Bitcoin and most major altcoins are falling, but the charts suggest that a recovery could be just around the corner.
Bitcoin (BTC) extended its slide on May 12, but analyst Philip Swift, co-founder of trading suite DecenTrader and creator of the LookIntoBitcoin data resource, does not expect a deeper correction. He said it was “interesting to see that the ratio of long to short positions has been going up as the price has been trending lower.”
One of the reasons that keeps analysts bullish is the Bitcoin halving, which has followed a fixed cycle so far and analysts expect it to continue. Citing past cycles, investor and entrepreneur Alistair Milne said now is the time to buy.
However, in the short term, Bitcoin could come under pressure from the rally in the US Dollar Index (DXY). Normally, the DXY has an inverse correlation with the performance of Bitcoin.
What are the important support levels that can attract buyers of Bitcoin and major altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin Price Analysis
Bitcoin formed a long-legged doji candlestick pattern on May 10, indicating indecision between bulls and bears. The sellers resolved it to the downside with a break below the support line of the symmetrical triangle pattern.
The moving averages have completed a bearish crossover with the 20-day exponential moving average ($28,142) sliding below the 50-day simple moving average ($28,496).
This, along with the RSI in negative territory, indicates that the bears are in command. The next downside target is $25,250. This is an important level for bulls to defend, as it is the neckline of the inverse head and shoulders pattern.
If the BTC price bounces from this level, the bulls will once again try to push the BTC/USDT pair above the resistance line. On the other hand, a break below $25,250 could open the doors for a potential drop to $20,000.
Ether Price Analysis
Ether (ETH) turned down from the 20-day EMA ($1,866) on May 10, indicating that sentiment has turned negative and traders are selling rallies.
The ETH/USDT pair broke out and closed below the May 11 support line, signaling the resumption of the correction. The pair could next reach the 61.8% Fibonacci level of $1,663. This level is likely to attract heavy buying by the bulls.
The first sign of strength will be to break out and close above the 20 day EMA. Such a move will indicate that the bears may be losing their grip. The ETH price could then reach the psychologically important level of $2,000.
BNB Price Analysis
BNB (BNB) continued its journey south and reached near the immediate support at $300. This level had acted as strong support on April 3 and March 15. This level had acted as strong support on April 3 and March 15, hence the bulls try to defend it again.
In the short term, the $300 level can start a bounce, but it is likely to face some heavy selling at the 20-day EMA ($319). This would raise the prospect of a break below $300. The BNB/USDT pair could then drop towards the next strong support at $280.
This negative view will be invalidated in the short term if the price turns higher and breaks above the moving averages. Then the pair could rally towards the resistance above $338. For now, the pair can continue to oscillate within the broad range of $280-$338.
XRP Price Analysis
The bulls are struggling to push and hold XRP (XRP) above $0.43, indicating that demand is drying up at higher levels.
The dip of the 20-day EMA ($0.45) and the RSI near the oversold territory indicate that the bears are in control. The sellers will try to sink the XRP/USDT pair below the $0.40 support. If they do, the pair could complete a 100% retracement and crash to $0.36.
Conversely, if the XRP price bounces from $0.40, the bulls will once again try to push and sustain the pair above $0.43. Buyers will have to push the price above the resistance line to signal the start of a sustained recovery.
Cardano Price Analysis
The long tail on the May 11 candle for Cardano (ADA) shows that the bulls are trying to buy dips to the uptrend line.
The dip of the 20-day EMA ($0.38) and the RSI in the negative territory suggest that the bears have the upper hand. They will try to sell on any rally attempt from the 20 day EMA. If this happens, the ADA/USDT pair will fall back towards the uptrend line.
Re-touching a support level multiple times tends to weaken it. A break below the uptrend line could drag the ADA price down to $0.33 and $0.30 thereafter.
Conversely, if the bulls push the price above the moving averages, Cardano price could rally to the neckline of the inverse head and shoulders pattern.
Dogecoin Price Analysis
The bulls have managed to protect the $0.07 level for the past few days but have been unable to initiate a relief rally in Dogecoin (DOGE). This suggests that buying fades at higher levels.
The bears will try to further bolster their position by dragging the price below $0.07. If they do, the DOGE/USDT pair could drop as low as $0.06. This level is likely to act as support, but the bears could pose a strong challenge at the downtrend line.
If the DOGE price leaves the downtrend line and breaks below $0.06, the selling could pick up momentum. The pair could drop to the critical support of $0.05. A break and close above the downtrend line will be the first sign that selling pressure may be easing.
Polygon Price Analysis
Polygon (MATIC) has extended its decline below the breakout level of $0.94. This has pushed the RSI into oversold territory, indicating that the selling may have been overdone in the short term.
The MATIC/USDT pair could rally and retest the breakout level of $0.94. This level is likely to witness a fight between bulls and bears. If the MATIC pair pulls back from $0.94, the bears will have turned the level into resistance. This would increase the possibility of a drop to $0.69.
On the other hand, if the buyers kick the price above $0.94, it will suggest that the bulls are trying to get back in the game. Polygon price could then rally to the resistance line, where the bears will once again mount a strong defense.
Solana Price Analysis
Solana (SOL) has been trading near the immediate support of $19.85 for four days. This shows that the bulls are buying the dips, but have not been able to initiate a meaningful rally.
The 20-day EMA ($21.56) has started to turn lower and the RSI is in the negative zone, indicating that the shorts have a bit of an advantage. If the SOL pair pulls back from the current level or the downtrend line, sentiment will remain negative. The SOL/USDT pair could drop as low as $18.70.
Conversely, if the bulls break through the downtrend line, the pair will be range bound between $19.85 and $27.12. The pair could first rally to $24 and then try to rally to $27.12.
Polkadot Price Analysis
Polkadot (DOT) rallied from the strong support of $5.15 on May 10, but the bulls were unable to take advantage of this move. This suggests that there are no buyers at higher levels.
The bears have seized this opportunity and are attempting to sink the price below the vital support of $5.15. If they succeed, it will be the beginning of the next bearish leg. The DOT/USDT pair could then crash as low as $4.50.
If the DOT price reverses direction from the current level and breaks above the 20-day EMA ($5.68), it will suggest a solid buy on the lower levels. The pair could first rally to the 50-day SMA ($6.06) and then rally to the downtrend line.
Litecoin Price Analysis
Litecoin (LTC)’s rebound from the strong support of $75 is facing strong selling near $82. This shows that shorts pounce on every small rally.
The bears will make another attempt to pull the price below $75. If they do, the LTC/USDT pair could resume its downtrend and slide towards the crucial support at $65. Buyers are expected to defend this level vigorously.
This article does not contain investment advice or recommendations. All investing and trading involves risk, so readers should do their own research before making a decision.