BTC and altcoins remain at their current support levels, but this week’s comments from the Federal Reserve could be a determining factor in short-term price action.
US stock markets opened on a dovish note on May 2, but a small silver lining is that crypto markets, led by Bitcoin (BTC), remain above their immediate support levels. Price action in the coming days will be dictated by the Federal Open Markets Committee (FOMC) outcome on May 4th.
If the Fed delivers a negative surprise, markets could react lower. On the other hand, if the policy meets market expectations, the equity and crypto markets could attempt a recovery.
If history repeats itself, Bitcoin could witness a huge move in the month of May. According to data from on-chain analytics platform Coinglass, Bitcoin surged more than 50% in May twice in the past nine years, once in 2019 and once in 2017.
By comparison, the worst drop was in 2021, when Bitcoin plunged more than 35%. Considering the increased volatility since 2017, traders should be prepared for a potential roller coaster ride.
Could Bitcoin and altcoins sustain the recovery? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin bounced off the support line of the ascending channel on May 1, which indicates that the bulls are buying the dips at this level. The buyers will now try to push the price above the 20-day exponential moving average ($39.824).
If they manage to do that, it will suggest that the bears may be losing control. The positive divergence in the Relative Strength Index (RSI) also suggests that the bearish momentum may be easing.
Above the 20-day EMA, the BTC/USDT pair could rally to the 50-day simple moving average ($41,970). A breakout and close above this level could clear the way for a rally towards the 200-day SMA ($47.154).
Conversely, if the price turns down once more from the 20-day EMA, it will suggest that the bears continue to sell on each minor breakout. That could improve the prospects for a break below the channel.
If that happens, the selling momentum could pick up and the pair could plummet to $34,300 and then $32,917.
ETH/USDT
Ether (ETH) started a rally on May 1, but the bears are in no mood to let go of their lead. The long wick on today’s candle suggests that the bears continue to sell near the 20-day EMA ($2,939).
The bears will now try to sink the price to the uptrend line. This is an important level to watch because a break and close below it could clear the way for a possible drop towards the next support at $2,450.
Conversely, if the price turns up from the current level or bounces off the uptrend line, it will suggest that the bulls are trying to keep the ascending triangle pattern intact. A breakout and close above the 50-day SMA ($3,059) could open the doors for a possible move up to the 200-day SMA ($3,451).
BNB/USDT
Binance Coin (BNB) turned down from the 50-day SMA ($411) on April 29 and broke below the support at $391 on April 30. Buyers tried to push the price above $391 on May 1, but face selling at higher levels.
If the price turns down from the current level or the 20-day EMA ($401), it will suggest that the sentiment remains negative and traders are selling near overhead resistance levels. That could clear the way for a possible drop to the strong support at $350.
This negative view could be invalidated in the short term if the bulls push and hold the price above the 50-day SMA. If they do that, the BNB/USDT pair could rally to $431 and then attempt an up move to the 200-day SMA ($469).
SOL/USDT
Solana (SOL) broke below the support line of the ascending channel on April 29, invalidating the pattern. The sale continued on April 30, and the price dropped to $82.
The buyers attempted to push the price back into the channel on May 1st, but the long wick on the day’s candle suggests that the bears sold off higher.
If the price fails to break back up into the channel, the SOL/USDT pair could drop to the strong support at $75. This is an important level for the bulls to defend because failure to do so can resume the downtrend.
On the upside, a breakout and close above the 50-day SMA ($103) will suggest that the bears may be losing control.
XRP/USDT
Ripple (XRP) broke below the $0.62 support on April 29 and the bears extended the drop to $0.56 on April 30. The price rallied on May 1, indicating buying at lower levels.
The bulls are currently trying to push the price above the breakout level at $0.62. If they are successful, the rally could reach the 20-day EMA ($0.68).
This is an important level to watch out for because if the price breaks below this level, it will suggest that the bears are active at higher levels. Afterwards, the pair can drop to the strong support at $0.55. A break below this support could open the doors for a drop to $0.50.
Alternatively, if the bulls push the price above the 20-day EMA, the pair could rally to the 50-day SMA ($0.76). Such a move will suggest that the XRP/USDT pair could consolidate in a wide range between $0.55 and $0.91 in the near future.
MOON/USDT
Terra’s LUNA token bounced off the strong support at $75 on May 1, which indicates that the bulls are trying to defend this level. However, the bears are unlikely to give up easily as they will try to stop the rally at the downtrend line.
If the price turns below the downtrend line, the bears will make another attempt to push the LUNA/USDT pair below $75. If successful, the pair could complete a bearish head and shoulders pattern.
The bulls will try to stop the decline at the 200-day SMA ($70), but if this support breaks, the selling could gain momentum and the pair could drop to $50.
Conversely, a breakout and close above the downtrend line could suggest that the bears may be losing control. That could clear the way for a possible rally towards the psychological resistance at $100.
ADA/USDT
Cardano (ADA) dipped to the strong support at $0.74 on April 30, indicating that the bears remain in check. The price rebounded from the support on May 1, but the bulls are struggling to hold the higher levels.
This suggests that the bears are selling every minor rally. The bears will now try to sink and keep the price below the strong support at $0.74. If they manage to do that, the selling could accelerate and the ADA/USDT pair could resume its downtrend. The next support on the downside where buying can break is at $0.68.
Contrary to this assumption, if the price turns up from the current level or bounces off $0.74, the bulls will try to push the pair above the 20-day EMA ($0.87). If that happens, the pair could try to rally to $1.
DOGE/USDT
Dogecoin (DOGE) dipped below the 50-day SMA ($0.13) on April 29, but the bears were unable to challenge the strong support at $0.12. This suggests that the bulls continue to buy at lower levels.
The buyers tried to push the price above the 50-day SMA on May 1, but the bears were unwilling to budge. This suggests that the DOGE/USDT pair could range between the 20-day EMA ($0.13) and $0.12 for a few days.
If the bears sink the price below $0.12, the pair could drop to the psychological support at $0.10. The bulls are expected to defend this level vigorously. Alternatively, if the bulls push the price above the 20-day EMA, the possibility of a rally to $0.17 increases.
AVAX/USDT
Avalanche (AVAX) broke below the strong support at $65 on April 29 and followed it up with another move lower on April 30. The buyers started a rally on May 1 and are currently trying to push the price above the breakout level at $65.
The sellers will try to turn the $65 level into resistance. If they do that, the AVAX/USDT pair could extend the decline to the strong support at $51.
This is an important level for bulls to defend because a break and close below it can intensify selling. The pair can then resume its downtrend and plummet to the next major support at $32.
Conversely, if the bulls push the price above $65, the pair can rally to the 20-day EMA ($70). A breakout and close above this level will suggest that selling pressure may be easing. That could keep the pair in a range between $51 and $99 for some time.
DOT/USDT
Polkadot (DOT) dipped below the $16 support on Apr 30 and hit the critical $14 support. A minor upside is that the price bounced off $14 on May 1, indicating buying by the bulls.
The bounce faces selling at the $16 breakout level as the bears attempt to turn the previous support into resistance. If the price fails to break above $16, the possibility of a break below $14 increases. If that happens, the DOT/USDT pair could resume its decline and drop to the psychological $10 level.
To invalidate this view, the bulls will have to push and sustain the price above the 20-day EMA ($17). If they manage to do that, the pair can rally to $19, where the bears can once again pose a strong challenge.
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 .