On Feb. 9, United States Securities and Exchange Commission (SEC) Chairman Gary Gensler explained why the regulator cracked down on cryptocurrency exchange Kraken, forcing it to halt its cryptocurrency staking program. for US customers. This news may have flummoxed crypto investors and they sold aggressively. Bitcoin (BTC) plunged around 5% on February 9 and several altcoins followed suit as well.
The new round of selling has traders wondering if the bear market has resumed or if the decline should be interpreted as a buying opportunity. This question may be worrisome for investors, but for now the correction appears to be a normal corrective phase with cryptocurrencies giving back some of the gains made in January. However, it would be prudent to wait for the correction to finish and a bottom to be confirmed before considering further buying.
Former BitMEX CEO Arthur Hayes said in a Feb. 7 blog post that Bitcoin may continue its bull run in the first half of the year, but may face challenges in the second half. Along with Bitcoin and Ether, Hayes is also bullish on altcoins, but said the trick is getting the timing right.
What are the important support levels to watch for Bitcoin and altcoins in the short term? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Support at $22,800 was broken on Feb. 9, and Bitcoin plunged to strong support near $21,480. The lack of a strong bounce at this level suggests that the correction may deepen further.
Below $21,480, the sell-off could accelerate and the BTC/USDT pair could drop to the moving averages. The Relative Strength Index (RSI) has slipped into negative territory, indicating that the bears are trying to gain an upper hand in the short term.
The moving averages have completed a golden cross, but the bulls need to turn the 200-day simple moving average ($19,722) into support if they are to stay in the game.
A strong bounce out of the zone between $21,480 and the 200-day SMA will suggest that the bulls are trying to form a higher low. Afterwards, the pair could gradually pull back towards $24.255. The bulls will have to break above the resistance at $25.211 to suggest that the downtrend is over.
ETH/USDT
The bears did not allow Ether (ETH) to sustain above the $1,680 level, which may have tempted short-term bulls to book profits.
The moving averages have completed a golden cross, indicating a possible trend reversal, but the bears are unlikely to go down without a fight. The sellers will try to push the price below the moving averages and catch the aggressive bulls. If they can pull it off, the selling could intensify and a collapse to $1,200 is possible.
Instead, if the price rises from the moving averages, it will indicate that the bulls are trying to turn the 200-day SMA ($1,442) into support. Then the bulls will make another attempt to push the price above $1,680 and take control. The ETH/USDT pair could then start its march north towards $2,000.
BNB/USDT
BNB (BNB) nosedived below the breakout level of $318 on Feb. 9, which shows aggressive selling at higher levels. This clears the way for a potential dump to the 200-day SMA ($287).
The bulls are likely to defend the moving averages vigorously. If the price bounces hard off this support, the BNB/USDT pair could form an inverse head and shoulders pattern, completing on a breakout and closing above the neckline. This bullish reversal setup has a target of $440.
On the other hand, if the price falls below the moving averages, the selling could intensify and the pair could drop to $240.
XRP/USDT
After staying above the 200-day SMA ($0.39) for several days, XRP (XRP) plunged below support on Feb. 9. This suggests that the bears are trying to take over.
The 50-day SMA ($0.38) acted as strong support on Jan. 18, and the bulls are again trying to protect the level. If the price jumps from the current level and rises above the 200-day SMA, it will indicate strong demand at the lower levels. Then, the buyers will try to break above the $0.43 barrier and start an up move towards $0.51.
Conversely, if the 50-day SMA gives way, it will signal that the bears are back in the driver’s seat. The XRP/USDT pair could drop to $0.33.
ADA/USDT
The 200-day SMA ($0.39) acted as a strong hurdle for Cardano (ADA). Although the bulls pushed the price above the resistance on several occasions, they failed to take advantage of the strength.
The price turned down and slipped below the support at $0.38 on Feb. 9. The sellers will try to push the price towards the 50-day SMA ($0.33), which is likely to act as strong support. If the price bounces hard off the 50-day SMA, it will suggest that the bulls are trying to form a higher low.
On the upside, buyers will have to break above the zone between the 200-day SMA and $0.42 to hint at a potential trend change. That could increase the possibility of a rally above $0.44.
DOGE/USDT
Dogecoin (DOGE) dipped below the $0.09 support on Feb. 9 and reached the 50-day SMA ($0.08). This drop has pushed the RSI into negative territory, indicating that momentum has shifted in favor of the bears.
The bulls will have to defend the zone between the moving averages with all their might because if they don’t, the DOGE/USDT pair could fall to the important support near $0.07. If the price bounces off of this level, the pair may consolidate between $0.07 and $0.10 for a few days.
If the price bounces strongly from the current level, it will indicate that the bulls are striving to turn the 200-day SMA ($0.08) into support. If they do that, the pair could start its journey back to $0.10.
MATIC/USDT
Buyers pushed Polygon (MATIC) above the overhead resistance of $1.30 on Feb. 8-9, but could not hold the breakout. This shows that the bears sold the rally above $1.30.
However, a positive sign is that the bulls have not given up much ground to the bears. This suggests that the shallow dips are attracting buyers. This improves the prospects for a rally above $1.30. If that happens, the MATIC/USDT pair could rally to $1.45 and then $1.70.
Conversely, if the price turns down from the overhead resistance yet again, it will suggest that the bears continue to fiercely protect the $1.30 level. The bears will have to sink the price below $1.16 to make way for a retest of $1.05.
USDT/LTC
Litecoin (LTC) dipped from $102.50 on Feb. 8. This shows that a failure to break through resistance may have tempted short-term traders to book profits.
The bulls will try to stop the decline at the immediate support of $88, while the bears will try to push the LTC/USDT pair to the 50-day SMA ($84). A deeper drop will indicate that momentum has weakened and that could delay a resumption of the uptrend.
If the bulls want to resume the uptrend, they will need to quickly push the price above $98. That will signal positive sentiment, indicating that traders are buying on dips. The bulls will try again to break above the $102.50 barrier and start the next leg of the uptrend towards $115.
DOT/USDT
The failure of the bulls to push Polkadot (DOT) above $7.25 may have attracted short-term selling from traders and that has pushed the price to the 200-day SMA ($6.33).
Buyers will try to stop the dip in the area between the moving averages and make it a higher low. If they are successful, it will suggest that the DOT/USDT pair has started a bottoming formation. A break and close above $7.25 could attract more buying and open the doors for a potential rally to $10.
Conversely, if the price dips below the 50-day SMA ($5.59), it will suggest that the bears are back in control.
AVAX/USDT
Avalanche (AVAX) turned down the overhead resistance at $22 and reached the 200-day SMA ($17.88). Buyers are expected to defend the zone between the moving averages.
If the price bounces from the current level, the bulls will make one more attempt to push the price above $22. If they manage to do that, the AVAX/USDT pair is likely to pick up momentum and rally to $30.
Another possibility is that the price bounces off the moving averages but does not break above $22. That could result in a consolidation for a few days. The bears will have to sink the price below the 50-day SMA to gain an advantage.
The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should do their own research when making a decision.
