Investors chose to flee risky assets after the crisis and eventual bankruptcy of Silicon Valley Bank (SVB). The S&P 500 Index plunged 4.55%, while Bitcoin (BTC) is down close to 9% this week.
The collapse of SVB sparked a crisis in the cryptocurrency space, with USD Coin (USDC) losing its peg to the US dollar after it became known that $3.3bn of Circle’s $40bn USDC reserves were held at SVB. After trading near $0.87 on March 11, USDC has broken above the $0.96 mark at press time.
The SVB bankruptcy has added to near-term uncertainty, with investors watching for any hint of contagion to other US regional banks.
In uncertain times, it’s best to stay out of it. However, if there is no domino effect after the SVB debacle, certain cryptocurrencies could start to recover. All of the selected cryptocurrencies in this article are trading above the 200-day SMA, a key level that long-term investors look at to determine if the asset is in a bullish or bearish phase.
Let’s study the charts of Bitcoin and four altcoins that could perform well if the sector sees a recovery in the coming days.
Bitcoin has pulled back to the 200-day SMA ($20,389) again. Buyers are expected to defend this level with all their might, as a break below could intensify selling.
To the upside, the 20-day exponential moving average ($22,042) is likely to act as a major hurdle. If the price turns down sharply from the 20-day EMA, the BTC/USDT pair could retest the support at the 200-day SMA. If this level cracks, the pair could drop to $18,400 and then $16,300.
If the bulls want to avoid the dip, they will have to push the price above the 20 day EMA. If they do, the pair could pick up momentum and shoot towards the overhead resistance of $25,250.
On the 4-hour chart, the bulls are trying to rally from $19,550, but the bears are aggressively defending the 20 EMA. If the pair turns back from the current level, the bears will try again to sink the pair below $19,950. If they succeed, the pair could drop as low as $18,400.
Conversely, if the price rises and breaks above the 20 EMA, it will suggest that the short-term selling pressure may be easing. This could start a rally towards $21,480, where the bears will once again pose a strong challenge. If this level is broken, the pair could reach $22,800.
Ether (ETH) fell below the 200-day SMA ($1,421) on March 10, but the long tail of the day’s candle shows solid buying at lower levels.
The rally is facing resistance near $1,461. If the price turns lower from the current level and reaches the 200-day SMA, it will signal that the bears are selling on a shallow bounce. This will increase the probability of a break below $1,352. The ETH/USDT pair could then slide to $1,100.
If the bulls want to avoid the dip, they will have to push the price above the 20-day EMA ($1,548). If they do, the pair could rally as high as $1,743, where the bears could erect a strong barrier again. A break above this level would open the doors for a possible rally to $2,000.
The 4 hour chart shows that the pair is attempting a bounce. The 20 EMA is flattening out and the RSI is just below the midpoint, indicating a balance between supply and demand.
This scale will tip in favor of the buyers if they push and hold the price above $1,500. If they do, the relief rally could reach $1,600. On the other hand, if the price turns down and breaks below the uptrend line, the advantage will shift in favor of the bears. In that case, the pair could retest the strong support at $1,352.
Polygon (MATIC) corrected sharply from $1.56 on Feb. 18 and reached the 200-day SMA ($0.94) on March 10. The long tail of the candle for the day shows that the bulls are fiercely defending the level.
The bulls will try to push the pair down to the 20-day EMA ($1.15), where the bears are likely to mount a strong defense. If the price turns down from this level, it will suggest that sentiment remains negative and traders are selling rallies.
This could raise the prospects of a drop below the 200-day SMA. If that happens, the MATIC/USDT pair could crash as low as $0.69.
Conversely, if the buyers push the price above the 20 day EMA, it will suggest that the bulls are back in the driver’s seat. The pair could reach the resistance at $1.30.
The rally from $0.94 has reached the 20 EMA. This is an important level to watch. This is an important level to watch as if the price sustains above it, the pair could rally as far as $1.15.
This level may again act as strong resistance, but if the bulls stop the next decline above $1.05, it will suggest that the downtrend may be over. This would open the doors for a possible rally to $1.30.
This positive view will be invalidated in the short term if the price turns lower and breaks below the $0.94 support.
While most of the major cryptocurrencies have fallen to or below their 200-day SMA, Toncoin (TON) is still well above the level. This suggests that traders are not rushing out.
The TON/USDT pair has formed a symmetrical triangle pattern near the local high. The price action inside the triangle is random and volatile.
Normally, the triangle acts as a continuation pattern. This means that the trend that was in force before the formation of the setup resumes. In this case, if the buyers push the price above the resistance line of the triangle, the pair could start a move towards $2.90.
Conversely, if the price continues to decline and breaks below the triangle and the 200-day SMA ($1.90), it will suggest that the bears are in control. This could push the price towards $1.30. This move will indicate that the triangle behaved as a reversal setup.
On the 4 hour chart, the downsloping 20 EMA and the RSI in negative territory indicate that the shorts have the upper hand. If the price turns lower from the current level and breaks below $2.18, the decline is likely to extend to $2.
Conversely, if the bulls push and hold the price above the 20 day EMA, it will suggest that the bulls are attempting a comeback. The pair could go as high as $2.45, where the bears could mount a strong defense. If this level is broken, the bulls will try to pierce the triangle near $2.50.
OKB (OKB) is in a corrective phase, but one small bright spot for bulls is that it is well above its 200-day SMA ($26).
The next support on the downside is the 50% Fibonacci level at $36.13 and then the 61.8% retracement level at $30.76. The bulls are likely to protect this area with all their might.
If the price rises from this zone, the OKB/USDT pair could rally to the 20-day EMA ($45.48). This is an important level to watch as a breakout and close above it will signal that the corrective phase may be over.
On the other hand, if the price falls below $30.76, investors will rush out. The pair could drop to the 200-day SMA.
On the 4 hour chart, the downsloping 20 EMA and the RSI in negative territory suggest that the bears have the upper hand. There is minor support near $37.50, but if it gives way, the pair could reach $36.13.
Conversely, if the price rises and breaks above the 20 EMA, it will suggest that the bulls are trying to regain control. The pair could reach $44.35. This is important resistance for the bears, as if it is broken, the price could reach $50.
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.