Bitcoin and some altcoins are struggling to break above their immediate resistance levels, indicating that the bears are still in complete control.
Sentiment in the cryptocurrency ecosystem remains fragile as market participants assess the impact of the FTX crisis on various companies within and outside of the cryptocurrency sector. Trading firm QCP Capital said in its latest circular on Telegram that crypto assets may continue their underperformance into the new year. QCP projects Bitcoin (BTC) to crash to $12,000 and Ether (ETH) to $800.
Looking on the bright side, FTX could be the last major player to bite the dust during the current bear market cycle, according to CK Zheng, co-founder of crypto hedge fund ZX Squared Capital.
Zheng also added that institutional investors who have a long-term horizon can continue to invest in blockchain technology and select cryptocurrencies such as Bitcoin and Ethereum.
When the sentiment is bearish, the rumors create panic among traders who dump their positions out of fear. Usually these occasions form a background. Traders can remain cautious and avoid placing large bets until the dust settles and the markets confirm a bottom.
What are the important levels to watch and which ones might suggest that the correction may be over? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin continues to trade below the breakout level of $17,622, which is a negative sign. After a period of high volatility, the price has remained range-bound between $16,229 and $17,190.
The 20-day exponential moving average ($17,980) is falling and the RSI is in negative territory, indicating that the bears are in control. If the price turns down and falls below $16,229, the BTC/USDT pair could retest the Nov. 9 low of $15,588.
A break and close below this support could trigger panic selling, which could take the pair to $12,200. Conversely, if the buyers push the price above $17,190, it will suggest strong demand at the lower levels.
Then, the pair could rally to the upper resistance zone between $17.622 and the 20-day EMA. A break and close above this zone could signal the start of a new move higher.
ETH/USDT
Ether has been gradually losing ground over the past few days. The bears may try to seize their advantage by pulling the price below the immediate support of $1,171. If successful, the pair could drop to the support line of the descending channel pattern.
The downside 20-day EMA ($1325) and the RSI in the negative zone indicate that the sellers have the upper hand. If the bears pull the price below the support line of the channel, the selling could accelerate and the ETH/USDT pair could drop to $1,000.
The first sign of strength will be a break and close above the moving averages. Such a move could open the doors for a possible rally towards the downtrend line. The bulls will have to clear this hurdle to signal the start of a new bullish move.
BNB/USDT
BNB (BNB) once again fell near the strong support of $258 on Nov. 17, but the bulls held their ground. The buyers will now try to initiate a relief rally that could go to the 20-day EMA ($291).
The downsloping 20 day EMA and the RSI in the negative territory indicate that the bears are in control. If the price turns down from the current level or the 20-day EMA, the bears will make one more attempt to break the support at $258. If they can pull it off, the BNB/USDT pair could dip to $239 and then $216.
Conversely, if the bulls push the price above the 20-day EMA, the pair could rally to the overhead resistance of $300. The bulls will have to clear this hurdle to open the doors for a potential rally to $338.
XRP/USDT
XRP (XRP) is facing selling near the downtrend line. This suggests that the bears are trying to seize their advantage and push the price below the immediate support of $0.36.
The downsloping 20-day EMA ($0.41) and the RSI in the negative territory indicate that the path of least resistance could be to the downside. If the $0.36 level gives way, the XRP/USDT pair could drop to $0.32.
To invalidate this bearish view, buyers will have to overcome the tough challenge in the zone between the downtrend line and $0.41. If that happens, the pair could pick up momentum and rally towards the 50-day SMA ($0.45).
ADA/USDT
Cardano (ADA) remains in a strong downtrend and the bears are trying to sink the price below the crucial support at $0.31. However, the bulls likely have other plans and may try to defend this level aggressively.
Any relief rally is likely to face stiff resistance in the zone between $0.35 and the 20-day EMA ($0.36). If the price turns down from this zone, the probability of a break below $0.31 increases. The ADA/USDT pair could plummet to the support line. This is an important level to watch because if it is broken, the next stop could be $0.25.
This negative view could be invalidated in the short term if the buyers push the price above the 20 day EMA. The pair could then rally to the downtrend line. A break and close above this resistance could suggest a possible change in trend.
DOGE/USDT
Dogecoin (DOGE) has been trading between the moving averages for the past few days. This suggests that the bulls are buying the dips to the 50-day SMA ($0.08) and the bears are selling the relief rallies to the 20-day EMA ($0.09).
The downsloping 20 day EMA and the RSI just below the midpoint indicate a minor advantage for the bears. If the price turns down and falls below the 50-day SMA, the DOGE/USDT pair could drop to $0.07, and then $0.06.
The bulls likely have other plans as they will try to push and hold the price above the overhead resistance at the 20 day EMA. If successful, the pair could start a stronger recovery and rally towards $0.12.
MATIC/USDT
After trading between the moving averages of the past few days, Polygon (MATIC) closed below the 50-day SMA ($0.89) on Nov. 17. Buyers tried to push the price above the 50-day SMA on Nov. 18, but did not face strong resistance from the bears.
If the buyers push the price above the 50-day SMA, the MATIC/USDT pair could rally to the 20-day EMA ($0.95). The bears are likely to mount a strong defense at this level, but if the bulls break above this barrier, the pair could rally to $1.05.
Alternatively, if the price fails to rise above the moving averages, it will suggest that sentiment remains negative and traders are selling rallies. That could increase the probability of a drop to the uptrend line.
DOT/USDT
The price action of the last few days has formed a pennant, which generally acts as a continuation pattern. The falling moving averages and the RSI in the negative territory indicate that the sellers have the upper hand on Polkadot (DOT).
If the price turns down and breaks below the pennant, selling could pick up. The DOT/USDT pair could start the next leg of the downtrend with a break below $5.32. The next support on the downside is at $4.32.
Conversely, if the price continues to move higher and breaks above the pennant, it will invalidate the bearish setup. The pair could then rally to the 50-day SMA ($6.22). A break and close above this level could suggest that the near-term recession may be over.
UNI/USDT
Uniswap (UNI) turned down from the 50-day SMA ($6.43) on Nov. 16, but the bulls are attempting to form a higher low at $5.66.
The bulls will have to push and hold the price above the 50-day SMA to gain an advantage. If they manage to do that, the UNI/USDT pair could try a rally to $7.36 and then $7.79.
The long wick on the November 18 candle shows that the bears are defending the moving averages. The downside 20-day EMA ($6.20) and the RSI just below the midpoint suggest that the bears have an advantage. A break and close below $5.66 can clear the way for a retest of $5.14.
USDT/LTC
Litecoin (LTC) broke out and closed above the 20-day EMA ($59) on Nov. 17 and the RSI jumped into positive territory, indicating that the bulls have a slight advantage.
The move up is likely to face stiff resistance at $65. If the price turns down from this level, the LTC/USDT pair could drop back towards the moving averages.
Contrary to this assumption, if the buyers push and hold the price above $65, the bullish momentum could pick up and the pair could attempt a rally to the overhead resistance at $75.
The bears are expected to defend this level with all their might. If the price turns below $75, it will suggest that the pair may extend its stay within the $46 to $75 range for a few more days.
Points of view and opinions expressed herein 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.