BTC and altcoins are pulling back sharply, but is today’s correction a simple retest of minor support or a sign of worse things to come?
US stock markets recorded their worst performance of 2023 as investors panicked and pulled out of stocks on February 21, fearing further rate hikes by the US Federal Reserve.
While the cryptocurrency markets also gave back some gains, the fall was relatively quiet. UTXO Management senior analyst Dylan LeClair said Bitcoin is
bitcoins
press down
$26,299
Correlation with the S&P 500 index fell to its lowest level since late 2021.
After a sharp recovery from the decline, data from Glassnode showed that only 21% of coins sent by long-term holders to the exchange earlier this week were trading at a loss. This is a big improvement from mid-January when 56% of LTH coins sent to exchanges turned into losses.
The growth of cryptocurrencies and the US stock market is a good sign, but traders need to be careful. If stocks fall sharply and risk perception increases, then the cryptocurrency crowd may struggle to maintain gains.
What are the main steps that can stop the correction in Bitcoin and altcoins? Let’s analyze the chart of the top 10 cryptocurrencies to find out.
BTC/USD
Bitcoin faced another resistance at $25,211 on February 21, which could tempt short-term bulls to ignore gains. This could take the price to the first major support at the 20-day EMA ($23,364).
In the upside, buyers are looking for protection of the 20-day EMA and then the 50-day simple moving average ($21,772). If the price bounces off the 20-day EMA, it will indicate that the bulls are not waiting for a deep correction to buy. This could improve the odds for the rally to over $25,250.
Conversely, if the price breaks below the 20-day EMA, it will suggest that traders are rushing to the exit point. This could lead to a decline in the 50-day SMA. The BTC/USDT pair may try to bounce back but the 20-day EMA may present a strong challenge on the way.
The short-term trend may turn to the bears if the price closes below the important support at $21,480.
ETH/USD
Although Ether
ETH
press down
$1,714
has been above $1,680 since February 17, the bulls failed to clear the major hurdle at $1,743. This can attract short-term traders to sell.
The price fell on February 21 and fell below the breakout level of $1,680. Sellers will look now to take advantage of this opportunity and push the price below the 50-day SMA ($1,550).
If they manage to do so, ETH/USDT may enter support immediately at $1,461. Bulls are expected to defend this level strongly because if this support is broken, the pair could slide to $1,352.
Bulls will have a chance if they quickly push the price above $1,680. Such a move would indicate aggressive buying on lower dips. A break above $1,743 could start the next move up to $2,000.
BNB/USD
Even after the attempt, the bulls failed to push BNB
BNB
press down
$331
above the $318 resistance for the past few days. This shows that the bears are defending the $318 level very well.
Bears will try to extend their lead by dropping the price below the 50-day SMA ($306). If successful, the BNB/USDT pair may drop to the next major support at $280. If the price rebounds from this level, the pair could swing between $318 and $280 for a few days.
The flat 20-day EMA and the RSI near the midpoint also point to a level bound in the short term. Bulls will need to push the price above $318 to win.
