Bitcoin and some altcoins have fallen below their immediate support levels, opening the door for further declines.
Bitcoin (BTC) and most major altcoins started the new week on a soft note, with the crypto fear and greed index falling into the extreme fear zone, suggesting investors are still nervous.
Bitcoin is down about 17% year-to-date, while the Nasdaq 100 is down about 16% over the same period, suggesting a strong correlation between the two. In comparison, gold is up more than 10% in 2022, and its 50-day correlation coefficient with Bitcoin “is around minus 0.4, the lowest since 2018,” according to journalist Colin Wu.
Cryptocurrency market daily indicators. Source: Coin360
While the cryptocurrency’s price action remains bearish, the declining Bitcoin balance on crypto exchanges shows that long-term investors are unconcerned and continue to accumulate at every opportunity. Data from analytics firm CryptoQuant shows that bitcoin balances across 21 major exchanges have fallen to 2.274 million bitcoins as of April 17, the lowest since July 2018.
Can buying appear at lower levels or will the bears take advantage and push prices lower? Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Bitcoin has been trading within an ascending channel pattern for the past few days. The bulls have been defending the psychological $40,000 level for the past few days but have been unable to stage a strong recovery from it. This suggests that demand is drying up at higher levels.
BTC/USDT daily chart. Source: Trade View
The bears pulled the price below the immediate support at $39,200 on April 18, but the long tail of the candle indicates that the bulls are buying at lower levels.
If the price regains above $40,000, the bulls will make another attempt to break the 50-day simple moving average (SMA) ($42,167). If they succeed, the pair could rally to $43,900 and then attempt a climb to the 200-day SMA ($48,109).
On the other hand, if the rally stops at $40,000, it would mean that the bears have turned this level into resistance. This will strengthen the prospects of falling to the channel support line. The bulls are expected to vigorously defend this level as a break below this level could open the doors for a potential drop to $32,917.
Ether (ETH), trading in a tight range between the 20-day exponential moving average (EMA) ($3,103) and the 50-day SMA ($2,991), ended lower on April 18. The bulls pushed the price below the immediate support at $2,950. .
Daily ETH/USDT chart. Source: Trade View
The descending 20-day EMA and the Relative Strength Index (RSI) below 40 indicate that the bears are in control. If the price stays below the 50-day SMA, ETH/USDT could drop to $2,817 and then an uptrend line.
Contrary to this assumption, if the price reverses and scales above the 50-day SMA, it would mean that the bulls are trying to catch aggressive bears. A break and close above $3,150 could signal that the correction may be complete.
BNB has deviated from the 20-day EMA ($417) and broke the 50-day SMA ($407) on April 18, but the daily candle’s long tail suggests buying lower levels.
BNB/USDT daily chart. Source: Trade View
The bulls will attempt to trap the aggressive bears and propel the BNB/USDT pair above the zone between the 20-day EMA and $427. If they succeed, the pair could head north towards $445.
Conversely, if the price turns down from the current levels or the 20-day EMA, it would indicate that the bears are active at higher levels. Sellers will then try to sink the price below $391 and challenge the strong support at $350.
The bulls’ inability to sustain Ripple (XRP) above the 50-day SMA ($0.78) on April 16 could attract selling from traders who might be buying at lower levels. The price reversed down and broke the 20-day EMA ($0.76) on April 17.
Daily XRP/USDT chart. Source: Trade View
If the price stays below the 20-day EMA, the bears will attempt to sink the XRP/USDT pair to strong support at $0.69