On Feb. 9, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler explained why the regulator cracked down on the Kraken cryptocurrency exchange, forcing it to end its cryptocurrency staking program for U.S. customers. This news may have alarmed crypto investors and they sold aggressively. Bitcoin (BTC) crashed by about 5% on February 9, and several altcoins have also followed suit.
A fresh round of selling leaves traders wondering if the bear market has resumed or if the drop should be interpreted as a buying opportunity. This question may worry investors, but at the moment the correction looks like a normal corrective phase, when cryptocurrencies return part of the profits made in January. However, it would be prudent to wait for the correction to finish and the bottom to be confirmed before considering new buying.
Former BitMEX CEO Arthur Hayes stated in a February 7 blog post that Bitcoin could continue rising in the first half of the year, but could run into trouble in the second half. Along with bitcoin and ether, Hayes is also optimistic about altcoins, but the trick, he says, is to get the timing right.
What are the important support levels for bitcoin and altcoins in the near term? Let’s examine the charts of the top 10 cryptocurrencies to find out.
Bitcoin/US dollar
Support at $22,800 cracked on February 9th and Bitcoin fell to strong support near $21,480. The absence of a strong rebound from this level suggests further deepening of the correction.
Below $21,480, selling could accelerate and BTC/USDT could drop to the moving averages. The Relative Strength Index (RSI) has slipped into negative territory, indicating that the bears are trying to gain the upper hand in the near term.
The moving averages have formed a golden cross, but the bulls need to turn the 200-day SMA ($19,722) into support if they want to stay in the game.
A strong bounce from the zone between $21,480 and the 200-day SMA suggests that the bulls are trying to form a higher low. The pair may then gradually return to $24,255. The bulls will have to overcome the $25,211 resistance to suggest that the downtrend is over.
ETH/USDT
The bears prevented Ether (ETH) from holding above the $1,680 level, which could have prompted short-term bulls to take profits.
The moving averages have completed a golden cross, indicating a potential trend reversal, but the bears are unlikely to give up without a fight. Sellers will try to take the price below the moving averages and trap aggressive bulls. If they succeed, sales may increase and a collapse to $1,200 is possible.
Instead, if the price turns up from the moving averages, this would indicate that the bulls are trying to turn the 200-day SMA ($1,442) into support. The bulls will then make another attempt to push the price above $1,680 and gain control. The ETH/USDT pair could then start heading north towards $2,000.
BNB/USDT
BNB (BNB) dived below the $318 breakout level on Feb. 9, indicating aggressive selling at higher levels. This clears the way for a possible dump to the 200-day SMA ($287).
The bulls are likely to vigorously defend the moving averages. If the price rebounds strongly from this support, BNB/USDT could form an inverted head and shoulders pattern that will end on a breakout and close above the neck line. This bullish reversal setup has a target target of $440.
On the other hand, if the price drops below the moving averages, the selling could pick up and the pair could drop to $240.
XRP/USDT
After staying above the 200-day SMA ($0.39) for several days, XRP (XRP) plummeted below support on February 9th. This suggests that the bears are trying to take charge.
The 50-day SMA ($0.38) acted as strong support on January 18 and the bulls are once again trying to defend this level. If the price bounces up from the current level and rises above the 200-day SMA, this will hint at strong demand at lower levels. Buyers will then look to break the $0.43 barrier and start moving up towards $0.51.
Conversely, if the 50-day SMA gives way, it will signal that the bears have taken the driver’s seat again. The XRP/USDT pair could then drop to $0.33.
ADA/USDT
The 200-day SMA ($0.39) has been a strong drag for Cardano (ADA). Although the bulls took the price above the resistance several times, they failed to develop strength.
The price turned lower and fell below support at $0.38 on Feb. 9. Sellers will try to pull the price up to the 50-day SMA ($0.33), which is likely to act as strong support. If the price rebounds strongly from the 50-day SMA, it would indicate that the bulls are trying to form a higher low.
On the other hand, buyers will have to break the area between the 200-day SMA and $0.42 to hint at a potential trend reversal. This could increase the likelihood of a rally above $0.44.
DOGE/USDT
Dogecoin (DOGE) fell below the $0.09 support on Feb 9 and hit the 50-day SMA of $0.08. This drop pushed the RSI into negative territory, indicating momentum has shifted in favor of the bears.
The bulls will have to do their best to defend the area between the moving averages, because if they do not, the DOGE/USDT pair could fall to important support in the $0.07 area. If the price bounces from this level, the pair may consolidate between $0.07 and $0.10 for several days.
If the price bounces strongly from the current level, this would indicate that the bulls are looking to turn the 200-day SMA ($0.08) into support. If they do, the pair could start its journey back to $0.10.
MATIC/USDT
Buyers pushed Polygon (MATIC) above the upper $1.30 resistance level on Feb. 8 and 9, but could not sustain a breakout. This shows that the bears have sold the advance above $1.30.
However, the positive sign is that the bulls have not given up much ground to the bears. This suggests that small dips attract buyers. This increases the prospects for a rally above $1.30. If this happens, MATIC/USDT could rise to $1.45 and then to $1.70.
On the contrary, if the price deviates from the upper resistance again, this will mean that the bears continue to guard the $1.30 level fiercely. The bears will have to push the price below $1.16 to make room for a retest of $1.05.
Ethereum price risks 20% correction amid SEC crackdown on crypto staking
LTC/USDT
Litecoin (LTC) fell from $102.50 on February 8th. This shows that the failure to overcome resistance may have prompted short-term traders to take profits.
The bulls will try to stop the fall at the immediate support at $88, while the bears will try to pull the LTC/USDT pair towards the 50-day SMA ($84). A deeper decline would indicate weakening momentum, which could delay the resumption of the uptrend.
If the bulls want to resume the uptrend, they will have to push the price above $98 quickly. This will signal positive sentiment, indicating that traders are buying on dips. The bulls will then try again to break the barrier at $102.50 and begin the next leg of the uptrend towards $115.
POINT/USDT
The inability of the bulls to push Polkadot (DOT) above $7.25 may have attracted selling from short-term traders, pushing the price towards the 200-day SMA ($6.33).
Buyers will try to stop the decline in the area between the moving averages and make it a higher low. If they succeed, it will mean that the DOT/USDT pair has begun to form a bottom. A break and close above $7.25 could attract further buying and open the doors to a possible upside to $10.
On the contrary, if the price falls below the 50-day SMA ($5.59), this would mean that the bears have taken control again.
AVAX/USDT
Avalanche (AVAX) bounced off the upper resistance at $22 and hit the 200-day SMA ($17.88). Buyers are expected to defend the area between the moving averages.
If the price rebounds from the current level, the bulls will make another attempt to push the price above $22. If they manage to do so, AVAX/USDT is likely to gain momentum and climb to $30.
Another possibility is that the price bounces off the moving averages but fails to rise above $22. This may lead to consolidation for several days. The bears will have to push the price below the 50-day SMA to gain the upper hand.
The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of Cryptooshala.
This article does not contain investment advice or recommendations. Every investment and trading step involves risk, and readers should do their own research when making a decision.
Credit : cointelegraph.com
