BTC and many altcoins are fast approaching the “capitulation phase”, which is typically followed by the mark
BTC and many altcoins are fast approaching the “capitulation phase”, which is typically followed by the market finding a bottom.
Global equity markets extended their decline on May 9 and the S&P 500 fell to a new 52-week low. Bitcoin (BTC) dropped to a new year-to-date low and most major altcoins extended their decline as they tracked the weakness in the stock markets.
Data from blockchain analytics firm Glassnode shows that Bitcoin inflows to centralized exchanges have risen to more than 1.7 million coins, the highest since February. This suggests that whales may be dumping their holdings as they anticipate an extended downtrend.
Several analysts expect the crypto markets to enter a capitulation phase which generally marks a bottom. Analyst Dylan LeClair highlighted that previous market bottoms during bear markets happened when Bitcoin dropped to its realized price (average on-chain cost basis). The metric is currently at $24,300.
Could Bitcoin and altcoins enter a capitulation phase or is it time for the crypto markets to surprise many by staging a strong recovery? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin plummeted below the ascending channel on May 5 and has continued lower, indicating that bears are in no mood to let go of their advantage. The price has dipped below the critical support at $32,917 but the bears may face a strong challenge from the bulls at lower levels.
If the price rebounds off the current level, the relief rally could reach the 20-day exponential moving average ($37,670). This is an important level to watch out for because if the price turns down from the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on rallies.
The bears will then make another attempt to pull the BTC/USDT pair to the critical support at $28,805. This level is again likely to attract buying by the bulls.
On the upside, a break and close above the 20-day EMA will be the first indication that the selling pressure may be reducing. That could clear the path for a possible rally to the 50-day simple moving average ($41,279).
ETH/USDT
Ether (ETH) broke below the uptrend line on May 7. This move invalidated the developing ascending triangle pattern. The breakdown of a bullish pattern is usually a bearish sign as stops of several bulls who may have purchased in anticipation of a breakout from the pattern being triggered.
Strong selling has pulled the price below the immediate support at $2,445. This opens the door for a possible drop to the critical support zone between $2,300 and $2,159. The bulls are likely to defend this zone with all their might because a break below it could sink the ETH/USDT pair to $1,700.
If the price rebounds off the support zone, the bulls will make an attempt to push the pair above the 20-day EMA ($2,790). If they succeed, it will suggest that the bears may be losing their grip. The pair could then rally to the 50-day SMA ($3,043).
BNB/USDT
Binance Coin (BNB) has witnessed sustained selling for the past few days. The bears pulled the price below the strong support at $350 and are now challenging the critical level at $320.
A break and close below $320 would be a huge negative as this level has not been breached since August 2021. There is a minor support at $300 but if this level fails to arrest the decline, the BNB/USDT pair could plummet to $250.
Alternatively, if the price rebounds off $320, the bulls will try to push the pair above $350 and challenge the 20-day EMA ($383). The buyers will have to clear this hurdle to signal that the decline could be over. The pair could then rise to the 50-day SMA ($409).
XRP/USDT
Ripple (XRP) turned down from the 20-day EMA ($0.63) on May 5 and dipped below $0.62. The buyers attempted to push the price back above $0.62 on May 6 but the bears held their ground.
The XRP/USDT pair continued its decline and has broken below the support at $0.55. This clears the path for a retest of the psychological support at $0.50. The buyers are expected to defend this level with vigor because a break and close below it could start a downtrend that could sink the pair to $0.42.
Conversely, if the price rebounds off the $0.50 support, the bulls will again attempt to drive and sustain the pair above the 20-day EMA. If they succeed, it will suggest that the selling pressure could be reducing.
SOL/USDT
The failure of the bulls to push Solana (SOL) above the 20-day EMA on May 5 may have attracted strong selling by the bears. The price continued its downward move and has slipped below the strong support at $75.
If the price sustains below $75, it will suggest the start of the next leg of the…
cointelegraph.com