Bitcoin (BTC) and most of the major altcoins continue to witness a bloodbath on January 21 and the result of the most recent recession has been a $200 billion reduction in market capitalization.
A new report from Huobi Research, in collaboration with the Blockchain Association Singapore, forecasts that Bitcoin will enter a bear market in 2022. The liquidity tightening measures adopted by the US Federal Reserve and other central banks around the world and the regulatory action of the authorities could be spoilers. and keep cryptocurrency prices in check.
Calls for a bear market have not affected the MicroStrategy CEO’s resolve, Michael Saylor, who is determined to keep the company’s Bitcoin holdings. Saylor said in a recent interview with Bloomberg that the company’s strategy is to acquire and hold Bitcoin and not sell.
Could Bitcoin and most major altcoins start a relief rally from their strong support levels? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin attempted a rally on Jan. 20 when the bulls pushed the price to the 20-day exponential moving average ($43,041). However, the bears had other plans as they sold this rally and pushed the price lower as seen on the long wick of the day’s candlestick.
The selling continued today with the BTC/USDT pair breaking below the strong support at $39,600. There is minor support at $37,332.70. The bulls are likely to defend this support zone with all their might.
The oversold level in the relative strength index (RSI) also points to a possible consolidation or bounce. If the subsequent relief rally rises above the 50-day simple moving average (SMA), it will indicate that the downtrend may be over.
Conversely, if the price plummets below the support zone, the bearish momentum could pick up and the pair could slide to $30,000.
ETH/USDT
Ether (ETH)’s long wick on the Jan 20 candle indicates that the trend remains negative and traders are selling on relief rallies at strong resistance levels.
The selling has continued today and the bears have pushed the price below the immediate support at $2,928.83. This opens the doors for a potential drop to $2,652 where buyers are anticipated to mount a strong defense.
If the price bounces off $2,652, the bulls will try to push the ETH/USDT pair back above the 20-day EMA and the resistance line of the channel. If that happens, the pair could signal a change in trend.
Conversely, If the bears sink and sustain the price below $2,652, the selling could accelerate and the pair could drop to $2,000.
BNB/USDT
Binance Coin (BNB) turned down from the 20-day EMA ($474) on Jan. 20, which indicates that the bears are aggressively defending this resistance. The sellers will now try to push the price below the Jan 10 intraday low of $405.60.
The falling moving averages and the RSI in the negative territory indicate an advantage for the bears. If the price sustains below $405.60 and the descending channel, the selling could intensify and the pair could drop to $325.
Conversely, if the price bounces off $405.60 or the support line of the channel, the bulls will once again try to push the BNB/USDT pair above the 20-day EMA and the resistance line of the channel. If they do, it will be a sign of a possible trend reversal.
ADA/USDT
Cardano (ADA) broke out and closed below the moving averages on Jan. 20. The long wick on the day’s candlestick showed that the bears continue to sell on rallies.
If the bears sustain the price below the moving averages, the ADA/USDT pair could drop to the critical $1 support. This is important support to watch out for because it has not been breached at close for about ten months.
If the price rises from the current level and breaks above the moving averages, it will indicate that traders are piling on the dips. Buyers will have to push and hold the pair above the descending channel to signal a possible trend reversal.
SOL/USDT
Solana (SOL) formed an intraday candlestick pattern on January 20. Traders aggressively sold higher levels and pulled the price below the immediate support of $130.
The SOL/USDT pair has dropped to the strong support at $116. If this level also does not provide support, the decline could extend to the support line of the descending channel. The falling moving averages and the RSI in the oversold zone suggest that the path of least resistance is to the downside.
Alternatively, if the price turns up from $116, the bulls will once again try to break out of the barrier at the 20-day EMA ($146). If they manage to do that, the pair could rally to the resistance line. A breakout and close above the channel could signal a change in trend.
XRP/USDT
Ripple (XRP) broke and closed below the $0.75 support on Jan. 19. The bulls tried to reclaim the level on Jan 20, but the long wick of the candlestick shows that the bears are still selling on the rallies.
The XRP/USDT pair has broken below the support at $0.69. If the bears hold the lower levels, the pair could extend its decline to $0.60. The falling moving averages and the RSI close to the oversold territory indicate that the sellers are in control.
This negative view will be invalidated if the price rises from the current level and breaks above the moving averages. Such a move could suggest accumulation at lower levels. The pair could then start its move up towards $1.
MOON/USDT
Terra’s LUNA token turned back down from the downtrend line on Jan 20, indicating that the bears continue to defend this level vigorously.
Although the 20-day index ($79) is flat, the RSI has dipped below 46, which indicates that the bears have a slight edge. If the price sustains below $73.95, the LUNA/USDT pair could start its decline towards the critical support at $62.46.
Contrary to this assumption, if the price bounces off the current level, the bulls will again try to push the pair above the downtrend line. If they are successful, it will indicate that the fix may be over. The pair could rally to $93.81.
DOT/USDT
Polkadot (DOT) has dipped below the critical support at $22.66, which is an important level to watch as it has not been broken above the close since mid-August of last year.
If the price bounces off the current level, the bulls will once again try to break above the upper hurdle at the moving averages. A breakout and close above the 50-day SMA ($27.08) will be the first indication that selling pressure may be easing. The bulls will have to push and sustain the price above $32.78 to signal a potential change in trend.
Conversely, If the DOT/USDT pair sustains below $22.66, it will suggest that supply exceeds demand and traders are rushing out. Afterwards, the pair could drop to the next support at $16.81.
AVAX/USDT
Avalanche (AVAX) turned back from near the 20-day EMA ($90) on Jan 20 and broke below the strong support at $75.50 today.
The falling moving averages and the RSI in the negative zone indicate that the bears are in command. A close below $75.50 will complete a descending triangle pattern, indicating that a top may be in place. The AVAX/USDT pair could then start its decline towards $50.
However, the bulls are unlikely to give up without putting up a strong fight. If the price bounces off the current level, the pair could rally to the 20-day EMA and then to the downtrend line. The bulls will have to overcome this hurdle to signal a possible end to the corrective phase.
DOGE/USDT
The bulls attempted to push Dogecoin (DOGE) above the moving averages on Jan. 20, but failed. This suggests that the sentiment remains negative and the bears are selling near the resistance levels.
The DOGE/USDT pair could now gradually drop towards the strong support at $0.13, where the buyers can step in to stop the decline.
If the price bounces off this level and rises above the moving averages, it will suggest that the range bound action may continue for a few more days.
The critical level to watch on the upside is $0.19 and $0.13 on the downside. The next trend move could start after the price breaks any level. Until then, random volatile moves within the range may continue.
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.
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