Bitcoin (BTC) has broken back below the psychological support at $60,000. While this seems to be negative in the short term, the price action has continued to mirror its movement in 2017. If the similarity continues for the remainder of the year, Bitcoin bulls may be in for a party.
PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, recently proclaimed in a tweet that the second leg of Bitcoin’s bull market has begun. If Bitcoin’s price action continues to follow the S2F model, the analyst believes a rally to $100,000 to $135,000 may be possible by the end of the year.
Although Bitcoin garners the lion’s share of attention, cryptocurrency exchange Okcoin said in a recent report that institutional investors’ appetite for non-Bitcoin crypto assets has been growing. The report said that 53% of the purchases by institutional investors in September were in altcoins.
Is the current fall in Bitcoin a buying opportunity or the start of a deeper correction? How are the altcoins expected to react? Let’s analyze the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin failed to retest the overhead resistance zone at $64,854 to $67,000 on Oct. 25, which may have prompted short-term traders to book profits. That has pulled the price down to the strong support at the 20-day exponential moving average (EMA) ($58,948).
A break and close below the 20-day EMA will be the first sign that the bullish momentum may be weakening. If bulls fail to reclaim the level quickly, the selling could accelerate and the BTC/USDT pair could slide to $52,920.
The relative strength index (RSI) has dropped to the midpoint and the 20-day EMA is flattening out, suggesting a balance between supply and demand.
This advantage will tilt in favor of the bears if the pair slides and sustains below the 50-day simple moving average (SMA) ($51,556). On the other hand, a breakout to a new all-time high will indicate that bulls are back in command.
ETH/USDT
The bulls tried to resume the uptrend in Ether (ETH) on Oct. 26 and 27 but could not sustain the price above $4,200. This suggests that bears are active at higher levels.
The sellers have pulled the price to the 20-day EMA ($3,869), which is an important support to keep an eye on. A strong bounce off the 20-day EMA will suggest that the sentiment remains positive and traders are buying the dips. The bulls will then again try to resume the uptrend.
On the contrary, if the 20-day EMA cracks, it will signal that traders may be booking profits and supply exceeds demand. The bears will then try to pull the price to the 50-day SMA ($3,488).
BNB/USDT
Binance Coin (BNB) turned down from the overhead resistance and broke below the 20-day EMA ($462) today. This is the first sign that the bullish sentiment could be weakening.
The long tail on today’s candlestick shows that bulls are attempting to defend the neckline of the inverse head and shoulders pattern.
If they succeed, the BNB/USDT pair could again try to rally to the overhead resistance at $518.90. A break and close above this resistance could signal the resumption of the uptrend.
Conversely, a close below the neckline could pull the price to the 50-day SMA ($423). If this support is breached, the next stop could be $392.20. The flattish moving averages and the RSI near the midpoint do not indicate a clear advantage to either bulls or bears.
ADA/USDT
Cardano’s (ADA) tight range trading between the 20-day EMA ($2.15) and the support line of the symmetrical triangle resolved to the downside on Oct. 27. This suggests that bears have asserted their supremacy.
The sellers pulled the price below $1.87 on Oct. 27 but the long tail on the candlestick suggests that bulls are attempting to defend the support. The recovery attempt is likely to face strong resistance at the 20-day EMA.
If the price turns down from the 20-day EMA, the bears will again try to break the $1.87 support. If that happens, the ADA/USDT pair could resume the down move toward the pattern target at $1.58.
The bulls will have to push and sustain the price above the resistance line of the triangle to invalidate the negative view.
SOL/USDT
Solana (SOL) broke above the overhead resistance at $216 on Oct. 25 but the bulls could not sustain the breakout. This may have attracted profit-booking by short-term traders, pulling the price to the 20-day EMA ($177).
The long tail on Oct. 27’s candlestick suggests that sentiment remains positive and bulls are buying on dips to the 20-day EMA. The buyers will now again try to push the price above the overhead resistance.
If they succeed, the SOL/USDT pair could resume the uptrend with the next target objective at $239.83. Contrary to this assumption, if bears pull the price below…
cointelegraph.com