Each breakout from Bitcoin and altcoins is being met by selling near the 20-day moving average, a signal that the market could be in for more downside.
Earlier this week billionaire investor Carl Icahn’s told Bloomberg that he is considering entering crypto in a big way but this hardly made any difference to crypto prices. This is just another hint that the underlying sentiment is bearish and that crypto markets are not reacting positively to favorable news.
However, this does not mean that the bulls have stopped buying. While speaking to Cointelegraph, S2F Capital managing partner and chief investment officer Micah Spruill said that on-chain data shows Bitcoin whales, owning between 1,000 and 10,000 (BTC), and retail traders holding between 0.1 and 1 Bitcoin, are accumulating at lower levels.
Accumulation by large players near the lows is a positive sign as it indicates they are bullish for the long term.
While speaking at Consensus 2021, ARK Investments CEO Cathie Wood said that emerging market central banks may buy Bitcoin to protect their balance sheets “because they know their currencies are going down and that they will be under attack as reserves go down.”
Traders should keep a close watch on the fundamentals of Bitcoin and the crypto sector because that will drive long-term price action. In the short term, traders' sentiment plays a major role in deciding the trend.
Let’s analyze the charts of the top-10 cryptocurrencies to determine whether crypto prices have bottomed out or not.
BTC/USDT
Bitcoin’s pullback could not even reach the 38.2% Fibonacci retracement level at $41,269, which suggests that traders are closing their positions on minor rallies. The downsloping 20-day exponential moving average ($42,780) and the relative strength index (RSI) in the negative territory suggest that bears are in control.
If the BTC/USDT pair plummets below $34,000, the decline could extend to the critical support at $30,000. The bulls are likely to defend this support aggressively.
If the price turns up from the current level, the buyers will again try to push the price above the neckline of the head and shoulders pattern. If they succeed, the pair could rally to the 61.8% Fibonacci retracement level at $48,231. Such a move will suggest that the pair may have bottomed at $30,000.
Conversely, if the bears sink the price below $30,000, the selling could intensify as the stops of the dip buyers are likely to get hit. There is a minor support at $28,000 but if that cracks, the next stop could be $20,000.
ETH/USDT
Ether (ETH) broke above the 38.2% Fibonacci retracement level at $2,738.74 on May 26 but the bulls could not push the price above the 20-day EMA ($2,888). This suggests traders are selling on rallies to the 20-day EMA.
The moving averages are on the verge of a bearish crossover and the RSI is in the negative territory, suggesting the path of least resistance is to the downside.
If bears sink the price below $2,378.54, the ETH/USDT pair could decline to $2,079.94. A break below this support could result in a retest of the May 23 low at $1,728.74.
This negative view will invalidate if the price turns up from the current level or the support and breaks above the 20-day EMA. Such a move will suggest a change in sentiment and the pair could then rally to the 61.8% retracement level at $3,362.72.
BNB/USDT
Binance Coin’s (BNB) relief rally hit a wall at the 38.2% Fibonacci retracement level at $395.09. A shallow pullback after a sharp decline suggests the bears are unrelenting and they are shorting even on minor rallies.
The bears are currently trying to pull the price below the $306.61 support. If they succeed, the BNB/USDT pair could drop to $257.40 and then to $211.70. A strong bounce off this support may keep the pair range-bound between $211.70 and $395.09 for a few days.
Contrary to this assumption, if the price turns up and breaks above the 20-day EMA ($427), the relief rally could extend to the 50-day SMA ($521). This level may act as a resistance but if the bulls arrest the next decline above $428, it will suggest the downtrend could be over.
ADA/USDT
Cardano (ADA) rose above the 20-day EMA ($1.63) on May 26 but the bulls could not sustain the higher levels. The price turned down from $1.83 and the bears have pulled the altcoin below the $1.55 support today.
If the bears sustain the price below $1.43, the ADA/USDT pair could drop to $1.24 and then to the critical support at $1. If the price rebounds off $1 once again, the pair could remain range-bound for a few days.
