Bitcoin started March on a positive note, but the month has historically posted lackluster gains, which could be an early warning sign for crypto investors.
Bitcoin (BTC) was marginally positive in February despite the S&P 500 Index (SPX) falling 2.61%. On the first day of March, Bitcoin has started on a positive note while the US stock markets are struggling. This shows that Bitcoin is trying to disassociate itself from the US markets.
One positive sign is that retail traders appear to have taken full advantage of the cryptocurrency bear market. Rather than panic and sell their holdings, traders have bought at lower levels. Glassnode data shows that wallets with at least one Bitcoin have been steadily increasing and are approaching 1 million for the first time ever.
Historically, March has been a mediocre month for Bitcoin. Data from Coinglass shows that Bitcoin closed the month of March with double-digit gains only twice in the last ten years, in 2013 and in 2021. Therefore, the possibility of continued consolidation in March remains high.
What are the critical levels that can hinder the recovery of Bitcoin and altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin’s $22,800 level has acted as solid support over the past few days, which is a positive sign. This indicates that sentiment remains bullish and traders view dips as a buying opportunity.
The bulls have cleared the first hurdle at the 20-day exponential moving average ($23,435) and will now try to push the price towards the crucial resistance of $25,250. This is an important level for bears to defend, as a break and close above it could attract big buying. Then the pair could shoot up to $31,000, because there are no major resistances in between.
Conversely, if the price turns down from $25,250, it will suggest that the pair may remain range bound for a few days. A consolidation near the local highs is a bullish sign, as it shows that buyers are not rushing out. The bears will have to dip and hold the price below $22,800 to make a dent in the bullish sentiment. This could initiate a correction towards $20,000.
Even after repeated attempts, the bears have failed to sink Ether (ETH) below the 50-day SMA ($1,600). This indicates that the bulls are buying the dips to the 50-day SMA.
The buyers will try to reinforce their position by catapulting the price above the upper resistance zone between $1,680 and $1,743. If they did, the ETH/USDT pair could start a rally towards $2,000. The bears could pose a strong challenge at $1,800, but this level is likely to be broken.
The first sign of weakness will be a breakout and close below the 50-day SMA. If this happens, short-term bulls might be tempted to take profits. Then the pair could drop to the support near $1,500.
The price action of the last few days has formed a symmetrical triangle pattern in BNB (BNB). This indicates indecision between buyers and sellers.
The bulls bought the dip to the support line on March 1, but the long wick on the day’s candle shows that the bears are keeping a fierce eye on the moving averages. If the price breaks below the triangle, the BNB/USDT pair could drop as low as $280.
Conversely, if the buyers push the price above the moving averages, the pair could reach the resistance line of the triangle. This remains the key level to watch in the short term, as a break above it could start a move higher towards $340, and subsequently towards the pattern target of $371.
Even after repeated attempts, the bears were unable to drag XRP (XRP) down to the strong support at $0.36. This suggests that the selling pressure is easing.
The bulls will now try to push the price above the resistance line of the descending channel. If they do, the XRP/USDT pair could rally to the overhead resistance of $0.43. Buyers will have to break through this resistance to clear the way for a potential rally to $0.52.
The bears probably have other plans. They will try again to stop the rally at the resistance line of the channel. If the price turns lower, the chance of a break below $0.36 increases. In that case, the pair could drop as low as $0.33.
Cardano (ADA) is trying to bounce off the strong support near $0.34. The rally could face resistance at the 20-day EMA ($0.37) as the bears will try to flip this level into resistance.
If the price turns down from the 20-day EMA, the bears will try to pull the ADA/USDT pair below the $0.34 support. If they do, the pair could start a deeper correction towards $0.32 and then $0.30.
Instead, if the bulls push the price above the moving averages, it will suggest aggressive buying at lower levels. The pair could then try to rally towards the neck of the developing inverse head and shoulders (H&S) pattern.
The bulls successfully defended the support near $0.08 for the past few days, but have not managed a strong bounce in Dogecoin (DOGE). This suggests that demand is drying up at higher levels.
Price action of the past few days has formed a bearish descending triangle pattern, which will complete on a breakout and close below support near $0.08. This negative setup has a target at $0.06.
Conversely, if the buyers push the price above the moving averages, the bearish setup will be invalidated. The more aggressive bears could cover short positions. The DOGE/USDT pair could attempt a rally to $0.10.
The sharp correction in Polygon (MATIC) is finding support at the 50-day EMA ($1.17). The bulls are trying to initiate a rally, but the long wick on the candlestick for the day shows that the bears are selling rallies to the 20-day EMA ($1.28).
If the price continues to decline, the bears will make one more attempt to drag the MATIC/USDT pair below the 50-day SMA. If they do, the pair could drop to the vital support of $1.05. The bulls are likely to buy hard at this level.
Conversely, a break above $1.30 could embolden the bulls. They will then try to push the price towards the overhead resistance of $1.57. The rise could also find obstacles at $1.42 and $1.50.
Solana (SOL) turned down from the 20-day EMA ($23.02) on Feb. 27, indicating that the bears are trying to turn this level into resistance.
However, the bulls are not giving up and are trying to break above the 20 day EMA again. Retesting a resistance in a short period tends to weaken it. If the buyers push the price above the 20-day EMA, the SOL/USDT pair could reach the resistance line.
This remains the key level to watch in the short term, as a break and close above it will signal a potential trend reversal. If the bears want to prevail, they will have to sink the pair below the $19.68 support.
Polkadot (DOT) broke below the 50-day SMA ($6.43) on Feb. 28, but the bears failed to take advantage of this advantage. This suggests that the buyers are trying to catch the more aggressive bears.
The 20-day EMA ($6.68) is the important level to watch in the short term. If the buyers push the price above this level, it will suggest that the short-term corrective phase may be over. The bulls will try to push the price towards the neckline of the current inverse head and shoulder pattern.
On the other hand, if the DOT/USDT pair turns down below the 20 day EMA again, it will suggest that the bears have turned the level into resistance. That will increase the probability of a drop to $5.50.
Litecoin (LTC) retracement found strong support at the 50-day SMA ($92). This suggests that the lower levels continue to attract buyers.
The bulls pushed the price back above the 20-day EMA ($95) on March 1, opening the doors for a possible rally to resistance above at $106. This level can act as a solid barrier, but if the bulls manage to break above it, the LTC/USDT pair can rally to $115 and then $130.
The important support to watch on the downside is the area between the 50-day SMA and $88. If this area fails to hold, the selling could pick up momentum and the pair could drop as far as $81 and then $75.
The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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.