Bitcoin and altcoins continue to bounce off underlying support levels, increasing the likelihood of a dramatic decline.
Bitcoin (BTC) fell dramatically on April 21, retaining a close association with the US equities markets, which reversed course when US Federal Reserve Chairman Jerome Powell signalled that a 50 basis point rate hike in May was “on the table.” On April 22, the selling resumed as investors sold riskier assets in anticipation of a more aggressive approach by central banks to rein in soaring inflation.
Veteran trader Peter Brandt recently tweeted that the Nasdaq 100 (NDX) was retracing its steps before falling in 2000.
The cryptocurrencies’ sluggish price action and the weakened macro environment have resulted in a decline in Google searches for the terms Bitcoin and Ethereum. Even cryptocurrency trading volumes have been falling for some time now. According to Blockchain.com, total crypto exchange volume fell to $165.8 billion (R 2.6tn)on April 19, its lowest level since October 2020.
Could Bitcoin and altcoins continue their downward trend, or is a relief rally in order?
If history repeats itself, the NDX may have a significant correction. This could be detrimental to the cryptocurrency markets in the short term, given the strong correlation between Bitcoin and the NDX.
On April 21, Bitcoin broke over the 50-day simple moving average (SMA) ($41,977) R 652k , but the bulls were unable to sustain the higher levels, as evidenced by the day’s candlestick’s extended wick. From $42,976 (R 668k), the price reversed and settled below the 20-day exponential moving average (EMA) ($41,478)R 644 086k.
On April 22, the selling resumed, and the bears are seeking to bring the price down to the ascending channel pattern’s support line. The downward-sloping 20-day exponential moving average (EMA) and a negative relative strength index (RSI) indicate that bears have the upper hand.
If the price falls below the channel’s support line, selling might accelerate and the BTC/USDT pair could fall to $33,000( R 512 436).
If, on the other hand, the price reverses from the current level or the support line, this indicates that bulls are actively purchasing at lower levels.
To signal strength, the bulls will need to push and keep the price over $43,000( R 667 72O). The pair could subsequently rally to the 200-day SMA ($47,965)R 744 818 and then test the channel’s resistance line.
ETH/USDT Numerous attempts to break out of this narrow range have failed, implying that bulls are buying on falls and bears are selling on rallies. The downward-sloping 20-day EMA and the negative RSI offer sellers a little advantage. If the price falls below $2,883( R44 768), the chance of a drop to the ascending triangle pattern’s uptrend line increases.
At this level, the bulls are likely to stage a vigorous defence. If the price bounces off the uptrend line, buyers will attempt to push the ETH/USDT pair above the 20-day exponential moving average.
If they are successful, the pair may rally to the 200-day simple moving average ($3,486)R 54 131. If the price breaks and closes above this level, the ascending triangle pattern will be completed, indicating a possible trend change.
Bears are selling on rallies near the overhead resistance level of $445(R 6 910), as seen by the lengthy wick on the April 20 candlestick. BNB continued to decline and fell below the 50-day simple moving average ($408)R 6 336 on April 21. If bears manage to push the price below $391( R 6071), selling will likely intensify and the BNB/USDT pair will likely fall below solid support at $350( R5 435). If the price successfully rebounds from this level, it suggests that the pair may remain range-bound between $350( R5 435) and the 200-day SMA ($471)R 7 313 for some time longer.
If, on the other hand, the price bounces off the solid support zone between the 50-day SMA ($408) R 6 336 and $391(R 6 071), bulls will attempt to push the pair to $445( R6 910) and then to the 200-day SMA. A break and closing above this level could indicate the start of a new trend.
For the last few days, Ripple (XRP) has been trapped in a range between $0.69 (R10.71) and $0.91(R 14.13). Although the price recovered from the range support on April 12, bulls were unable to break over the 50-day SMA ($0.78)R 12.11, indicating a lack of demand at higher levels. The bears’ next objective will be to push the XRP/USDT pair below the $0.69(R10.71) support level. If they succeed, the pair may fall to $0.62(R9.68) and then to $0.54(R8.39). The 20-day exponential moving average ($0.76)R 11.80 has begun to decline and the RSI has entered the negative territory, indicating that the path of least resistance is to the downside.
Alternatively, if the price strongly recovers from $0.69(R10.71), this indicates that the bulls are accumulating. The buyers will then attempt to break through the overhead resistance level of $0.80(R12.42) and push the pair to $0.91(R14.13).
Solana (SOL) broke over the 20-day exponential moving average ($105)R 1 630 on April 19, but the bulls were unable to hold the gains. On April 20, the bears dragged the price back below the 20-day exponential moving average. The purchasers will now seek to push the LUNA/USDT pair beyond $100(R1 553) for the second time in a row. If that occurs, bullish momentum may accelerate and the pair may climb toward the pair’s all-time high of $119(R1 848). At this point, the bears are expected to launch a formidable resistance.
On the other hand, if the price breaks below the support at $88 (R1 367) from either the current level or the overhead resistance at $100(R1 553), the chances of a break below the support at $88(R1 367) increase. If the price remains below this level for an extended period of time, the pair may fall below solid support at $75(R1 165). A break and closure below the 200-day SMA ($68)R1 005 could indicate the start of a new trend.
Avalanche (AVAX) had been trading between the 20-day EMA ($80) and the uptrend line for the past few days. Typically, such trading within a narrow range culminates in a sharp trending move. Bears have the advantage, as indicated by the down sloping 20-day EMA and the RSI in the negative region. If the price remains below the uptrend line for an extended period of time, the developing ascending triangle pattern will become invalid. This might send the AVAX/USDT pair down to the pair’s strong support level of $65(R1 009).
Alternatively, if the pair continues to increase from its current level, buyers will aim to push the price above the moving averages once more. If they succeed, the pair might rally to the $99(R1 537 to $104 (R1 615) overhead resistance zone.
Dogecoin (DOGE) has been range-bound in a downtrend. The price fell from $0.15 (R2.33)on April 20 to the 50-day simple moving average ($0.13)R 2.02 on April 21. This indicates that demand begins to dwindle at increasing levels.
Retesting a support level repeatedly tends to erode it. If the price falls below the 50-day simple moving average, bears will aim to bring the DOGE/USDT pair to firm support at $0.12(R1.86).
If the price falls below the 50-day simple moving average, bears will aim to bring the DOGE/USDT pair to firm support at $0.12(R1.86). Bulls are expected to vigorously defend this level, but if it breaks, the fall might extend to the key level at $0.10 (R1.55).
On the other hand, if the price bounces off the 50-day SMA, bulls will attempt to push the pair over the $0.15 (R2.33) overhead resistance. If they succeed, the pair may surge to the overhead resistance level of $0.17(R2.64).
For several days, Polkadot (DOT) has been range-bound inside a broad range between $16 (R248.45) and $23(R357.15). On April 20 and 21, bulls pushed the market over the 50-day SMA ($19), but were unable to sustain the gains. This indicates that bears are profiting from rallies. If the price breaks through the immediate support level of $18 (R 280), the DOT/USDT pair may fall to $17( R263.98). The progressively declining 20-day exponential moving average ($19) R295.04 and the RSI just below the midpoint suggest a modest seller’s advantage.
Alternatively, if bulls successfully push the market over the 50-day SMA, the pair may attempt a rally to the $23( R357) overhead barrier. The bulls must overcome this obstacle in order to signal the start of a fresh uptrend.