Alternatively, if the price turns up and rises above $1.58, it will suggest strong buying at lower levels. The bulls will then make one more attempt to push the price above $2. If they manage to do that, the pair could challenge the all-time high at $2.47.
DOGE/USDT
The failure of the bulls to build upon the breakout from the downtrend line suggests a lack of demand at higher levels. The bears resumed their selling on May 27 and have pulled Dogecoin (DOGE) below the 50-day SMA ($0.35).
If the price breaks below $0.29, the DOT/USDT pair could drop to $0.25 and then to $0.21. This is an important support to watch out for because if it cracks, the selling could intensify and the pair may drop to $0.15 and then $0.10.
The moving averages are on the verge of a bearish crossover, indicating the bears are in control. This negative view will invalidate if the price reverses direction and breaks above the $0.43 to $0.47 overhead resistance.
XRP/USDT
XRP’s relief rally hit a wall at the 38.2% Fibonacci retracement level at $1.05. This suggests the sentiment is negative and traders are in a hurry to close their long positions on a shallow pullback.
If the price breaks and sustains below $0.88, the bears will try to pull the price down to $0.65. The downsloping 20-day EMA ($1.14) and the RSI below 40 suggest the path of least resistance is to the downside.
A break below $0.65 could open the doors for a further decline to $0.56. On the contrary, if the bulls defend the $0.88 support, the XRP/USDT pair may rise to the 20-day EMA. A breakout of this resistance could result in a rally to the 50-day SMA ($1.34) and the downtrend line.
DOT/USDT
Polkadot (DOT) reached the critical overhead resistance at $26.50 today but the bulls could not drive the price above it. This suggests the bears are defending this level aggressively. If bears pull the price below $19.65, the altcoin could drop to $15.
The downsloping moving averages and the RSI below 39 suggest the bears are in command. A break below $15 will suggest the start of a new downtrend. Conversely, if the bulls defend the $15 level, the DOT/USDT pair may consolidate in a range for a few days.
This negative view will invalidate if the price turns up from the current level or $15 and breaks above $26.50. Such a move could push the pair to $31.28. A breakout of this resistance will suggest the bulls are back in the game.
ICP/USDT
Internet Computer (ICP) has been trading inside the tight range of $120 and $168 for the past few days. Today, the bears are attempting to sink the price below the support of the range at $120.
If they succeed, the ICP/USDT pair could drop to the all-time low at $86.01. If this support also cracks, the pair could decline to the next target objective at $60.
On the contrary, if the bulls defend the $120 support, the pair may extend its stay inside the range for a few more days. A breakout and close above $168 will be the first indication that the bulls are back in the game.
On a breakout and close above $168, the pair could rally to the 38.2% Fibonacci retracement level at $243.08.
UNI/USDT
Uniswap (UNI) reached the 20-day EMA ($29.58) on May 26 but the bulls could not propel the price above it. This shows the sentiment has turned negative and traders are selling on rallies to the 20-day EMA.
However, the long tail on today’s candlestick suggests the bulls have not given up yet. They will make one more attempt to thrust the price above the 20-day EMA. If they manage to do that, the UNI/USDT pair could rally to the 50-day SMA ($34.27).
Contrary to this assumption, if the price turns down from the overhead resistance, the bears will make one more attempt to pull the price down. If the sellers sink the price below $24.40, the pair could drop to $21.50 and then to $18.
BCH/USDT
Bitcoin Cash (BCH) had been trading above the $685.36 support for the past three days but the bulls could not push the price to the 20-day EMA ($876). This suggests a lack of demand at higher levels.
If the price sustains below $685.36, the bears will try to sink the price to the May 23 low at $468.13. The downsloping 20-day EMA and the RSI in the negative territory indicate advantage to the bears.
Contrary to this assumption, if the price turns up from the current level and rises above $802, the bulls will try to propel the price to the 20-day EMA. A breakout and close above the moving averages will suggest the downtrend could be over.
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.
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