Traders are hoping for bitcoin to rally in the $30k-$35k range, but selling at the resistance level could still keep BTC and altcoins in a strong bearish trend.
Bitcoin (BTC) has rallied sharply after falling near its $24,000 strike price on May 12, suggesting some bulls have gone against the herd and bought the drop. Balances on the exchange fell by more than 24,335 bitcoins on May 11-12, according to analytics platform CryptoQuant, suggesting the bulls may have started bottom fishing.
However, macro investor Raul Pal isn’t convinced the bottom is in. In an exclusive interview with Cointelegraph, Pal said that if stock markets enter a capitulation phase, cryptocurrencies are also likely to fall before forming a bottom. He expects the current downtrend to end after the US Federal Reserve stops raising interest rates.
Cryptocurrency market daily indicators. Source: Coin360
Bear markets are known for sharp rallies that are used to allow long or short positions. Eventually, the price reverses and makes a new low. The floor is only confirmed afterwards. Therefore, investors might consider making a fluctuating accumulation rather than going all-in during a bear market.
For now, investors want to know what key overhead levels can act as resistance. Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Bitcoin rebounded from $26,700 on May 12 and formed a doji candlestick pattern. This suggests that selling pressure may be easing. The recovery gained momentum on May 13 and the bulls pushed the price above the psychological $30,000 level.
BTC/USDT daily chart. Source: Trade View
The recovery rally could face resistance around $33,000 and again at the 20-day exponential moving average (EMA) ($34,903). If the price breaks away from the upper resistance, the bears will make another attempt to sink the BTC/USDT pair below $26,700 and resume the downtrend.
If they succeed, selling could pick up and the pair could drop to $25,000 and then $21,800.
Contrary to this assumption, if the bulls halt the next decline above $28,805, it would mean that they would accumulate on the dips. This could improve the prospects for a break above the 20-day EMA. If so, the pair could rally to the 50-day simple moving average (SMA) ($40,210).
Ethereum (ETH) broke below the $2,159 support on May 11 before falling below the psychological $2,000 level on May 12. The bulls bought the drop to $1,800 which started a recovery rally.
Daily ETH/USDT chart. Source: Trade View
Buyers will now attempt to push the price above the $2,159 breakout level. If successful, the ETH/USDT pair could gain momentum and climb to the 20-day EMA ($2,554). This is an important level to watch as a break and close above it will suggest the decline may be over.
Contrary to this assumption, a reversal in price from current levels or the 20-day EMA would mean that sentiment remains negative and traders are selling near the upper resistance levels. The bears will then try to sink the pair back below $1,700.
BNB fell sharply on May 12, but the long tail of the daily candle shows bulls aggressively defending the critical support at $211. This triggered a recovery rally that reached the $350-$320 resistance zone.
BNB/USDT daily chart. Source: Trade View
If the bulls take the price above $350, it means the fall is over. After that, the recovery could reach $413. Such a move could indicate that the BNB/USDT pair could remain in a wide range from $211 to $692.
Contrary to this assumption, a break in price from the upper resistance zone would indicate that the bears are active at higher levels. The price might then gradually drop to the critical support at $211. The bears need to sink the price below this level to start a new downtrend that could reach $175 and then $150.
Ripple (XRP) plummeted to $0.33 on May 12 as buying surfaced. The bulls are attempting a rally which is likely on strong at $0.50