Three banks — Silvergate Bank, Silicon Valley Bank and Signature Bank — collapsed within a span of a few days, increasing demand for United States government bonds and sendin the yield on the 2-year Treasury tumbling to 4.06%, a fall of 100 basis points since March 8.
This was the largest three-day decline since Oct. 22, 1987, when a stock market crash saw the yield fall 117 points.
Although the Federal Reserve announced the formation of a $25 billion Bank Term Funding Program to support businesses and households, the regional banks are taking it on their chin on March 13. This shows that equities traders remain nervous.
However, among all the mayhem, it is an encouraging sign to see Bitcoin (BTC) lead the cryptocurrency recovery from the front. Bitcoin climbed back above $24,000 on March 13, covering a large distance from the $19,549 local low hit on March 10.
Could Bitcoin and the major altcoins sustain their short-term bullish momentum? Let’s study the charts to find out.
The S&P 500 (SPX) index plunged below the 200-day simple moving average, or SMA (3,940), on March 9 and followed that up with another downward move on March 10.
A break below the 200-day SMA is a bearish sign, but if the price quickly turns up and climbs back above the level, it will suggest that the breakdown on March 9 may have been a bear trap.
The index could gain momentum after buyers thrust the price above the 20-day exponential moving average, or EMA (3,986). There is a minor resistance at 4,078, but it is likely to be crossed. The index may then soar to 4,200.
On the downside, a break and close below 3,764 will suggest that the traders are rushing to the exit. That next support is at 3,700 and then 3,650.
The recovery in the U.S. Dollar Index (DXY) stalled just below the 200-day SMA (106). This suggests that the bears are trying to flip the level into resistance. The selling pulled the price below the 20-day EMA (104) on March 13.
The flattening 20-day EMA and the relative strength index (RSI) just below the midpoint indicate a balance between supply and demand. This could keep the index range-bound between 101 and the 200-day SMA for some time.
If the price turns down and plummets below the support near 101, the index will complete a head-and-shoulders (H&S) pattern. This bearish setup could start the next leg of the downtrend.
Conversely, a break above the 200-day SMA will attract buyers who may then push the price to 108 and thereafter to 110.
Bitcoin (BTC) price rebounded off the 200-day SMA ($19,717) on March 10, and the recovery picked up momentum after the break above $21,480. This suggests that lower levels are attracting buyers.
The bulls continued the upward march and cleared the hurdle at $22,800 on March 13. This opens the gates for a retest of the stiff overhead resistance at $25,250. If buyers overcome this barrier, the BTC/USDT pair could witness aggressive short covering. That may catapult the price to $30,000.
Contrarily, if the price turns down from the overhead resistance, the pair may oscillate between the 200-day SMA and $25,250 for a while longer. Such a move will be a positive sign and improve the prospects of a break above the overhead resistance. This positive view could invalidate if the price turns down and plunges below the 200-day SMA.
Ether (ETH) rebounded off the support near $1,352, indicating aggressive buying at lower levels. The recovery strengthened after bulls pushed the price back above $1,461.
The ETH/USDT pair rose back above the 20-day EMA ($1,565) on March 12, indicating that bulls are back in the game. Buyers will next try to stretch the relief rally to the overhead resistance at $1,743.
The flattening 20-day EMA and the RSI in the positive territory suggest that the momentum favors the bulls. If buyers surmount the resistance at $1,743, the pair could soar to the psychological level at $2,000.
BNB (BNB) completed a bearish H&S pattern on March 9, but the sellers could not build upon this negative setup. Buyers purchased the drop on March 10, as seen from the long tail on the day’s candlestick.
The buying continued on March 12, and the bulls pushed the price back above the 200-day SMA. This may have trapped the aggressive bears who rushed to close their short positions.
That could be the reason for the sharp up-move on March 13, which propelled the price back to the overhead resistance at $318. If bulls clear this hurdle, the BNB/USDT pair may rise to $338.
If the price turns down from this level, the pair may consolidate between $338 and $265 for a few days.
XRP (XRP) has been consolidating near the strong support of $0.36 for the past few days. Usually, a tight consolidation near the support resolves to the downside.
The downsloping 20-day EMA ($0.37) and the RSI in both in the negative territory indicate that the path of least resistance is to the downside.
If the price turns down from the current level and closes below $0.36, the XRP/USDT pair may drop to the support line of the descending channel pattern. The buyers are likely to defend the support near $0.33.
Alternatively, a break and close above the channel will be the first sign that the bears may be losing their grip. The pair may then ascend to the 200-day SMA ($0.39) and later to $0.43.
Cardano’s ADA (ADA) slipped below the 61.8% Fibonacci retracement level of $0.30, but the bears could not sustain the lower levels. This suggests solid buying by the bulls.
The ADA/USDT pair has pulled back above the 20-day EMA ($0.34). The zone between the moving averages is likely to be defended aggressively by the bears. If the price turns down from the current level, the pair may retest the strong support at $0.30. If this level cracks, the pair could drop to $0.27 and then to $0.24.
Conversely, if buyers kick the price above the 200-day SMA ($0.36), it will suggest that the corrective phase may be over. The pair may then rally to $0.42.
Polygon’s MATIC (MATIC) rebounded off the 200-day SMA ($0.95) on March 10 and reached the 20-day EMA ($1.16) on March 12.
The bears tried to stall the recovery at the 20-day EMA on March 13, but the long tail on the day’s candlestick shows strong buying at lower levels. Buyers have shoved the price above the 20-day EMA, paving the way for a rally to $1.30.
On the contrary, if the price turns down from the current level, it will suggest that bears are guarding the 20-day EMA. That may keep the MATIC/USDT pair stuck between the moving averages for some time.
Dogecoin (DOGE) turned up from $0.06 on March 10 and rose above the $0.07 resistance on March 12. The bulls will next try to push the price to the downtrend line.
The downsloping 20-day EMA ($0.07) and the RSI in the negative territory indicate that bears remain in control. If the price turns down from the 20-day EMA or the downtrend line, the DOGE/USDT pair could again drop to $0.06. If this level gives way, the pair could extend the decline to $0.05.
Contrarily, if bulls pierce the overhead resistance at the 200-day SMA ($0.08), it will suggest that the markets have rejected the lower levels. That could first push the price to $0.10 and eventually to $0.11.
Solana’s SOL (SOL) started a recovery from $16 on March 10, but the relief rally is facing strong selling at the 20-day EMA ($20.69).
The bears will again try to sink the price back to the solid support at $15.28. A break below this crucial support could accelerate selling, and the SOL/USDT pair may tumble to $12.69.
If bulls want to prevent the decline, they will have to push and sustain the price above the 20-day EMA. That could result in a retest of the strong overhead resistance zone between the 200-day SMA ($23) and the downtrend line. A break above this zone could indicate a potential trend change.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.