Although bears defeated BTC’s bid to regain $40,000, any consolidation within the current range could favour small and large-cap altcoins.
Bitcoin (BTC) fell below $38,000 on February 21, but bulls are seeking to halt the slide and kick-start the comeback. The persistence of weakness in 2022 appears to have dampened expectations for a robust rally.
Du Jun, co-founder of Huobi cryptocurrency exchange, stated that if the Bitcoin halving cycle continues, the current downturn could signal the start of a bear market. Jun predicts that the next Bitcoin bull cycle would begin either in late 2024 or early 2025.
In the medium term, crypto markets are likely to be influenced by geopolitical tensions between Russia and Ukraine, the US Federal Reserve’s tightening cycle, and the performance of risky assets.
Could Bitcoin and a few other cryptocurrencies recover from recent lows, or will selling gain momentum? To learn more, let’s examine the charts of the top ten cryptocurrencies.
On Feb. 20, bitcoin plummeted and fell below the critical support level of $39,600. On Feb. 21, the selling began, and the bears dragged the price down to $37,213.63.
The recent barrage of selling has dragged the relative strength index (RSI) into negative territory, while the 20-day exponential moving average (EMA) ($40,986) has dipped. This demonstrates that the route of least resistance is downward.
The purchasers are aiming to re-establish the price above the $39,600 breakdown mark. This is a critical mark to monitor because if bears convert it to resistance, selling will likely intensify and the BTC/USDT pair will likely fall to the $36,250 to $35,507.01 support zone.
On the other hand, if bulls can push the price over $39,600 and the moving averages, it indicates strong demand at lower levels. This might pave the way for a rally to $45,821.
On Feb. 18, Ether (ETH) re-entered the ascending channel. This was the first sign that the recovery was beginning to falter. On Feb. 19, the bulls attempted to push the price back above the channel, but the bears maintained their pressure.
On Feb. 20, the ETH/USDT pair broke and closed below the important support level of $2,652, but sellers were unable to capitalise on this advantage. This shows that substantial buying is occurring at current levels. The price significantly recovered on Feb. 21, and buyers are attempting to push the pair above the channel’s resistance line.
If they succeed, the pair may put the moving averages under pressure. The first sign of strength might be a break and closure above the 50-day simple moving average (SMA) ($2,971).
If, on the other hand, the price reverses from its current level and falls below $2,652, the pair may fall to $2,316 and then $2,159.
On Feb. 19, the bulls attempted to push Binance Coin (BNB) back above the descending channel’s downtrend line, but the bears did not relent.
On Feb. 20, the selling resumed, and the bears dragged the price below the solid support level of $390.50. This might have triggered stops for traders who purchased the channel break and close above it. The lengthy wick on the candlestick of February 21 shows that bears are attempting to convert the $390.50 level to resistance.
If bears succeed in bringing the market below $357.40, the BNB/USDT pair may fall to the strong support zone between $330 and $320. The bulls will need to push and keep the price above the 50-day SMA ($422) to signal that the bears’ grip may be slipping.
On February 18, Ripple (XRP) bounced off the $0.75 support level, however the subsequent relief rally faltered around the overhead resistance level of $0.85 on February 19. This suggests that bears are actively protecting this level.
On Feb. 20, renewed selling drove the price to the strong support zone between the moving averages. If this support zone fails to hold, numerous stops may be reached, and the XRP/USDT pair may fall to $0.65 and then to $0.60.
In the event that the price bounces off the support zone, bulls will aim to push the pair above the downtrend line and the $0.85 overhead barrier. If they are successful in doing so, the pair may rally to the psychological level of $1.
On Feb. 18, Cardano (ADA) fell below the psychological mark of $1 and closed below it. This indicates that the downturn has resumed. On Feb. 19, bulls pushed the price back above $1 but were unable to sustain the gains.
The lengthy wick on the candlestick for February 21 suggests that bears are defending the $1 level and attempting to convert it to resistance. If the price remains below $1 for an extended period, selling might intensify and the ADA/USDT pair could fall to the next strong support level around $0.80.
Alternatively, if the price reverses and moves over the 50-day SMA ($1.15), it indicates that markets have rejected the lower levels. This could operate as a bear trap, potentially resulting in a short squeeze. After that, the pair might rally to $1.60.
On Feb. 20, Solana (SOL) created a long-legged Doji candlestick formation, signalling hesitation between bulls and bears. On February 21, the bulls attempted to settle the uncertainty to the upside, but the bears successfully defended the 20-day exponential moving average ($100).
Both moving averages are trending downward, and the RSI is trading below 38, implying the bears are in control. Sellers will now aim to push the SOL/USDT pair below the pair’s strong support level of $80.83.
If they are successful, the pair may resume its downward trajectory. On the downside, the next support level is $66. This negative view will be rendered meaningless in the short term if the price breaks and maintains above the 20-day exponential moving average.
Bulls will then attempt to push the pair above the channel’s resistance line, signalling a possible trend change.
On Feb. 20, Avalanche (AVAX) fell below the moving averages and the uptrend line, indicating that the higher levels continue to attract bearish selling.
On Feb. 2, bulls attempted to push the price back above the uptrend line, but the candlestick’s lengthy wick indicates that bears are defending the breakdown level. If the price falls below $74.70 and remains there, the AVAX/USDT pair might go as low as $65.
The RSI has entered the negative territory and the 20-day exponential moving average ($82) has begun to decline, indicating that bears have gained the upper hand. This bearish perspective will be invalidated if the price breaks above the downtrend line and returns to the current level. This might trigger a rally to the psychologically significant threshold of $100.
The extended tail on the February 20 candlestick indicates that buyers are defending the $46.50 immediate support level. Terra’s LUNA token has the potential to ascend to the 20-day exponential moving average ($54), where bears are expected to make a robust defense.
If the price breaks below the strong support zone between $46.50 and $43.44, the chances of a breach below the strong support zone at $46.50 to $43.44 grow. This might result in the LUNA/USDT pair falling to the important support level of $37.50.
On the other hand, if bulls push and keep the price above the 20-day EMA, the pair may advance to the descending channel’s downtrend line. Bulls will need to push and sustain the pair above the 50-day SMA ($63) in order to signal a possible trend change.
On Feb. 19, Dogecoin (DOGE) attempted to break above the 20-day exponential moving average ($0.14), but the candlestick’s lengthy wick indicates that bears are defending this resistance.
Both moving averages are sloping downward, and the RSI is in the negative territory, implying the bears are in control. The longer the price remains below the moving averages, the more likely it will fall to the solid support level of $0.12.
Bulls are likely to vigorously defend this level, as a break below it could result in a drop to the psychological support level of $0.10.
This bearish perspective will become obsolete in the short run if the price reverses and rises above the 50-day simple moving average ($0.15). This might result in the DOGE/USDT pair reaching $0.17.
Polkadot’s (DOT) inability to recover from the strong support level of $16.81 reflects a lack of demand at higher levels. This increases the likelihood of a further drop.
If bears successfully drag the price below $16.81, selling might intensify and the DOT/USDT pair could fall to $13 before retesting important support at $10.37. Moving averages on the downside and an RSI below 37 imply that the path of least resistance is to the downside.
A break and closure above the downtrend line will be the first indication of strength. This might pave the way for an eventual advance to the 50-day SMA ($21.67) and ultimately to $23.19.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.