Data from Glassnode shows that Bitcoin (BTC) held on centralized exchanges has dropped by about 20% in the past 12 months. This suggests that investors are withdrawing their Bitcoin to the cold storage with a view of possibly holding them for the long term. This has reduced the available supply while the demand has continued to increase.
The arrival of exchange-traded funds could increase the supply crunch further. After the success of the TSX Purpose Bitcoin exchange-traded fund, Canada could launch the second Bitcoin ETF by Galaxy Digital Capital Management, a subsidiary of Galaxy Digital. The approval of Bitcoin ETFs in Canada could place further pressure on U.S. regulators to be more accommodative in their approach of evaluating BTC ETF proposals.
Meanwhile, companies across the globe have continued to open their coffers to buy Bitcoin. The latest listed company that plans to buy Bitcoin is the Norwegian investment firm Aker ASA, which intends to do it through a subsidiary company called Seetee AS. This shows that the trend has only started and several companies worldwide could allocate a portion of their reserves to be held in Bitcoin.
Goldman Sachs has confirmed the launch of its crypto desk that will support CME Bitcoin futures and non-deliverable forward (NDFs) which are cash-settled. Interestingly, an internal survey by the banking giant shows that 40% of its clients already have a crypto position. The respondents of the survey expect Bitcoin to end 2021 between $40,000 and $100,000.
Let’s study the charts of the top-10 cryptocurrencies to spot the critical support and resistance levels.
Bitcoin is currently trading between the 20-day exponential moving average ($48,701) and the overhead resistance at $52,040. This tight range trading is unlikely to continue for long.
Although the 20-day EMA is flat, the relative strength index (RSI) has been gradually rising, indicating that the bulls are attempting to take control.
If bulls can push and close the price above $52,040, the BTC/USD pair will complete an ascending triangle pattern. This could result in a retest of the all-time high at $58,341 and then to $61,075, which is the pattern target of the breakout from the triangle.
On the contrary, if the price turns down from the current level and breaks below the trendline, it may attract profit-booking from short-term momentum traders. The pair could then drop to $46,313 and if this support also cracks, the decline may extend to $41,959.
Ether (ETH) broke above the $1,670 overhead resistance on March 7, which suggests strength. The 20-day EMA ($1,624) has started to turn up and the RSI has risen above 57, indicating a minor advantage to the bulls.
If the bulls can sustain the price above the moving averages, the ETH/USD pair could retest the all-time high at $2,040. A breakout of this resistance could start the next leg of the uptrend.
Contrary to this assumption, if the price turns down and breaks below the 50-day simple moving average at $1,572 the pair may retest the critical support at $1,289.
Binance Coin (BNB) rebounded off the 20-day EMA ($217) on March 5, but the bulls have not been able to push the price to the $265 overhead resistance. This suggests that demand dries up at higher levels.
If the bears sink the price below the 20-day EMA support, the BNB/USD pair could drop to $189. A breakdown and close below this support may open the doors for a decline to the 50-day SMA at $137.
On the contrary, if the price rebounds off the 20-day EMA, the bulls will try to propel the pair above $265. If they succeed, a rally to $309.49 is possible. The gradually rising 20-day EMA and the RSI above 57 suggest a minor advantage to the bulls.
Cardano (ADA) has been holding above the 20-day EMA ($1.08) for the past four days, but the failure of the bulls to start a strong rebound suggests a lack of aggressive buying at the current levels.
The bears may now try to break the 20-day EMA support and deepen the correction to $0.9817712 and then to the 50-day SMA at$ 0.769.
However, the flattening 20-day EMA and the RSI above 58 indicates that the bulls are at a minor advantage.
If the price can rebound off the current levels and rise above $1.20, the ADA/USD pair could rally to $1.35 and then to $1.48.
Polkadot (DOT) is currently trading inside a symmetrical triangle, which generally acts as a continuation pattern. But in some cases, the symmetrical triangle plays the role of a reversal pattern, signaling a trend change.
If the bears sink the price below the support line of the triangle, the DOT/USD pair could witness selling from the short-term bulls. The pair could then drop to $26.50 and the pattern target is at $17.
Conversely, if the price rebounds off the current level and rises above the triangle, the pair may retest the all-time high at $42.28. If this level is crossed, the price may extend the rally to the pattern target at $52.50.
XRP has formed an ascending triangle pattern in the short term, which will complete on a breakout and close above $0.50. This bullish setup has a target objective at $0.635.
On the other hand, if the price turns down from the current level and breaks below the trendline of the ascending triangle, the XRP/USD pair could drop to $0.359. A breakdown and close below $0.359 will complete a bearish head and shoulders pattern that may pull the price down to $0.173.
The flat 20-day EMA ($0.46) and the RSI just above 52 do not foretell a clear advantage either to the bulls or the bears. Therefore, it is best to wait for a decisive breakout to happen before taking a positional call.
Uniswap (UNI) soared to a new all-time high on March 7, but the bulls have not been able to build up on this strength. The bears are currently attempting to sink the price back below the previous resistance turned support at $33.
If they succeed, the UNI/USD pair could correct to $30 and then to the 20-day EMA ($26.23). A strong rebound off either support will suggest that traders continue to buy the dips. The bulls will then again try to resume the uptrend.
A breakout and close above $35 could start the journey to $46. The upsloping moving averages and the RSI in the overbought zone suggest the path of least resistance is to the upside.
This positive view will invalidate if the price turns down and breaks below the 20-day EMA support. This could pull the price down to the 50-day SMA at $20.31.
Chainlink (LINK) is currently range-bound between $24 and $32. The bulls pushed the price above the 20-day EMA at $28.46 on March 7 and that cleared the path for a possible rally to the $32 overhead resistance.
If the LINK/USD pair breaks and closes above $32, it will complete an ascending triangle pattern. This bullish setup has a target objective at $43.191. While the 20-day EMA is flat, the RSI in the positive zone indicates a minor advantage to the bulls.
However, if the price turns down sharply from $32 and breaks below the trendline of the triangle, it could extend the stay inside the range. The trend may favor the bears if the price turns down and breaks below the $24 support. Such a move could pull the price down to $20.111.
Litecoin (LTC) is facing stiff resistance in the $185.58 to $196.30 zone. The altcoin has turned down from the overhead resistance today and dipped back below $185.58, which suggests profit-booking at higher levels.
The bears will now try to sink the price to the 50-day SMA at $171.94 and then to the uptrend line. A break below this support could start a deeper correction to $152 and then to $120.
However, the 20-day EMA ($185) has flattened out and the RSI is near the midpoint, suggesting a range-bound action for a few days.
The trend may favor the bulls if the price turns up from the current levels and rises above $196.30. In this case, the LTC/USD pair may rally to $246.96. A breakout of this resistance could signal the resumption of the uptrend.
Bitcoin Cash (BCH) is currently sandwiched between the uptrend line and the overhead resistance at $539. The altcoin has formed a Doji candlestick pattern today, indicating indecision among the bulls and the bears.
However, the gradually downsloping 20-day EMA at $531 and the RSI below 48 suggest a minor advantage to the bears. If the sellers can sink the price below the uptrend line, the BCH/USD pair could drop to $440 and then to $370.
On the other hand, if the bulls can propel and sustain the price above $539, the pair could start its journey toward $631.71.
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.