Bitcoin (BTC) and most major altcoins are struggling to find a bottom, indicating that traders are dumping their positions out of fear. The big question on everyone’s mind is whether the selling is over or could the decline continue?
UTXO Management senior analyst Dylan LeClair highlighted that the network cost basis, the average price at which Bitcoin was last moved by various investors, is $24,000 and historically, the ratio of cost basis to price has bottomed out below 1.0.
If history were to repeat itself, Bitcoin may have to fall some more to make it an attractive buy according to the metric.
Long-term investors don’t seem to be perturbed by the recent correction in Bitcoin. Glassnode data suggests that investors continue to withdraw their coins to cold storage.
“Bitcoin illiquid supply is going up relentlessly,” said Lex Moskovski, chief investment officer of Moskovski Capital.
Bitcoin and most major altcoins are nearing strong support levels. Could investors use their opportunity to buy or will the bears prevail? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin has been trading below the $39,600 to $37,332.70 zone for the past two days. The buyers attempted a relief rally on Jan. 23 but could not even challenge the overhead resistance at $37,332.70. This indicates weak demand at higher levels.
The selling renewed today and the bears pulled the BTC/USDT pair below the Jan. 22 intraday low at $34,008. The next support on the downside is the critical zone between $30,000 and $28,805.
The oversold level on the relative strength index (RSI) suggests that the selling may be overdone in the short term. This could attract buying from traders near the support zone. If the price rebounds off this zone, the bulls will try to push the pair above $39,600.
A break and close above the 20-day exponential moving average ($40,835) will be the first indication that the bears may be losing their grip. A trend change may be signaled after the price rises and sustains above the 50-day simple moving average ($45,404).
ETH/USDT
Ether (ETH) plummeted and closed below the descending channel on Jan. 21, indicating an increase in selling pressure. The bulls tried to push the price back into the channel on Jan. 23 but failed.
This renewed the selling pressure today and bears have pulled the price below the Jan. 22 intraday low at $2,300. The ETH/USDT pair could now decline to the psychological level at $2,000 where the buyers may provide support.
If the price rebounds off this level, the bulls will again try to push the price back into the channel. If they succeed, the pair could rise to the breakdown level at $2,652. Conversely, if the price breaks below $2,000, the pair could slide to the next major support at $1,700.
BNB/USDT
Binance Coin (BNB) plummeted below the support line of the descending channel on Jan. 21 and follow-up selling on Jan. 22 pulled the price toward the strong support zone at $330 to $320.
The buyers attempted a relief rally on Jan. 23 but the bears did not allow the price to re-enter into the channel. This indicates that bears are defending the support line of the channel. The selling resumed today and the bears will try to sink the price below the support zone.
If the price sustains below $320, the BNB/USDT pair could slide to $254.50 and then to the next support at $225.40. The first sign of strength will be a break and close inside the channel. The pair could then attempt a rally to the 20-day EMA ($443).
ADA/USDT
Cardano (ADA) broke below the strong support at $1 on Jan. 22 but the long tail on the candlestick shows that bulls purchased the dip and defended the level successfully.
However, a minor negative is that the bounce off $1 could not even reach the 20-day EMA ($1.24). This suggests that bears are pouncing on minor relief rallies and not waiting for higher levels to sell.
The bears again pulled the price below $1 today. If they sustain the ADA/USDT pair below this level, the selling momentum could pick up. The pair could then decline to $0.80 and later to the support line of the channel.
SOL/USDT
Solana (SOL) nosedived below the $116 support on Jan. 21 and the price reached the support line of the descending channel on Jan. 22. Although bulls defended this level, they could not push the price to the breakdown level at $116. This indicates that buying dries up at higher levels.
The bears resumed their selling today and are attempting to sink the SOL/USDT pair below the support line of the channel. If they succeed, the selling could pick up momentum and the pair may drop to $66 and later to $58.
The incessant selling of the past few days has pushed the RSI below 22. This indicates that selling may have been…
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