Bitcoin’s failure to sustain above $40,000 has prompted traders to target extreme lows in the $25,000 area, which would be deadly for most altcoins.
The US Dollar Index (DXY) fell from its 20-year high on April 29, but that didn’t change the bearish price action seen in Bitcoin (BTC) and US stock markets. Stocks remain under pressure, with Amazon shares posting their biggest intraday decline since 2014 this week after uncertainty over a US Federal Reserve tightening sent investor sentiment back into troubled waters.
If Bitcoin extends its correction, network analysis platform Whalemap believes the $25,000-$27,000 zone could be the best place to go all-in on Bitcoin.
Long-term investors don’t appear to be panicking over Bitcoin’s current weakness, as data from CryptoQuant shows that cumulative BTC holdings across 21 crypto exchanges have fallen to levels not seen since September 2018.
Cryptocurrency market daily indicators. Source: Coin360
The HODL mentality is not just limited to Bitcoin investors. CoinGecko’s Non-Fungible Token (NFT) Research Report found that over 50% of respondents reported having a HODL mentality as they believe NFTs can be important elements in games. The report added that Metaverse could become an $800 billion market in the next two years.
Can bitcoin and altcoins fall further or is this a chart reversal? Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Bitcoin returned to the 20-day exponential moving average (EMA) of $40,363 on April 28, but the long wick on the daily candle suggests the bears are selling the rally to this level.
BTC/USDT daily chart. Source: Trade View
A descending 20-day EMA and a Relative Strength Index (RSI) below 41 indicate that the path of least resistance is down. If the bears fall and sustain the price below the channel support line, the BTC/USDT pair could drop further to $34,300 and then $32,917.
Buyers need to push and hold the price above the 50-day simple moving average (SMA) of $41,981 to counter this negative sentiment. If successful, the pair could begin its northward journey towards the 200-day SMA ($47,433), where the bears could challenge again.
Ether (ETH) has retreated to the 20-day EMA ($2,991) for the past two days, but the bulls have failed to push the price above it. This suggests that sentiment remains negative and traders are selling on the upside.
Daily ETH/USDT chart. Source: Trade View
Now the bears will try to sink the price to the uptrend line. This is an important level for bulls to protect as a break and close below this level can nullify the developing ascending triangle pattern. The ETH/USDT pair could then drop to $2,450.
This negative view may not be valid in the short-term if the price rises and surpasses the 50-day SMA ($3,045). This could attract buyers who could then push the pair towards the 200-day SMA ($3,464). A break and close above this level can signal the start of a new upward move.
On April 26, BNB fell below $391 but the bears failed to sustain the lower levels. On April 27th, the price rose above the breakout level again. This speaks for demand at a lower level.
BNB/USDT daily chart. Source: Trade View
The bulls pushed the price towards the 50-day SMA ($410) on April 28 but failed to clear this hurdle. This suggests that the bears are selling on the rally. Now, the bears will attempt to sink the price below the $391-$380 support zone.
If they succeed, BNB/USDT could drop to strong support at $350. Buyers are expected to build strong defenses at this level. The short-term trend could turn positive if the bulls push and sustain the price above the 50-day SMA.
Solana (SOL) bounced off the rising channel support line on April 27, but the bulls were unable to sustain the positive momentum and clear the upper hurdle of the 20-day EMA ($101).
SOL/USDT daily chart. Source: Trade View
The bears see an opportunity now and will try to lower the course