Bitcoin (BTC) and most major altcoins have started the new week on a soft note and the Crypto Fear and Greed Index has dropped into the “extreme fear” zone, suggesting that investors are still nervous.
Bitcoin has declined about 17% year-to-date while the Nasdaq 100 has dropped about 16% during the same period, indicating a tight correlation between the two. In comparison, gold has risen more than 10% in 2022 and its 50-day correlation coefficient with Bitcoin “is around minus 0.4, the lowest since 2018," according to journalist Colin Wu.
Although the crypto price action has remained bearish, the declining balance of Bitcoin on the crypto exchanges indicates that long-term investors are unperturbed and continue to accumulate at every available opportunity. Data from on-chain analytics firm CryptoQuant suggests that the Bitcoin balance of 21 major exchanges dropped to its lowest level since July 2018 at 2.274 million Bitcoin as of April 17.
Could buying emerge at lower levels or will bears build upon their advantage and sink prices lower? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin has been trading inside an ascending channel pattern for the past several days. The bulls defended the psychological level at $40,000 for the past few days but could not achieve a strong rebound off it. This suggests that demand dries up at higher levels.
The bears pulled the price below the immediate support at $39,200 on April 18 but the long tail on the candlestick indicates bulls are buying at lower levels.
If the price rises back above $40,000, the bulls will make one more attempt to clear the 50-day simple moving average (SMA) ($42,167). If they succeed, the pair could rise to $43,900 and later attempt a rally to the 200-day SMA ($48,109).
Conversely, if the recovery falters at $40,000, it will suggest that bears have flipped this level into resistance. That will enhance the prospects of a drop to the support line of the channel. The bulls are expected to defend this level with all their might because a break below it could open the doors for a possible drop to $32,917.
Ether's (ETH) tight range trading between the 20-day exponential moving average (EMA) ($3,103) and the 50-day SMA ($2,991) resolved to the downside on April 18. The bulls have pulled the price below the immediate support at $2,950.
The downsloping 20-day EMA and the relative strength index (RSI) below 40 indicate that bears are in control. If the price sustains below the 50-day SMA, the ETH/USDT pair could slide to $2,817 and then to the uptrend line.
Contrary to this assumption, if the price turns up and rises above the 50-day SMA, it will suggest that the bulls are attempting to trap the aggressive bears. A break and close above $3,150 could suggest that the correction may be over.
BNB turned down from the 20-day EMA ($417) and broke below the 50-day SMA ($407) on April 18 but the long tail on the daily candlestick suggests buying at lower levels.
The bulls will attempt to trap the aggressive bears and push the BNB/USDT pair above the zone between the 20-day EMA and $427. If they manage to do that, the pair could start its northward march toward $445.
Conversely, if the price turns down from the current level or the 20-day EMA, it will suggest that bears are active at higher levels. The sellers will then try to sink the price below $391 and challenge the strong support at $350.
The failure of the bulls to sustain Ripple (XRP) above the 50-day SMA ($0.78) on April 16 could have attracted selling by traders who may have purchased at lower levels. The price turned down and broke below the 20-day EMA ($0.76) on April 17.
If the price sustains below the 20-day EMA, the bears will attempt to sink the XRP/USDT pair to the strong support at $0.69. This is an important level for the bulls to defend because if it cracks, the selling could intensify and the pair may drop to $0.60.
The 20-day EMA has started to turn down and the RSI is in the negative territory, suggesting that bears have a slight advantage. This negative view will invalidate if the price turns up from the current level and breaks above $0.80. That could clear the path for a move to $0.85.
Solana (SOL) attempted to rise above the 20-day EMA ($106) on April 17 but the long wick on the day’s candlestick suggests that bears are selling on rallies to this level. The selling picked up momentum on April 18 and the bears have pulled the price below the 50-day SMA ($100).
The downsloping 20-day EMA and the RSI in the negative territory suggest that bears have the upper hand. If the price breaks below the support line of the ascending channel, the SOL/USDT pair could drop to $86 and thereafter to $75.
Conversely, if the price rebounds off the support line of the channel, the buyers will again attempt to push the pair above the 20-day EMA. If they succeed, it will suggest that the bears may be losing their grip. The pair could then rise to $122.
Cardano (ADA) repeatedly tried to rise above the psychological level at $1 in the past few days but the bears held their ground. This suggests that the bears have successfully flipped the level into resistance.
The selling resumed on April 18 and the bears have pulled the price below the immediate support at $0.91. If the price sustains below this level, the ADA/USDT pair could decline to the critical level at $0.74.
The bulls are expected to defend this level with all their might because if they fail in their endeavor, the downtrend could resume and the next stop may be $0.68.
Contrary to this assumption, if the price rises from the current level and breaks above $1, it will suggest a lack of selling at lower levels. The pair could then rise to $1.10 and later to $1.26.
Terra’s LUNA token sharply rebounded off the strong support at $75 on April 18, indicating aggressive buying at this level. The bulls will now attempt to push the price to the 20-day EMA ($90) where they are likely to encounter strong selling by the bears.
If the price turns down from the 20-day EMA, it will increase the possibility of a break below the strong support at $75. If that happens, the pair could retest the critical support at the 200-day SMA ($67). This is an important level to keep an eye on because a break below it could accelerate selling.
On the other hand, a break and close above the 20-day EMA will be the first sign that the correction may be over. The buyers will then attempt to propel the pair to the psychological level at $100.
Avalanche (AVAX) bounced off the uptrend line on April 15 but the failure to push the price above the moving averages may have attracted selling by the short-term traders. That pulled the price below the uptrend line today.
If the price sustains below the uptrend line, the ascending triangle pattern will invalidate and the AVAX/USDT pair could drop to $65. If the price rebounds off this support, the pair could remain range-bound between $65 and $99 for a few more days.
The downsloping 20-day EMA ($81) and the RSI near 39 indicate that the path of least resistance is to the downside.
Conversely, if the price rises and sustains above the uptrend line, it will suggest that the ascending triangle pattern remains intact. The bulls will then make one more attempt to push the price above the moving averages.
Dogecoin (DOGE) turned down from $0.15 on April 15 indicating a lack of buying at higher levels. The price dipped back below the 20-day EMA ($0.14) on April 17 and has reached the 50-day SMA ($0.13).
If bears sink the price below the 50-day SMA, the DOGE/USDT pair could drop to the strong support at $0.12 and later to the psychological level at $0.10. The RSI has dipped into the negative zone, indicating a slight advantage to sellers.
Alternatively, if the price rebounds off the current level and rises above $0.15, the pair could attempt a rally to the 200-day SMA ($0.18). A break and close above this level could signal the start of a new up-move.
Polkadot (DOT) turned down from the overhead resistance at $19 on April 17, indicating that bears are selling on rallies to this level. The bears will now attempt to sink the price to the strong support at $16.
The 20-day EMA ($19) is sloping down and the RSI is below 40, suggesting that the momentum favors the bears. A break and close below $16 will be a huge negative as that could open the doors for a possible drop to $14.
On the contrary, if the price rebounds off $16, the bulls will again attempt to push the DOT/USDT pair above $19. If they manage to do that, the pair could continue its range-bound action between $16 and $23 for some more time.
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.