A week-long pattern of daily lower highs suggests bulls will be unable to flip $43,000 to support and this could weigh on the fledgling recovery seen across many altcoins.
Bitcoin (BTC) and Ether (ETH) are attempting to bounce off their critical support levels as bulls try to thwart attempts by the bears to deepen the correction.
Tesla CEO Elon Musk said at the Code Conference in California recently that governments cannot “destroy crypto,” due to its decentralized nature but can “slow down its advancement.”
Data shows that whales have been moving record amounts of Bitcoin in the past two weeks. The total transfer volume of transactions worth $10 million and higher have surpassed levels seen when Bitcoin’s price was near $60,000.
According to on-chain analytics resource Material Indicators, “smaller” whales sold and mega whales added to their holdings.
Bobby Lee, the former CEO of BTCC exchange, said in an interview with Bloomberg on Sept. 29 that Bitcoin’s rally is expected to begin in 2021, which will not only push the price to an all-time high but also clear the psychological mark at $100,000 and possibly reach $200,000.
Are Bitcoin and altcoins getting ready for a relief rally or will bears pull the price below the respective support levels? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin continues to trade between the 100-day simple moving average ($41,221) and the 20-day exponential moving average ($44,229). The price has rebounded off the 100-day SMA today, indicating that bulls continue to defend this support aggressively.
The 20-day EMA is sloping down and the relative strength index (RSI) is in the negative zone, indicating that the sentiment remains negative and bears may sell on rallies. If the price turns down from the 20-day EMA, the tight range action may continue for a few more days.
A break and close below the 100-day SMA could result in panic selling and pull the price down to $37,332.70. If this level also cracks, the BTC/USDT pair could plummet to $30,000.
Alternatively, a break and close above the 20-day EMA will be the first sign that the selling pressure could be reducing. The pair may then rise to the 50-day SMA ($46,580), followed by a move to $48,843.20.
Ether turned down from the 20-day EMA ($3,118) on Sept. 27 and dropped to the 100-day SMA ($2,771) on Sept. 28. The bulls have once again held the support and are attempting to push the price toward the 20-day EMA.
The downsloping 20-day EMA and the RSI in the negative territory suggest that bears remain in control. If the price turns down from the current level or the 20-day EMA, the bears will make one more attempt to break the 100-day SMA support.
If that happens, the ETH/USDT pair could slide to $2,400 and if this support also gives way, the decline could extend to $1,972.12. The bulls will have to push and sustain the price above $3,174.50 to signal that the correction may be over. The pair could then rise to the 50-day SMA ($3,291) and then to $3,676.28.
Cardano (ADA) has been trading between the 20-day EMA ($2.27) and the $1.94 support for the past few days. The long wick on today’s candlestick suggests that bears are selling on relief rallies.
The downsloping 20-day EMA and the RSI below 40 indicate that bears have the upper hand. The sellers may make one more attempt to sink and sustain the price below the zone between $1.94 and the 100-day SMA ($1.87).
If the price slips below this support zone, the selling could pick up momentum and the ADA/USDT pair could decline to $1.60 and later to $1.40. This negative view will invalidate if bulls drive and sustain the price above $2.47.
Binance Coin (BNB) closed below the $340 support on Sept. 27 but the bears could not capitalize on this move and sink the price below $320. This shows that selling dries up at lower levels.
The RSI has formed a positive divergence, indicating that the bearish momentum could be weakening. The strong rally today indicates aggressive buying at lower levels and possible short-covering by the bears.
If bulls drive the price above the 20-day EMA ($381), it will suggest that the correction may be over. The BNB/USDT pair could then rally to $433.
On the contrary, if the price again turns down from the 20-day EMA, it will suggest that traders are selling on rallies. The bears will then make one more attempt to pull the price below $320.
XRP again dropped to the 100-day SMA ($0.88) on Sept. 28. Repeated retests of a support level tend to weaken it but a minor positive sign is that the bulls have successfully defended the level on several occasions in the past few days.
The bulls pushed the price to the 20-day EMA ($1.00) today but the long wick on the day’s candlestick suggests that bears are in no mood to relent.
If the price turns down from the current level, the bears will make one more attempt to sink and sustain the price below the 100-day SMA. If they succeed, the XRP/USDT pair could decline to $0.69.
Contrary to this assumption, if bulls drive the price above the 20-day EMA, the pair could rally to the 50-day SMA ($1.11).
Although Solana (SOL) has broken out of the downtrend line, the bulls are struggling to sustain the price above the 20-day EMA ($141). This suggests that sentiment remains negative and bears are selling on rallies.
A break and close above the 20-day EMA will be the first indication that the selling pressure could be reducing. The SOL/USDT pair may then rise to the 38.2% Fibonacci retracement level at $154.20 and then to the 50% retracement level at $166.
Alternatively, if the price turns down from the 20-day EMA or the overhead resistance, the bears will try to pull the pair below the 50-day SMA ($118). A break and close below $116 could result in panic selling.
Polkadot (DOT) is attempting to rebound off the neckline of the developing head and shoulders pattern. This is an important level for the bulls to defend because a break and close below it will complete the bearish setup.
The selling could pick up momentum below the neckline, pulling the price to the 100-day SMA ($22.28) and then toward the pattern target at $12.23. The downsloping 20-day EMA ($30.12) and the RSI just below the midpoint suggest a slight advantage to bears.
Conversely, if bulls thrust the price above the 20-day EMA and the downtrend line, it will indicate that bears may be losing their grip. The pair could then rally to $33.60 where bears may again pose a stiff challenge. A break and close above this resistance could clear the path for a retest at $38.77.
Related: VORTECS™ Report: This key trading algo spotted bullish altcoin setups even as BTC price fell
Dogecoin (DOGE) is sandwiched between $0.19 and $0.21 for the past three days. This tight-range trading suggests indecision among the bulls and the bears about the next directional move.
The RSI is attempting to form a positive divergence, suggesting that the selling pressure could be reducing. If bulls thrust the price above $0.21, the DOGE/USDT pair could rise to the 20-day EMA ($0.22) which could again act as a stiff resistance.
A break and close above the 20-day EMA will be the first indication of strength and could open the gates for a possible up-move to the downtrend line.
Alternatively, if the price turns down from the current level or the overhead resistance and breaks below $0.19, the pair could plummet to $0.15.
The long wick on Avalanche’s (AVAX) Sept. 27 candlestick shows that bears aggressively sold on rallies. The selling continued and bears pulled the price below the support line of the ascending channel on Sept. 28.
Although bulls have pushed the price back into the channel today, the long wick on the day’s candlestick suggests that bears are selling on every minor recovery. The 20-day EMA ($62.12) has flattened out and the RSI is just above the midpoint, indicating that bulls may be losing their grip.
If the price fails to sustain inside the channel, the AVAX/USDT pair could slide to the next support at $52. Conversely, if bulls sustain the price inside the channel, the pair may rise to $72 and if this level is crossed, a retest of the all-time high at $79.80 is possible.
The bulls pushed Uniswap (UNI) above the downtrend line of the descending channel in the past two days but they could not sustain the higher levels. However, a minor positive is that bulls have not given up much ground and are again trying to scale the overhead resistance today.
The flattish 20-day EMA ($23) and the RSI near the midpoint suggest that bears are losing their grip. If the price sustains above the channel, the UNI/USDT pair could rise to the 50-day SMA ($25.88) and later to $27.62.
A break and close above $27.62 may result in a retest of the stiff overhead hurdle at $31.41. Conversely, if the price turns down from the current level, it will suggest that bears are aggressively defending the resistance. If the pair slips below $21.84, the next stop could be $17.73.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.