BTC is struggling to hold on to the $40,000 level, but a few analysts say cryptocurrencies might decouple fr
BTC is struggling to hold on to the $40,000 level, but a few analysts say cryptocurrencies might decouple from equities in the coming months.
Bitcoin (BTC) sold off along with the U.S. equity markets on Feb. 17 on reports that Russia expelled Bart Gorman, the second highest-ranking American official from the U.S. Embassy in Moscow and U.S. President Joe Biden cautioned that the threat of a Ukrainian invasion by Russia remains “very high.”
Although the near-term correlation between Bitcoin and the U.S. equity markets remains high, Pantera Capital CEO Dan Morehead said in a recent newsletter that the “markets will decouple soon.” Morehead mentioned that the U.S. Federal Reserve’s rate hikes will be negative for bonds, stocks and real estate and cryptocurrencies may be the “best place” to park capital.
While traders are fixated on the near-term price action, Jurrien Timmer, the director of Global Macro at Fidelity Investments, dismissed it as noise. Timmer highlighted the similarities in the growth of Bitcoin and Apple networks and concluded that Bitcoin could rally above $100,000 in the long term.
Bitcoin and several major altcoins are at a critical juncture. Could bulls hold the key support levels? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin plunged below the moving averages on Feb. 17, indicating that bears are in no mood to relent and are selling on rallies. The price is near $39,600, which is an important level for the bulls to defend.
The relative strength index (RSI) has slipped into the negative territory and the 20-day exponential moving average ($41,635) has started to turn down. This suggests that bears are attempting to gain the upper hand.
A break and close below $39,600 could increase the selling pressure and the BTC/USDT pair may drop to $36,250.
If the price rebounds off the current level, the bulls will again try to push the pair above the moving averages. If they succeed, the pair could gradually rally toward $45,821 but buyers will have to clear this hurdle to signal a possible change in trend.
ETH/USDT
Ether (ETH) turned down from close to the neckline of the developing inverse head and shoulders pattern on Feb. 16. This suggests that bears are trying their best to invalidate the possible reversal setup.
The ETH/USDT pair could now drop to the strong support at $2,652. This is an important level for the bulls to defend because a break below it could open the doors for a further downside to $3,476.
Contrary to this assumption, if the price rebounds off the current level, the bulls will again attempt to push and sustain the price above the neckline. If that happens, it will suggest the start of a new up-move. However, the prospects of such a move look bleak at the moment.
BNB/USDT
Binance Coin (BNB) turned down from the 50-day simple moving average ($430) on Feb. 16 and broke below the 20-day EMA ($408) on Feb. 17.
The BNB/USDT pair has been consolidating between $390.50 and $445.40 for the past few days. The flattish 20-day EMA and the RSI just below the midpoint suggest a balance between supply and demand.
This balance will tilt in favor of the bears if the price breaks and sustains below $390.50. That could open the doors for a possible drop to $357.40. Conversely, a break and close above $445.40 could open the doors for a possible rally to $500. Until then, the range-bound action is likely to continue.
XRP/USDT
The failure of the bulls to sustain Ripple (XRP) above $0.85 may have led to profit-booking by short-term traders. That pulled the price down to the strong support at $0.75.
The buyers are likely to defend the zone between the moving averages. If the price bounces off this support zone, the XRP/USDT pair could rise to $0.85. A break and close above this level could challenge the resistance at $0.91. The gradually rising 20-day EMA and the RSI near the midpoint suggest a minor advantage to buyers.
This positive view will invalidate if the bears pull the price below the 50-day SMA ($0.73). Such a move could trigger several stop-losses, resulting in a possible decline to $0.65 and then $0.60.
ADA/USDT
Cardano (ADA) has been sandwiched between the 20-day EMA ($1.09) and the psychological support at $1 for the past few days. This tight-range trading is likely to result in a strong directional move within the next few days.
The downsloping moving averages and the RSI in the negative zone indicate that the path of least resistance is to the downside. If the bears sink and sustain the price below $1, the ADA/USDT pair could resume its downtrend. The pair could then decline to $0.80 and later to $0.68.
Contrary to this assumption,…
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