The SEC crackdown on Kraken sent shockwaves through the crypto sector. Is this week’s correction a buying dip opportunity or a sign of worse things to come?
On February 9, US Securities and Exchange Commission (SEC) Chairman Gary Gensler explained why the regulator cracked down on cryptocurrency exchange Kraken, forcing it to halt its crypto betting program for US customers. The news shocked crypto investors who sold aggressively. Wikipedia
Crashed around 5% on February 9th and many altcoins followed suit.
Traders are wondering if the latest round of selling is a continuation of the bear market or an opportunity to buy the dip. This question may vex investors, but for now the correction looks like a normal correction phase, with cryptocurrencies giving back some of the gains made in January. However, it makes sense to wait for the correction to end and strengthen the base before considering new purchases.
Former Bitmex CEO Arthur Hayes said in a February 7 blog post that Bitcoin may continue its bull run in the first half of the year, but will face challenges in the second half. Along with Bitcoin and Ether
, Hayes is also bullish on altcoins, but he says the trick is getting the timing right.
What are the main support levels for Bitcoin and altcoins in the near future? Let’s examine the charts of the top 10 cryptocurrencies to find out.
Support at $22,800 was broken on February 9 and Bitcoin fell to strong support near $21,480. The absence of a strong bounce from this level indicates that the correction may be deeper.
Selling below $21,480 may accelerate and the BTC/USDT pair may fall to the moving average. The Relative Strength Index (RSI) has fallen into negative territory, indicating that the bears are trying to gain the upper hand in the near term.
The moving averages have met the golden cross, but the bulls need to break the 200-day simple moving average (SMA) at $19,722 to support staying in the game.
A strong recovery from the zone between $21,480 and the 200-day SMA indicates that the bulls are trying to form a higher low. The pair could gradually move back towards $24,255. Bulls need to break the $25,211 resistance to signal the end of the downtrend.
The bears did not allow ETH to hold above the $1,680 level, which may have prompted short-term bulls to book profits.
The moving averages have met the golden cross, indicating a possible trend reversal, but the bears are unlikely to give up without a fight. Sellers are trying to pull the price below the moving average and capture aggressive bulls. If they can pull it off, selling will intensify and it could collapse to $1,200.
Instead, if the price breaks above the moving average, it indicates that the bulls are trying to move to support the 200-day SMA ($1,442). The bulls are still trying to push the price above $1,680 and take control. The ETH/USDT pair may begin its northward march towards $2,000.
A dive below the February 9 breakout level of $318 indicates aggressive selling at the higher level. This opens the way for a potential break down to the 200-day SMA ($287).
Bulls are likely to defend moving averages with strength. If the price rises with this support, the BNB/USDT pair will form an inverse head and shoulders pattern, complete with a break and close above the neckline. The target for this bullish reversal setup is $440.
On the other hand, if the price falls below the moving averages, selling will intensify and the pair may fall to $240.
After staying above the 200-day SMA ($0.39) for several days, XRP
It broke below support on February 9. This shows that the bears are trying to take over.
The 50-day SMA ($0.38) served as strong support on January 18, and bulls are once again trying to hold that level. If the price jumps from the current level and rises above the 200-day SMA, it indicates strong demand at lower levels. Buyers are looking to break the $0.43 barrier and move higher towards $0.51.
On the other hand, if the 50-day SMA is leading, it indicates that the bears are back in the driver’s seat. The XRP/USDT pair may drop to $0.33 later.
The 200-day SMA ($0.39) acted as a strong barrier for Cardano
. Although the bulls pushed the price above resistance on several occasions, they were unable to build strength.
On February 9, the price declined and fell below support at $0.38. The sellers are trying to pull the price towards the 50-day SMA ($0.33), which is likely to act as a strong support. If the price rises above the 50-day SMA, it means that the