Bitcoin and altcoins continue to bounce off underlying support areas, raising the chance that a sharp down-s
Bitcoin and altcoins continue to bounce off underlying support areas, raising the chance that a sharp down-side move could occur.
Bitcoin (BTC) turned down sharply on April 21, maintaining its tight correlation with the U.S. equity markets, which reversed direction after U.S. Federal Reserve Chair Jerome Powell hinted that a 50 basis point rate hike was “on the table” in May. The selling has continued today as investors trim risky assets in expectation of an aggressive stance from central banks to curb surging inflation.
Veteran trader Peter Brandt said in a tweet recently that the Nasdaq 100 (NDX) was showing a similar formation it made before plunging in the year 2000.
If history repeats itself then the NDX could witness a sharp correction. That may be negative for the crypto markets in the short term because of the close correlation between Bitcoin and the NDX.
The subdued price action in cryptocurrencies and the weak-macro environment have resulted in reduced Google searches for the term Bitcoin and Ethereum. Even crypto trading volumes have been in a declining trend for some time. According to Blockchain.com, the total exchange volumes on major crypto exchanges plunged to $165.8 billion on April 19, the lowest level since October 2020.
Could Bitcoin and altcoins continue their downward move or is it time for a relief rally? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin broke above the 50-day simple moving average ($41,977) on April 21 but the bulls could not sustain the higher levels as seen from the long wick on the day’s candlestick. The price reversed direction from $42,976 and settled below the 20-day exponential moving average ($41,478).
The selling has continued today and the bears are attempting to pull the price down to the support line of the ascending channel pattern. The downsloping 20-day EMA and the relative strength index (RSI) in the negative zone suggest that bears have the upper hand.
If the price breaks below the support line of the channel, the selling could intensify and the BTC/USDT pair could drop to $33,000.
Conversely, if the price turns up from the current level or the support line, it will suggest that bulls are actively buying at lower levels.
The bulls will have to push and sustain the price above $43,000 to signal strength. The pair could then rise to the 200-day SMA ($47,965) and later challenge the resistance line of the channel.
ETH/USDT
Ether (ETH) has been stuck between the 20-day EMA ($3,087) and the 50-day SMA ($3,003) for the past few days. Several efforts to break out of this tight range have been unsuccessful which suggests that bulls are buying on dips while bears are selling on rallies.
The downsloping 20-day EMA and the RSI in the negative territory give a slight edge to the sellers. If the price slips below $2,883, the possibility of a drop to the uptrend line of the developing ascending triangle pattern increases.
The bulls are likely to mount a strong defense at this level. If the price rebounds off the uptrend line, the buyers will make another effort to propel the ETH/USDT pair above the 20-day EMA.
If they succeed, the pair could rally to the 200-day SMA ($3,486). A break and close above this level will complete the ascending triangle pattern, resulting in a potential trend change.
BNB/USDT
The long wick on the April 20 candlestick shows that bears are selling on rallies near the overhead resistance at $445. Binance Coin (BNB) continued to move down and broke below the 50-day SMA ($408) on April 21.
If bears sink the price below $391, the selling could accelerate and the BNB/USDT pair may drop to the strong support at $350. If the price rebounds off this level with strength, it will suggest that the pair could remain range-bound between $350 and the 200-day SMA ($471) for some more time.
Alternatively, if the price rebounds off the strong support zone between the 50-day SMA ($408) and $391, the bulls will endeavor to drive the pair to $445 and then to the 200-day SMA. A break and close above this level could signal a potential trend change.
XRP/USDT
Ripple (XRP) has been stuck in a range between $0.69 and $0.91 for the past few days. Although the price rebounded off the support of the range on April 12, the bulls could not clear the overhead hurdle at the 50-day SMA ($0.78), indicating a lack of demand at higher levels.
The bears will now strive to pull the XRP/USDT pair below the $0.69 support. If they manage to do that, the pair could drop to $0.62 and later to $0.54. The 20-day EMA ($0.76) has started to turn down and the RSI is in the negative zone, suggesting that the path of least resistance is to the downside.
Alternatively, if the price…
cointelegraph.com