Traders have continued to sell at the peak of each rally, resulting in a significant decline in the price of Bitcoin and several other major cryptocurrencies.
Europe and the United States’ equities markets are a sea of red as traders continue to dump risky assets in response to the geopolitical crisis. Bitcoin (BTC) and a number of other major cryptocurrencies are also seeing profit-taking following their recent gains.
Another factor that may be keeping investors on edge is the Federal Open Market Committee’s (FOMC) impending meeting on March 16. Fed Chair Jerome Powell indicated in a statement on March 2 that the central bank is likely to boost rates this month.
Brian Coulton, chief economist at Fitch Ratings, anticipates that core inflation will stay strong in 2022 and that the Fed will raise the “Fed funds rate to 3% by the end of 2022.”
ExoAlpha managing partner and chief investment officer David Lifchitz stated that Bitcoin may remain poor in the short term due to the fact that a rate hike by the Federal Reserve technically “strengthens” the US dollar, hence “weakening” Bitcoin. He does not anticipate a significant impact on Bitcoin, however.
Numerous uncertainty could serve as a short-term ceiling on upward rallies. Let us examine the charts of the top ten cryptocurrencies in order to identify crucial support and resistance levels.
BTC/USDT
Bitcoin fell from $45,400 to $45,821 on March 2, indicating that bears are defending the $45,821 overhead barrier. The price has fallen to the moving averages, which is a critical support level to monitor.
If the price corrects back above the moving averages, this indicates that bulls are buying on dips. Bulls will then attempt to push price over the overhead resistance zone at $45,821 and the ascending channel’s resistance line. If they are successful, the BTC/USDT pair may rise toward the next significant resistance level at $52,088.
To the contrary, if the price falls below the moving averages, it indicates that traders are selling at higher levels. This might pave the way for a probable collapse to $37,000 and ultimately to the channel’s support line.
The flattish 20-day exponential moving average ($40,899) and the near-midpoint of the relative strength index (RSI) indicate a few days of range-bound movement.
ETH/USDT
On Feb. 28, Ether (ETH) broke and closed above the 50-day simple moving average ($2,838), but bears successfully defended the psychologically significant $3000 level. This could have resulted in short-term traders selling, which dragged the price below the moving averages.
The ETH/USDT pair may now fall to the symmetrical triangle’s support line. This is a critical level for bulls to defend, as if it cracks, selling might intensify. If the price remains below the triangle for an extended period of time, the downtrend may restart. The pair could then fall to $2,300, where bulls are expected to step in.
Alternatively, if the price reverses from the support line, bulls will attempt to push the pair over the overhead resistance level of $3,000 and test the triangle’s resistance line.
BNB/USDT
Although bulls pushed Binance Coin (BNB) over its 50-day simple moving average ($403), they were unable to hold the gains. This indicates that bears are putting their all into defending the level.
The sellers are attempting to drive the stock below the 20-day exponential moving average ($391). If they do so, the BNB/USDT pair may fall toward the pair’s strong support level of $350.
Alternatively, if the price breaks and closes above the 50-day SMA, the probability of a break and closure above the 50-day SMA increases. This might pave the way for a rally to the overhead resistance level of $445.
The flattish 20-day exponential moving average and the near-midpoint RSI predict range-bound behaviour in the short term.
XRP/USDT
Ripple (XRP) reversed from the downtrend line and fell to the 50-day simple moving average ($0.73), showing that bears have not yet given up.
If the market corrects back above the 50-day SMA, buyers will attempt to push and sustain the XRP/USDT pair above the downtrend line. If they succeed, buying momentum may increase and the pair may rise toward $0.91.
On the other side, if the price remains below the 50-day SMA for an extended period of time, bears will seek to bring the pair down under $0.62. The flattish moving averages and the RSI near the midway provide neither bulls nor bears a clear advantage.
LUNA/USDT
While Terra’s LUNA token has been unable to maintain a price over $94 in the short term, the positive indicator is that buyers have not given up much ground. In the last three days, bulls have frequently bought the dip to $86.
