Analysts expect the US economy to see a sharp improvement in the second half of the year, thanks to the spread of coronavirus vaccines and an increase in economic activity. As growth accelerates, so do inflation problems. There is speculation that the US Federal Reserve may need a special adjustment to keep interest rates low.
The yield on 10-year US government bonds is expected to rise from about 1% at the beginning of the year to 1626%. This has created a surplus of assets that are considered risky, and the break in the Bitcoin (BTC) rally can be seen as a return.
The falling investor sentiment has also affected the share prices of MicroStrategy and Tesla, which have recently invested in bitcoin. MicroStrategy’s share price has fallen more than 50% from a full-time high of $ 1,315, although the price of Bitcoin is currently only down 20% from its full-time.
Tesla’s share price, which announced a $ 1.5 billion purchase of bitcoins on February 8, also fell more than 34%. To prevent the fall, longtime Tesla analyst Gary Black suggested that the electric car maker dump bitcoins and use the proceeds to buy back shares instead.
Let’s analyze the charts of the top 10 cryptocurrencies to determine the critical levels of support that buyers can set and stop the current pullback.
Bitcoin / US dollars
Bitcoin fell from its highest resistance of $ 52,040.95 on March 4, indicating that traders have weakened their positions at higher levels. The sale continued and the price fell below the 20-day exponential moving average ($ 48,087).
If the bears manage to keep the price below the 20-day moving average, the BTC / USD pair could fall to the key support level of $ 41559.63, which is likely to include buyers.
If the price returns from this support, the pair can trade between $ 41959.63 and $ 52,040.95 for several more days.
The stable 20-day EMA and Relative Strength Index (RSI) near the midpoint also indicate range activity for several days.
Contrary to this assumption, if the price rises from the current level and exceeds $ 52,040.95, it will open its doors for a full-time high.
On the other hand, if the bears fall and keep the price below $ 4,1559.63, the pair could fall to $ 37,000 and then to $ 28,050.
ETH / USD
ETH (ETH) reset to $ 1,289.09 on February 28 hit a 20-day moving average ($ 1,593) on March 3. The moving averages are on the verge of a bearish crossover, and the RSI is in negative territory, indicating a possible change of direction.
If the bears fall below $ 1,289, sales may increase and ETH / USD may fall to 50% of the $ 1220 Fibonacci retracement level, and then to 61.8% of the $ 1,026 Fibonacci retracement level.
Another possibility is that the couple will charge up to $ 1,289 and stay in that area for a few more days. A breakout of $ 1670 could lead to a new test of the full-time maximum value of $ 2040.
ADA / US Dollars
The bulls are currently trying to stop the movement towards the 20-day EMA ($ 1.07). This indicates that the sentiment remains positive and bulls see the Cardano decline (ADA) as a buying opportunity.
Buyers will now try to push the price above $ 1.23. If successful, the ADA / USD pair could rise to $ 1.35 and then to a full-time $ 1.4852896.
However, it is unlikely that the bears will give up so easily. A negative RSI deviation indicates a declining momentum.
If the current bounce does not continue, the bears will again try to push the price below the 20-day moving average. If successful, the pair could fall to $ 0.80 and then to the 50-day simple moving average ($ 0.72).
BNB / US Dollar
Binance Coin Relief Meeting (BNB) fell from peak resistance to $ 265 on March 2. This indicates that traders can use the advance to close their long positions. The price fell to the 20-day moving average ($ 211).
If the price jumps aggressively from the 20-day moving average, the bulls will again try to push the price above $ 265. If successful, BNB / USD can begin the journey to a full-time high of $ 348.69.