The explosion of the Terra ecosystem seems to be indicative of a contagion that is negatively impacting bitcoin and altcoins.
The TerraUSD (UST) stablecoin crisis and the free fall of the Terra LUNA token have further weighed on crypto sentiment. While Terraform Labs CEO Do Kwon has announced a relief plan, the community doesn’t seem to have much hope for a resurgence.
Another hurdle to a quick improvement in sentiment is that the US CPI rose 8.3% year-on-year to outperform estimates by 0.2%. Although the numbers are slightly below March’s 8.5%, the slow slowdown suggests that further Fed tightening will not stop.
Daily dynamics of the cryptocurrency market. Source: Coin360
Although the surrender screen looks intimidating, it also offers one of the best moments to join the herd and accumulate fundamentally strong cryptocurrencies at a bargain price. Traders should not be in a rush to catch the falling knife, but should wait for the price to stabilize and the capitulation to end before gradually buying.
What are the key levels of Bitcoin (BTC) and major altcoins that could attract buyers? What key resistance levels at the top can indicate a possible trend reversal? Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Bitcoin plummeted on May 9 and attempted to recover from the $30,000 psychological level on May 10. A long wick on the daily candle shows that the bears are not ready to give up and continue to sell on smaller rallies.
BTC/USDT daily chart. Source: Trading View
The bears tried to extend their lead on May 11, but the bulls are vigorously defending the critical $28,805 level. This is an important level to keep an eye on because if it breaks, selling could increase. The BTC/USDT pair could then fall to $25,000 and then to $20,000.
While the falling moving averages point to the advantage of the sellers, the Relative Strength Index (RSI) in oversold territory suggests that a recovery or consolidation is possible.
If the price rises from the current level, it could reach the 20-day exponential moving average (EMA) ($36,214). This is an important level to keep an eye on because if the price deviates from this level, the bears will make another attempt to take the pair below $28,805.
Alternatively, if the bulls push the price above the 20-day EMA, the pair could rise to the 50-day Simple Moving Average (SMA) ($40,792).
Ether (ETH) hit a strong support level at $2,159. The bulls are likely to form a strong defense at this level as if support breaks, selling could pick up momentum.
Daily ETH/USDT chart. Source: Trading View
If the rally continues, the bulls will try to bring the price down to the 20-day EMA ($2698). In a downtrend, bears usually try to stop the recovery at the 20-day EMA; Hence, it becomes an important level to pay attention to.
If the price deviates from the 20-day EMA down, this would indicate that sentiment remains negative and traders will continue to sell on the upside. The bears will then make another attempt to take the ETH/USDT pair below $2,159. If they succeed, the pair could drop to $2,000 and then to $1,700.
On May 9, BNB plummeted and broke through strong support at $320. The bulls tried to push the price back above the May 10 breakout level, but the bears did not back down.
BNB/USDT daily chart. Source: Trading View
The bears resumed selling on May 11 and pulled the BNB/USDT pair below the immediate support at $289. If the sellers keep the price below $289, the pair will gain momentum and fall to $250 and then to $225. Buyers are expected to build strong defense in this support zone.
Alternatively, if the price reverses from current levels, the bulls will make another attempt to push the pair above $320 and hold it. If successful, this indicates that the markets have rejected the lower levels. The pair could then rise to $350.