Bitcoin’s quick dip below $44,000 sent altcoin prices into a freefall and has some traders worried that t
Bitcoin’s quick dip below $44,000 sent altcoin prices into a freefall and has some traders worried that the correction could deepen.
Bitcoin’s (BTC) failure to make a strong recovery in the past few days has resulted in profit-booking in most major altcoins, threatening to pull the total crypto market capitalization back below $2 trillion.
The U.S. equity markets witnessed profit-booking and the S&P 500 dropped by 1.69% last week, suggesting the development of a risk-off sentiment. Charles Edwards, CEO of investment manager Capriole, pointed out that “almost every Bitcoin correction in 2021” has corresponded with a 2% or more drop in the S&P 500.
Irrespective of the near-term weakness in Bitcoin, MicroStrategy has continued to build its holdings. The company’s CEO Michael Saylor recently revealed a purchase of 5,050 Bitcoin bought at an average price of $48,099 per coin. This has increased the company’s stockpile to 114,042 Bitcoin, bought at an average cost of about $27,713 per coin.
Is Bitcoin in a firm bear grip and could this result in a sell-off in major altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin once again turned down from the 20-day exponential moving average ($47,061) today, indicating that the short-term sentiment has turned negative and traders are selling on rallies.
The downsloping 20-day EMA and the relative strength index (RSI) below 43 suggest that the path of least resistance is to the downside.
The onus is now on the bulls to defend the critical level at $42,451.67 because if this support cracks, the BTC/USDT pair could plummet to the $37,332.70 to $36,670 support zone.
Such a move could dim the chances of a strong recovery, keeping the pair stuck in a range for a few days.
Contrary to this assumption, if the price rebounds off $42,451.67, the bulls will make one more attempt to resume the uptrend. A breakout and close above $47,400 could open the doors for a retest of the overhead resistance zone of $50,500 to $52,920.
ETH/USDT
Ether (ETH) has been sandwiched between the moving averages for the past few days. This suggests that bulls are buying on dips to the 50-day simple moving average ($3,129) and bears are selling on rallies to the 20-day EMA ($3,413).
The 20-day EMA is gradually sloping down and the RSI has dropped below 46, indicating that bears have the upper hand. If bears pull the price below the 50-day SMA, the ETH/USDT pair could witness further selling, resulting in a decline to $3,000.
This is an important support for the bulls to defend because a break below it could result in panic selling.
On the contrary, if the price rebounds off the 50-day SMA, the bulls will again try to push the price above the 20-day EMA. A breakout and close above $3,567.06 could tilt the advantage in favor of the bulls. The buyers will then try to push the price to $4,000.
ADA/USDT
Cardano (ADA) bounced off the 50-day SMA ($2.16) on Sep. 7 and rose above the 20-day EMA ($2.57) on Sep. 11. However, higher levels attracted profit-booking as seen from the long wick on the Sep. 11 and 12 candlesticks.
The bears have pulled the price back below the breakout level at $2.47 today. The downsloping 20-day EMA and the RSI in the negative territory indicate that bears have a slight advantage.
If sellers pull the price below the 50-day SMA, the correction could deepen to the next support at $1.94. Alternatively, if the price rises from the current level or rebounds off the 50-day SMA, the bulls will make one more attempt to push the price toward the overhead resistance zone at $2.97 to $3.10.
BNB/USDT
Binance Coin (BNB) closed below the 50-day SMA ($410) on Sep. 10 but bears could not sustain the lower levels. The bulls purchased the dip and pushed the price back above the 50-day SMA on Sep. 12.
However, the failure of the bulls to clear the overhead hurdle at $433 may have attracted a fresh round of selling today. If the price sustains below $393.20, the BNB/USDT pair could drop to $369 and then to $340.
The downsloping 20-day EMA ($438) and the RSI below 40 suggest that the path of least resistance is to the downside. The bulls will have to push and sustain the price above $433 to suggest that the correction could be over.
XRP/USDT
XRP is currently stuck between the moving averages. The failure of the bulls to push the price above the 20-day EMA ($1.13) has attracted profit-booking from short-term traders.
The 20-day EMA has turned down and the RSI has dipped below 45, suggesting that bears have the upper hand. If sellers pull the price below the 50-day SMA ($1.03), the XRP/USDT pair could challenge the Sep. 7 intraday low at $0.95.
A break…
cointelegraph.com