Bitcoin and U.S. equities markets are attempting to recover, but selling at overhead resistance could contin
Bitcoin and U.S. equities markets are attempting to recover, but selling at overhead resistance could continue to weigh on the bullish momentum.
Bitcoin (BTC) and the United States equities markets are trying to start the week on a positive note but some analysts are skeptical about the short-term prospects of the markets. According to Bloomberg Intelligence senior macro strategist Mike McGlone, Bitcoin will face significant resistance at $25,000. McGlone believes that it “may be a while before buy-and-hold types gain the upper hand.”
It also looks like Bitcoin whales, unique entities owning 1,000 Bitcoin or more, are also not convinced of the recovery in the crypto markets. According to Glassnode, Bitcoin whale numbers have fallen to 1,663, which is well below the peak of 2,161 hit in February 2021.
It is difficult to catch the bottom in any market. Hence, traders should try to build a portfolio when they believe that the downtrend has ended and a basing pattern has begun.
Instead of buying the entire quantity at one go, they could gradually build a portfolio and aim to finish the purchases before the asset picks up momentum and shoots higher.
Could the strength in the equities markets pull Bitcoin and altcoins higher? Let’s study the charts to find out.
SPX
The S&P 500 index (SPX) plunged below the 20-day exponential moving average (4,046) on Feb. 17, which intensified selling and pulled the price to the uptrend line. Although the bears pulled the price below the uptrend line on Feb. 24, the lower levels attracted buying as seen from the long tail on the day’s candlestick. That helped the index close near the uptrend line.
The bulls may face an uphill task as the bears are likely to sell on any relief rallies near the 20-day EMA, as seen from the long wick on the Feb. 27 candlestick. If the price turns down from the 20-day EMA, it will suggest that the sentiment is negative and traders are selling on minor rallies. A close below the uptrend line may open the doors for a possible drop to 3,764.
If bulls want to salvage the situation, they will have to push the price back above the 20-day EMA. If they do that, it will indicate that the break below the uptrend line may have been a bear trap. The index could then attempt a rally to the overhead resistance of 4,200.
DXY
The bulls successfully defended the retest of the breakout level from the wedge pattern on Feb. 20, which started a stronger relief rally in the U.S. dollar index (DXY).
The index has reached the 38.2% Fibonacci retracement level of 105.52. This level may see an attempt by the bears to stall the recovery. If sellers want to maintain their hold, they will have to sink the price below the moving averages.
On the other hand, if bulls want to strengthen their position, they will have to push the price above 105.52. If they manage to do that, the index could extend its recovery to the 50% retracement level of 106.98 and then to the 61.8% retracement level of 108.43.
BTC/USDT
Bitcoin rebounded off the $22,800 support on Feb. 25 and rose above the 20-day EMA ($23,417) on Feb. 26. This suggests that lower levels are attracting buyers.
However, the bears may not give up easily. They will try to pull the price back below the 20-day EMA and challenge the 50-day simple moving average ($22,433). If this level gives way, the BTC/USDT pair may plummet to the next major support at $21,480.
Alternatively, if the price once again bounces off $22,800, it will signal that buyers are fiercely defending this level. That may indicate a range-bound action between $22,800 and $25,250 for a few days.
ETH/USDT
Ether (ETH) rebounded off the 50-day SMA ($1,587) on Feb. 25, indicating that the bulls are fiercely defending this level. The 20-day EMA ($1,626) has flattened out and the RSI is just above the midpoint, indicating a balance between supply and demand.
This balance will tilt in favor of the bulls if they thrust and close the price above $1,680. The ETH/USDT pair will then attempt to rise above the $1,800 resistance and start its journey toward the psychological level of $2,000.
Alternatively, if the price once again turns down from the overhead resistance, it will indicate that bears are not willing to give up. That may increase the possibility of a break below the 50-day SMA. The pair could then drop to $1,460 and later to $1,352.
BNB/USDT
BNB (BNB) broke and closed below the 50-day SMA ($307) on Feb. 24 but the bulls purchased the dip and pushed the price to the 20-day EMA ($309) on Feb. 26. This level is attracting selling by the bears.
If the price turns down and breaks below $295, it will indicate that sellers have flipped the 20-day EMA into resistance. The…
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