Bitcoin (BTC) and most of the major altcoins are turning lower from overhead resistance levels, indicating that sentiment remains negative and traders are selling every opportunity at hand.
Decentrader analyst Philip Swift said that the on-chain spent profit output ratio (SOPR) metric, which aggregates the buying price versus the selling price over a given period, indicates that traders are selling their Bitcoin holdings at a loss.
Another metric that is worrying traders is funding rates, which have slipped further into negative territory following comments from the US Federal Reserve. Cryptocurrency research firm Delph Digital expects Bitcoin to “make a lower low after recently testing the $34,000 level.”
Among several bearish projections was a long-term bullish forecast from Cathy Woods’ Ark Invest. The report predicted that the price of Bitcoin would exceed one million dollars in 2030 and that the Ether would reach between 170,000 and 180,000 dollars during the same period.
Could Bitcoin and most major altcoins bottom near current levels? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin is facing strong resistance in the upper zone between $37,332.70 and $39,600. This suggests that the bears are unwilling to give up their edge and are selling on rallies.
The pullback of the past few days has resolved the oversold levels in the Relative Strength Index (RSI). The bears will now try to resume the downtrend by taking the BTC/USDT pair below $32,917.17. If they do, the next stop could be $30,000.
On the other hand, if the price turns higher from the current level and breaks above $37,332.70, it will suggest accumulation at lower levels.
The buyers will then try to push the price above the 20-day exponential moving average ($39.714) and touch the 50-day SMA ($44.428). A breakout and close above this resistance will indicate that the downtrend may be over.
Ether (ETH) rallied above the overhead resistance at $2,652 on Jan 26, but the bears aggressively sold at the higher levels and pushed the price back below the channel.
Since then, buyers have struggled to push the price back into the channel. The bears will now attempt to resume the downtrend by dragging the price below the Jan 24 intraday low of $2,159. If they succeed, the ETH/USDT pair could drop to as low as $2,000 and then as low as $1,700.
The RSI has been inside the oversold zone for a few days now, which suggests that the selling may have been overdone in the short term. Therefore, the bulls could try a relief rally again, which could reach the 20-day EMA ($2,856).
This is a major hurdle for the bulls as the previous three relief rallies had all turned down from the 20-day EMA.
Binance Coin (BNB) bounced off the $330 support and re-entered the descending channel on Jan. 25, but the bulls are struggling to push the price towards the 20-day EMA ($424). This suggests a lack of demand at higher levels.
The bears will perceive an opportunity and will try to push the price back towards the strong support zone between $330 and $320. This is an important zone for the bulls to defend because if it breaks down, the BNB/USDT pair could plummet to $250.
Contrary to this hypothesis, if the price turns up from the current level, the bulls will try to push the pair above the 20-day EMA. If they succeed, the pair could rally to the resistance line of the channel. A breakout and close above the channel will signal that the downtrend may be over.
Cardano (ADA) has been trading near the psychological support of $1 for the past few days. This suggests that the bulls are defending the support but have failed to push the price higher.
The moving averages down and the RSI in negative territory suggest that the path of least resistance is to the downside. If the bears sink and sustain the price below $1, the ADA/USDT pair could drop to $0.80.
This negative view will be invalidated in the short term if the price rebounds from the current level and breaks above the moving averages. The pair could then test the resistance line of the channel. The bulls will have to overcome this barrier to signal a possible change in trend.
Solana (SOL) has been trading near the support line of the descending channel for the past few days. This suggests that the bulls are defending the support line, but have not been able to make a strong rebound from it.
The RSI has been trading in the oversold territory for the past few days, indicating that the correction may have been overdone in the short term. This indicates the possibility of a consolidation or a small pullback in the coming days.
If this occurs, the SOL/USDT pair could rally to the 20-day EMA ($118). A breakout and close above this level could clear the way for a possible rally to the resistance line of the channel.
This positive short-term view will be invalidated if the price turns down and sinks below the channel. The pair could then drop to $66.
The bulls attempted to push Ripple (XRP) above the overhead resistance of $0.65, but the long wick of the daily candle suggests that the bears are in no mood to budge.
Both moving averages are sloping down and the RSI is in the oversold territory, which indicates that the bears are in command. The sellers will now try to sink the XRP/USDT pair below $0.54 and test the psychological support at $0.50.
This negative view will be invalidated if the bulls push and sustain the price above the 20-day EMA ($0.68). This move will be the first sign that selling pressure might ease. The pair could then rally to the overhead resistance of $0.75.
Terra’s LUNA token has fallen back to the support line of the descending channel. This suggests that trades continue to sell on rallies.
The 20-day EMA ($68.8) turning down and the RSI close to the oversold territory indicate that the bears have the upper hand. If the bears sink the price below the support line of the channel, the selling could intensify and the LUNA/USDT pair could crash to $37.82.
Contrary to this hypothesis, if the price rebounds from the current level, the bulls will make one more attempt to push the pair towards the 20-day EMA. This level will again act as a stiff resistance, but if the buyers break through it, the pair could rally to the downtrend line.
Dogecoin (DOGE) turned down from the 20-day EMA ($0.15) on Jan. 26, indicating that the bears are selling near this overhead resistance. The price is currently inside the narrow range of $0.15 to $0.13.
While the 20-day EMA on the downside indicates advantage for the bears, the bullish divergence on the RSI suggests that the selling pressure might be easing. This state of uncertainty is unlikely to continue for long.
If the bulls push and sustain the price above the 20-day EMA, the DOGE/USDT pair could rally towards the overhead resistance of $0.19. Conversely, if the price breaks down and closes below $0.13, the pair could drop to the psychological support at $0.10.
Polkadot (DOT) has been trading close to the strong support at $16.81 for the past few days, but a small negative is that the bulls have not been able to make a strong rebound from it. This indicates a lack of demand at higher levels.
Now the bears will try to drag and keep the price below $16.81. If they do, the selling could intensify and the DOT/USDT pair could drop towards the next major support at $10.37. The moving averages down and the RSI in the oversold zone suggest that the path of least resistance is to the downside.
Conversely, if the bulls propel the price above $20.16, it will suggest a pickup in demand. Then the pair could rally to the 50-day SMA ($25.44). This is an important level to watch out for, as a break above it will signal a possible trend reversal.
The long wick on the January 26 Avalanche (AVAX) candle shows that the bears are defending the breakout level at $75.50. The bears will now try to sink the price to the strong support at $51.04.
If the price bounces off $51.04, it will suggest that the bulls are buying the dips at this level. This could keep the AVAX/USDT pair in a range between $75.50 and $51.04 for a few days.
A breakout and close above $75.50 will be the first indication that the correction might be over. The pair could then rally to the downtrend line.
On the other hand, if the price breaks below $47.66, it could start the next leg of the downtrend. Until then, the pair could remain volatile within the range.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. All investment and operation involves risk. You should do your own research when making a decision.
Market data is provided by the exchange HitBTC.