BTC and ETH reversed course as both assets search for underlying support, suggesting that bears are attem
BTC and ETH reversed course as both assets search for underlying support, suggesting that bears are attempting to trap over-leveraged bulls.
Bitcoin (BTC) and Ether (ETH) have both witnessed aggressive profit-booking after hitting their respective new all-time high. This suggests that traders who had bought on rumors of a Bitcoin exchange-traded fund booked profits following the successful launch of the ProShares’ Bitcoin Strategy ETF (BITO).
The bulls tried to stage a recovery in Bitcoin after the launch of the second BTC futures-linked ETF by digital asset manager Valkyrie on Oct. 22 but met with strong selling pressure at higher levels. The selling has pulled the greed level on the Crypto Fear and Greed Index from 84 on Oct. 21 to 75 on Oct. 22.
JPMorgan Chase strategists said in a note that BITO was “unlikely to trigger a new phase of significantly more fresh capital entering Bitcoin” and the hype in the product may wane after a week. The strategists pointed out that capital was shifting away from gold ETFs into Bitcoin funds since September and that “supports a bullish outlook for Bitcoin into year-end.”
Could Bitcoin and Ether witness a deep correction and what are the critical support levels to watch out for? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin made a new all-time high at $67,000 on Oct. 20 but the bulls could not sustain the breakout as bears pulled the price back below the breakout level at $64,854 on Oct. 21. This suggests that sellers are attempting to trap the aggressive bulls.
The bears tried to start a recovery today but the long wick on the day’s candlestick shows that traders are selling on minor rallies. The strong support to watch on the downside is the 20-day exponential moving average ($57,778).
If the price rebounds off this support, it will suggest that sentiment remains positive and traders are buying on dips. That will increase the possibility of a break above the overhead resistance zone between $64,854 and $67,000. The pair could then rally to $75,000.
On the other hand, if the price breaks below the 20-day EMA, the selling may accelerate and the BTC/USDT pair could drop to the 50-day simple moving average ($50,496).
ETH/USDT
Ether broke and closed above the overhead resistance at $4,027.88 on Oct. 20. That was followed by another sharp up-move on Oct. 21 which pushed the price to $4,375, just above the previous all-time high at $4,372.72.
However, the long wick and the negative close on Oct. 21 show that traders may have sold aggressively near the all-time high. The bears are attempting to sustain the price below the breakout level at $4,027.88.
The upsloping 20-day EMA ($3,712) and the relative strength index (RSI) in the positive zone suggest that bulls remain in command. If the price bounces off the current level, the bulls will make one more attempt to thrust the ETH/USDT pair to a new all-time high.
A break and close below the neckline of the inverse head and shoulders (H&S) pattern could signal the possible start of a deeper correction to $3,200.
BNB/USDT
Binance Coin (BNB) turned down from $505.90, which shows that bears are defending the overhead resistance at $518.90. The altcoin could not drop to the 20-day EMA ($455), which is expected to act as a strong support.
If the price bounces off the 20-day EMA, the BNB/USDT pair could make one more attempt to clear the overhead hurdle at $518.90. If they manage to do that, the pair could rally toward the pattern target at $554.
The rising 20-day EMA and the RSI in the positive zone indicate that bulls have the upper hand. This advantage could shift in favor of the bears if the price turns down and slips below the moving averages. The selling could intensify further on a break below $392.20.
ADA/USDT
Cardano (ADA) broke above the 20-day EMA ($2.18) on Oct. 21 but the bulls could not push the price above the resistance line of the symmetrical triangle pattern. This indicates that bears are vigorously defending this level.
The sellers are currently trying to sink the price below the support line of the triangle. If they succeed, it will suggest that the equilibrium between the bulls and the bears has resolved to the downside.
The ADA/USDT pair could then slide to the strong support at $1.87. A break and close below this level could result in panic selling. The break and close above the triangle will be the first indication that bulls are back in the game. The pair may then rally to $2.47 and pick up momentum above this resistance.
XRP/USDT
XRP returned from the downtrend line on Oct. 21, indicating that bears are defending this level aggressively. On the downside, the bulls are attempting to sustain the price…
cointelegraph.com