A tight consolidation near an overhead resistance level is typically a sign of strength that resolves to the upside during an upswing. If bulls successfully push and sustain the price over $94, the LUNA/USDT pair may target the all-time high of $103.
A break and closing above this level will signal the resumed uptrend. After that, the pair might rally toward $110. The rising 20-day exponential moving average ($72) and the RSI near the overbought zone indicate a buyer’s advantage.
This bullish outlook will be rendered worthless in the short term if the price falls below $86. This could result in a price increase to $80.
SOL/USDT
On March 2, Solana (SOL) broke through the resistance line of the declining channel, but the bulls were unable to break through the barrier at the 50-day SMA ($103). Failure to do so may have enticed short-term traders to book profits. This reintroduced the pricing to the channel.
If bears continue to push the price below the 20-day exponential moving average ($95), the SOL/USDT pair might fall to firm support at $81. This is a critical level to monitor, as the bulls have successfully defended it twice in recent days.
If the price rebounds from $81, it is possible that the pair will reach the 50-day SMA and then trade range-bound between these two levels for a few days.
A break and closure above the 50-day SMA will signal the conclusion of the downtrend. The pair may possibly trade as high as $122. Alternatively, if bears continue to drive the pair below $81, the slide might reach $66.
ADA/USDT
When strong supports are breached during major downtrends, they typically convert to resistance, as was the case with Cardano (ADA). The relief rally came to a halt at the $1 breakdown level, implying that bears are defending this level.
The bears will now attempt to push the price below immediate support at $0.82 and test the intraday low of February 24 at $0.74. If this level likewise fails to hold, the ADA/USDT pair’s slump might extend to $0.68.
In contrast to this idea, if the market recovers from $0.82, the bulls will attempt to breach the $1 barrier once more. If they succeed, it will be the first indication that the sellers’ hold on the market is slipping. Bulls must push and maintain the pair above the channel in order to signal a possible trend change.
AVAX/USDT
For the fourth time in a row, Avalanche (AVAX) has deviated downward from the descending channel’s downtrend line. This indicates that traders are shorting rallies to this point.
The bears are aiming to keep the price below the moving averages, while the bulls are buying dips and seeking to keep the AVAX/USDT pair above the 20-day exponential moving average ($80). The flattish 20-day EMA and the RSI at the midway suggest that supply and demand are in equilibrium.
If bulls can drive the price above the 20-day exponential moving average, the pair may retest the downtrend line. The bulls must overcome this obstacle in order to signify a possible trend change. Alternatively, if the pair’s price falls below $71, it might fall to $64.
DOT/USDT
Polkadot’s (DOT) inability to break above the 50-day simple moving average (19) shows that sentiment remains negative and traders are selling on rallies to hard resistance levels.
The bears have dragged the stock below the 20-day exponential moving average ($18) and will now attempt to breach the solid support zone between $16 and $14. This zone has been successfully defended twice previously, and hence the bulls will attempt to defend it with vigour once more.
If the price recovers from the zone, the DOT/USDT pair may retrace its steps to the moving averages. The first indication that the downtrend may be coming to an end will be a break and closure above the 50-day SMA.
In the opposite direction, a break and closure below the zone will reintroduce the downtrend. The pair may then opt for psychological support at a cost of $10.
DOGE/USDT
Dogecoin’s (DOGE) relief rally came to a halt at the 20-day exponential moving average ($0.13), showing that bears are unwilling to relinquish their lead. Bears are attempting to drag the price down to the solid support level of $0.12.
Retesting a support level repeatedly tends to erode it, implying that bulls are unable to sustain the higher levels. If the price falls below $0.12 and remains there, the DOGE/USDT pair may fall to the psychological level of $0.10.
Moving averages on the downside and an RSI in negative zone signal that the path of least resistance is to the downside. In the medium term, this bearish view will be invalidated if bulls push and sustain the pair above the 50-day SMA ($0.14).
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
