The S&P 500 is trading near its all-time high but Bitcoin (BTC) has plunged about 30% from its all-time high at $69,000. Even after the sharp d
The S&P 500 is trading near its all-time high but Bitcoin (BTC) has plunged about 30% from its all-time high at $69,000. Even after the sharp drop, Bitcoin is up 63%, year-to-date, outperforming the S&P 500, which is up about 30% in 2021.
Gold, which is popular as a hedge against inflation, is down roughly 7% this year. Arcane research said in its report that Bitcoin’s outperformance in the high inflationary environment shows that “Bitcoin has proven itself to be an excellent inflation hedge.”
Real Vision CEO Raoul Pal said in an interview with Vlad from The Stakeborg Talks that the recent selling in Bitcoin may have been due to institutional investors booking profits but he believes the selling may be coming to an end.
However, veteran trader Peter Brandt is of the opinion that panic selling has not yet happened, which is known to signal bottoms.
Could Bitcoin extend its decline or stage a strong recovery above $50,000 in the next few days? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin rose above the overhead resistance at $51,936.33 on Dec. 27 but the long wick on the candlestick shows that traders sold this rise with vigor. The selling continued on Dec. 28 and the price broke below the 20-day exponential moving average ($49,558).
The price broke below the 200-day simple moving average ($47,755) today but the long tail on the candlestick shows that bulls are attempting to arrest the decline. If the price rises and sustains above the 200-day SMA, the bulls will again try to push the BTC/USDT pair toward the overhead resistance at $51,936.33.
On the contrary, if the price sustains below the 200-day EMA, the selling could intensify. The 20-day EMA has started to turn down and the relative strength index (RSI) is below 42, indicating that bears are in control. If the $45,456 support cracks, the pair could plunge to the strong support zone at $42,000 to $40,000.
ETH/USDT
Ether’s (ETH) failure to sustain above the 20-day EMA ($4,011) could have attracted selling from short-term traders. The price turned down sharply on Dec. 28 and has dropped close to the strong support at $3,643.73.
If the price rebounds off the support, the bulls will make one more attempt to push the ETH/USDT pair above the 20-day EMA. A break and close above $4,200 could signal that the corrective phase may be over. The pair could first rally to $4,488 and then challenge the all-time high at $4,868.
However, the downsloping 20-day EMA and the RSI in the negative zone indicate that the path of least resistance is to the downside. If the $3,643.73 support cracks, the pair could decline to the 200-day SMA ($3,353). This level may act as a strong support but if it cracks, the pair could plummet to $2,800.
BNB/USDT
Binance Coin (BNB) soared above the 20-day EMA ($546) on Dec. 27 but the bulls could not sustain the higher levels. The price turned down and dipped below the 20-day EMA on Dec. 28.
The bears will now try to sink the price below the strong support at $500. If they succeed, it could start a down move to the 200-day SMA ($444) where bulls are likely to defend the level aggressively.
Contrary to this assumption, if the price turns up from the current level or the strong support at $500, it will suggest that bulls continue to buy on dips. A break and close above $575 will signal that the correction may be over. The pair could first rally to $617 and then to the overhead resistance zone at $669.30 to $691.80.
SOL/USDT
Solana’s (SOL) recovery stalled at $204.75 on Dec. 27 and the price broke below the 20-day EMA ($185) on Dec. 28. This suggests that bears continue to sell on rallies.
The bears will now attempt to build on their advantage and pull the price below $167.88. If this support cracks, the SOL/USDT pair could drop to $148.04. The 20-day EMA is flattish but the RSI has dipped below 44, indicating that bears are attempting to gain the upper hand.
This negative view will invalidate in the short term if the price turns up from the current level and rises above $204.75. That will clear the path for a possible rally to the resistance line of the falling wedge pattern. A breakout of the wedge will signal that bulls are back in the driver’s seat.
ADA/USDT
Cardano (ADA) turned down from $1.59 on Dec. 27 and the price has dipped to the 20-day EMA ($1.39). If the price rebounds off the current level, the bulls will attempt to push the price to the resistance line of the descending channel.
The flattish 20-day EMA and the RSI near the midpoint suggest a balance between supply and demand. A break and close above the channel will indicate that the downtrend could be over. The bulls will then try to push the price toward the strong overhead resistance at…
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