between $23 and $16 for the past few days. This means that traders buy the dips to the support of the range and sell the rallies to the resistance level.
The price has bounced off the support and the buyers will now try to push the DOT/USDT pair above the 50-day SMA ($19.39). If they are successful, it will suggest that the pair can extend their stay within the range for a few more days.
Conversely, if the price drops and stays below $16, it will indicate that supply exceeds demand. The pair could then drop to the critical support at $14. This is an important level for the bulls to defend because a break below it could signal a resumption of the downtrend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
Market data is provided by the exchange HitBTC.