Bitcoin and altcoins continue to bounce off underlying support zones, raising the possibility of a strong move lower.
Bitcoin (BTC) pulled back sharply on April 21, maintaining its close correlation with US equity markets, which reversed their direction after US Federal Reserve Chairman Jerome Powell hinted that a rise in 50 basis point rates were “on the table” in May. Selling continued today as investors cut risky assets in anticipation of an aggressive stance from central banks to curb rising inflation.
Veteran trader Peter Brandt recently said in a tweet that the Nasdaq 100 (NDX) was showing a similar formation as it did before it tanked in 2000.
If history repeats itself, the NDX could witness a sharp correction. That may be negative for the crypto markets in the short term due to the close correlation between Bitcoin and the NDX.
The subdued price action in cryptocurrencies and the weak macro environment have resulted in reduced Google searches for the term Bitcoin and Ethereum. Even cryptocurrency trading volumes have been trending down for some time. According to Blockchain.com, total trading volumes on major cryptocurrency exchanges plunged to $165.8 billion on April 19, the lowest level since October 2020.
Could Bitcoin and altcoins continue their move lower or is it time for a relief rally? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin broke above the 50-day simple moving average ($41.977) on April 21, but the bulls were unable to sustain the higher levels as seen from the long wick on the daily candle. The price turned from $42.976 and settled below the 20-day exponential moving average ($41.478).
The selling has continued today and the bears are attempting to push the price down to the support line of the ascending channel pattern. The downsloping 20-day EMA and the RSI in the negative zone suggest that the bears have the upper hand.
If the price falls below the support line of the channel, the selling could intensify and the BTC/USDT pair could drop to $33,000.
Conversely, if the price breaks up from the current level or the support line, it will suggest that the bulls are actively buying lower levels.
The bulls will have to push and sustain the price above $43,000 to signal strength. The pair could then rally to the 200-day SMA ($47.965) and then challenge the resistance line of the channel.
ETH/USDT
Ether (ETH) has been stuck between the 20-day EMA ($3,087) and the 50-day SMA ($3,003) for the past few days. Several attempts to break out of this tight range have been unsuccessful, suggesting that the bulls are buying on the dips while the bears are selling on the upside.
The 20-day EMA on the downside and the RSI in the negative territory give a slight advantage to the sellers. If the price breaks below $2,883, the possibility of a drop to the uptrend line of the developing ascending triangle pattern increases.
The bulls are likely to mount a strong defense at this level. If the price bounces off the uptrend line, the buyers will make another effort to push the ETH/USDT pair above the 20-day EMA.
If they are successful, the pair could rally to the 200-day SMA ($3,486). A breakout and close above this level will complete the ascending triangle pattern, resulting in a possible trend reversal.
BNB/USDT
The long wick of the April 20 candlestick shows that the bears are selling on rallies near the overhead resistance at $445. Binance Coin (BNB) continued lower and broke below the 50-day SMA ($408) on April 21. of April.
If the bears sink the price below $391, the selling could accelerate and the BNB/USDT pair could drop to the strong support at $350. If the price bounces off this level strongly, it will suggest that the pair could remain range bound. between $350 and the 200-day SMA ($471) for longer.
Alternatively, if the price bounces off the strong support zone between the 50-day SMA ($408) and $391, the bulls will endeavor to push the pair to $445 and then the 200-day SMA. A breakout and close above this level could indicate a possible change in trend.
XRP/USDT
Ripple (XRP) has been stuck in a range between $0.69 and $0.91 for the past few days. Although the price rebounded from the range support on April 12, the bulls could not overcome the general hurdle at the 50-day SMA ($0.78), which indicates a lack of demand at higher levels.
The bears will now endeavor to push the XRP/USDT pair below the $0.69 support. If they manage to do that, the pair could drop to $0.62 and then $0.54. The 20-day EMA ($0.76) has started to turn down and the RSI is in the negative zone, which suggests that the path of least resistance is to the downside.
