The United States Federal Reserve Chairman Jerome Powell said on Feb. 7 that the “disinflationary process, the process of getting inflation down,” has started but it is still in its very early stages.
He cautioned that strong data would be met with more rate hikes. Though the comments are mixed, they triggered buying in the S&P 500 and Bitcoin (BTC) on Feb. 7 as investors speculated that the Fed may soon end its rate hikes.
Bitcoin’s strong rally in January and signs of ebbing inflation seem to have turned around investor sentiment. CoinShares data on Jan. 30 shows that institutional investors pumped $117 million into digital investment products. That sent the total assets under management to $28 billion, a sharp 43% increase from its November 2022 low.
Although the sentiment seems to have turned around, bear markets rarely end without a retracement of the rise from the low. The price needs to form a higher low followed by a higher high to confirm a potential trend change.
What are the critical support levels on Bitcoin and altcoins that could arrest future declines? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin slid below $22,800 on Feb. 6 but the bulls purchased this dip. That started a rebound above $23,000 on Feb. 7 but the buyers could not sustain the higher levels.
The bulls are unlikely to have it easy because the bears will try to pose a strong challenge on every rise toward $24,000. Although the upsloping moving averages suggest advantage to buyers, the negative divergence on the relative strength index (RSI) signals that the bullish momentum is slowing down.
Sellers are trying to trap the aggressive bulls by pulling the price below the 20-day exponential moving average ($22,568). If they manage to do that, the BTC/USDT pair may give back a part of its recent gains and dive to $21.480. Buyers are likely to defend the zone between $21,480 and the psychologically critical level of $20,000.
ETH/USDT
Ether (ETH) rebounded off the 20-day EMA ($1,600) on Feb. 7. The bulls tried to solidify their position by driving the price above the $1,680 resistance on Feb. 8 but they could not sustain the breakout.
This shows that the bears are active near the $1,680 resistance. The sellers will try to sink the pair below the 20-day EMA. If they succeed, the ETH/USDT pair could drop to $1,500. The sellers will have to crack this support to seize control.
Conversely, if the price turns up and rises above $1,700, the pair may signal the start of the next leg of the uptrend. There is a minor resistance at $1,800, but the potential of a rally to $2,000 increases if the bulls do not allow the price to dip back below $1,680.
BNB/USDT
The bulls successfully defended the breakout level of $318 on Feb. 6, which is a positive sign as it shows that buyers are not waiting for a deeper correction to buy. The bulls will now try to push BNB (BNB) above $338.
If they can pull it off, the potential for a rally to $360 improves. The bears are expected to mount a strong defense at this level but if this barrier is surmounted, the BNB/USDT pair could extend the up-move to $400.
Conversely, if the price turns down and plummets below $318, it will signal that bears sold on rallies. That may trap the aggressive bulls and increase the risk of a fall to the 50-day simple moving average ($284).
XRP/USDT
The bulls pushed XRP (XRP) back above the 20-day EMA ($0.40) on Feb. 7 but are struggling to sustain the higher levels. This suggests that the bears are not ready to let bulls have their way.
The bears will try to pull the XRP/USDT pair to the strong support near $0.36. This is an important level to keep an eye on because a slide below it will suggest that the pair may extend its consolidation between $0.30 and $0.42 for a few more days. Trading inside a range is usually random and volatile.
If bulls want to seize control, they will have to thrust the price above the $0.42 to $0.44 resistance zone. After this zone is cleared, there is no major resistance until $0.51, hence the pair may travel this distance in a short time.
ADA/USDT
Cardano (ADA) jumped up from the immediate support at $0.38 on Feb. 7, indicating that lower levels are attracting buyers.
Although the risk from the negative divergence on the RSI remains, the upsloping moving averages suggest that bulls have the upper hand. There is a minor resistance at $0.41 but if this level is crossed, the ADA/USDT pair may touch $0.44. The bears will again try to stall the up-move at this level.
Contrary to this assumption, if the price turns down and plunges below the 20-day EMA, it will suggest that the bulls are tiring out. The bears will then try to sink the price to the 50-day SMA…
cointelegraph.com