BTC continues to lose ground, but if the $40,000 level is reclaimed, LEO, MANA, KLAY and XTZ could be the fi
BTC continues to lose ground, but if the $40,000 level is reclaimed, LEO, MANA, KLAY and XTZ could be the first to recover.
Russia’s massive build-up of soldiers, warplanes, equipment and extended military drills near Ukraine’s borders increased fears of a possible invasion within the next few days. That could have renewed selling in Bitcoin (BTC), which plummeted below the strong support at $39,600.
Among the gloom and doom, there is a ray of hope for crypto investors because data from Glassnode shows that more than 60% of Bitcoin supply has not been used in any transaction for more than a year. This suggests that long-term hodlers are not dumping their positions in the downtrend.
Mike McGlone, chief commodity strategist at Bloomberg Intelligence, warned that Bitcoin could be in for a “rough week ahead” and cautioned that “inflation is unlikely to drop unless risk assets do.” However, McGlone expects Bitcoin to emerge stronger this year.
Could Bitcoin and altcoins stage a recovery and trap the aggressive bears? Let’s study the charts of the top-5 cryptocurrencies that may participate in a relief rally.
BTC/USDT
The failure of the buyers to defend the strong support at $39,600 indicates that Bitcoin continues to face strong selling by the bears. The 20-day exponential moving average ($41,193) has started to turn down and the relative strength index (RSI) has slipped into the negative territory, suggesting that bears have the upper hand.
If the price sustains below $39,600, the selling could pick up momentum and the BTC/USDT pair could drop to the immediate support zone between $36,250 and $35,507.01.
The bulls are expected to defend this zone aggressively because a break below it could clear the path for a retest of the Jan. 24 intraday low at $32,917.17. The longer the price sustains below $39,600, the greater the possibility of the downward move.
Contrary to this assumption, if the price rebounds off the current level and quickly rises above $39,600, it will suggest strong accumulation at lower levels. The bulls will then try to push the price above the 20-day EMA.
The bulls will have to clear the overhead hurdle at $45,821 to indicate the start of a new up-move.
The failure of the bulls to achieve a strong rebound off the $39,600 support indicates a lack of demand at higher levels. This may have emboldened the bears who pulled the price below $39,600.
The RSI has dipped deep into the oversold territory, indicating that the selling may have been overdone in the short term. This suggests a minor relief rally or consolidation in the near term.
If bears successfully defend the retest of the breakdown level during the next bounce, the selling may intensify and the pair could plummet to $36,000. This negative view will invalidate in the short term if bulls drive the pair above $41,000.
LEO/USD
UNUS SED LEO (LEO) has been correcting since making a new all-time high at $8.14 on Feb. 8. The bears pulled the price below the 50% Fibonacci retracement level at $5.74 but the bulls are aggressively defending the 20-day EMA ($5.45).
The rising 20-day EMA and the RSI in the positive territory indicate that bulls have a slight edge. If buyers drive the price above $6.24, the LEO/USD pair could attempt to resume the up-move. The pair could then rise to $7.
Conversely, if bulls fail to sustain the current rebound, the bears will sense an opportunity and try to pull the pair below the 20-day EMA. If they manage to do that, the sentiment could turn bearish and the pair may slide to the 61.8% retracement level at $5.18.
The 4-hour chart shows that the pair is range-bound between $5.52 and $6.24. The 20-EMA and 50-simple moving average have flattened out and the RSI is near the midpoint, indicating a balance between supply and demand.
This balance will shift in favor of the bears if they pull and sustain the price below $5.52. The pair could then drop toward the 200-SMA.
Conversely, if buyers push and sustain the price above the 50-SMA, the pair could rally to $6.24. The bulls will have to clear this hurdle to signal that they are back in the driver’s seat.
MANA/USDT
Decentraland (MANA) turned down from the downtrend line on Feb. 16, indicating that the sentiment remains bearish and traders are selling on rallies to stiff resistance levels.
The bears have pulled the price below the 50-day SMA ($2.83), which opens the door for a possible downside to the strong support zone between $2.44 and the 200-day SMA ($2.20).
If the price rebounds off this zone, the bulls will again attempt to push the MANA/USDT pair to the downtrend line. The bulls will have to clear this hurdle to indicate the start of a new up-move.
Conversely, if…
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