Alternatively, if the price bounces off $0.69 hard, it will indicate a strong accumulation by the bulls. The buyers will again try to break above the overhead barrier at $0.80 and push the pair to $0.91.
SOL/USDT
Solana (SOL) broke above the 20-day EMA ($105) on April 19, but the bulls could not sustain the higher levels. The bears pushed the price back below the 20-day EMA on April 20.
The selling has continued and the bears are trying to keep the price below the 50-day SMA ($101). If that happens, the SOL/USDT pair could drop to the support line of the ascending channel. This is an important level to watch because if it breaks, the pair could drop to the strong support at $75.
Contrary to this assumption, if the price bounces off the current level or the support line of the channel, the buyers will once again try to push the pair above $111. If they can pull it off, the pair could rally to $122.
ADA/USDT
Cardano (ADA) has been consolidating in a downtrend. The price turned down from the 50-day SMA ($0.97) on April 21, which indicates that the bears are aggressively defending the overhead resistance at $1.
The falling 20-day EMA ($0.97) and the RSI below 40 indicate that the bears have the upper hand. If the sellers break the price below $0.87, the selling could gain momentum and the ADA/USDT pair could drop to the critical support at $0.74. This is an important level for the bulls to defend because if it breaks down, the downtrend can resume.
The bulls will need to push and hold the price above $1 to signal that the bears may be losing control. The pair could then rally to $1.10 and then attempt a rally to the strong overhead resistance at $1.26.
MOON/USDT
Terra’s LUNA token turned down the psychological resistance at $100 on Apr. 21, but a minor silver lining is that the bulls have not allowed the price to sustain below the 20-day EMA ($91).
The buyers will now try to push the LUNA/USDT pair back above $100. If that happens, the bullish momentum could pick up and the pair could rally towards the all-time high of $119. The bears are likely to mount a strong defense at this level.
On the other hand, if the price turns down from the current level or overhead resistance at $100, the prospects for a break below the support at $88 increase. If the price sustains below this level, the pair could drop to strong support at $75. A breakout and close below the 200-day SMA ($68) could signal a possible trend reversal.
AVAX/USDT
Avalanche (AVAX) had been trading between the 20-day EMA ($80) and the uptrend line for the past few days. Usually, this narrow range trading results in a sharp trending move.
The 20-day EMA sloping down and the RSI in the negative territory indicate that the bears have an advantage. If the price sustains below the uptrend line, the developing ascending triangle pattern will be invalidated. That could sink the AVAX/USDT pair down to the strong support at $65.
Alternatively, if the pair turns up from the current level, the buyers will make one more attempt to push the price above the moving averages. If they are successful, the pair could rally to the overhead resistance zone at $99-$104.
DOGE/USDT
Dogecoin (DOGE) has been range bound in a downtrend. The price turned down from $0.15 on April 20 and fell to the 50-day SMA ($0.13) on April 21. This suggests that demand runs out at higher levels.
Repeated testing of a support level tends to weaken it. If the price breaks below the 50-day SMA, the bears will try to push the DOGE/USDT pair to the strong support at $0.12. The bulls are expected to defend this level vigorously, but if the support gives way, the drop could extend to the critical $0.10 level.
Conversely, if the price bounces off the 50-day SMA, the bulls will try to push the pair above the overhead resistance at $0.15. If they manage to do that, the pair could rally to the overhead resistance at $0.17.
DOT/USDT
Polkadot (DOT) has been in a wide range between $16 and $23 for the past few days. The bulls pushed the price above the 50-day SMA ($19) on Apr 20-21 but failed to sustain the higher levels.
This suggests that the bears are selling on the rallies. If the price breaks below the immediate support at $18, the DOT/USDT pair could drop to $17. The 20-day EMA ($19) gradually sloping down and the RSI just below the midpoint suggest a slight upside for the sellers.
Alternatively, if the bulls push and hold the price above the 50-day SMA, the pair could try to rally to the overhead resistance at $23. The bulls will have to overcome this hurdle to suggest the start of a new move higher.
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.