U.S. equity markets performed the worst in 2023 as worried investors dumped stocks on Feb. 21, fearing further rate hikes by the U.S. Federal Reserve.
Although the cryptocurrency markets also lost some of their gains, the decline was relatively contained. UTXO Management Senior Analyst Dylan Leclerc said Bitcoin (BTC)’s correlation with the S&P 500 index has fallen to its lowest level since late 2021.
After a sharp recovery from the lows, data from Glassnode showed that only 21% of the coins sent by long-term holders to exchanges earlier this week were unprofitable. This is a huge improvement from mid-January when 56% of the LTH coins sent to exchanges were moved at a loss.
The separation of the cryptocurrency and US stock markets is a positive sign, but traders should remain cautious. If stocks drop sharply and risk aversion develops, then the crypto rally could prove difficult to continue rising.
What are the important levels that can stop Bitcoin and altcoins from correcting? Let’s examine the charts of the top 10 cryptocurrencies to find out.
Bitcoin/US dollar
Bitcoin faced another rejection at $25,211 on Feb 21, which could prompt short-term bulls to give up and take profits. This could push the price towards the first major support on the 20-day exponential moving average ($23,364).
In an uptrend, buyers are trying to defend the 20-day EMA and then the 50-day simple moving average ($21,772). If the price bounces off the 20-day EMA, it would mean that the bulls are not waiting for a deeper correction to buy. This could improve the prospects for a rally above $25,250.
Conversely, if the price drops below the 20-day EMA, it will mean that traders are rushing to exit. This could lead to a fall to the 50-day SMA. The BTC/USDT pair may try to rebound from it again, but on the way up, the 20-day EMA can become a serious problem.
The short-term trend could turn in favor of the bears if the price closes below the key support at $21,480.
ETH/USDT
Although Ethereum (ETH) has remained above the $1,680 level since Feb 17, the bulls have not been able to overcome the overhead at $1,743. This could attract selling from short-term traders.
The price reversed down on February 21 and again fell below the $1,680 breakout level. Sellers will now try to use this advantage and push the price below the 50-day SMA ($1,550).
If they manage to do so, ETH/USDT could drop to immediate support at $1,461. The bulls are expected to defend this level vigorously because if this support breaks, the pair could drop to $1352.
The bulls will have a chance if they quickly push the price above $1680. Such a movement will indicate aggressive buying with minor drops. A break above $1,743 could start the next leg of the upside to $2,000.
BNB/USDT
Even after repeated attempts, the bulls have failed to push BNB (BNB) above the upper resistance level of $318 over the past few days. This indicates that the bears are fiercely defending the $318 level.
The bears will try to increase their edge by pushing the price below the 50-day SMA ($306). If they succeed, BNB/USDT could fall towards the next major support at $280. If the price bounces from this level, the pair could fluctuate between $318 and $280 for several days.
The flat 20-day EMA and RSI near the midpoint also indicate that the move will be range-limited in the short term. The bulls will have to push the price above $318 to gain the upper hand.
XRP/USDT
XRP (XRP) continues to trade inside a descending channel pattern. The bears prevented the bulls from pushing the price above the February 20 resistance line.
The 20-day EMA ($0.39) has leveled off and the RSI is near the center, indicating a balance between supply and demand. If the price falls below the moving averages, the bears will try to pull the price towards the crucial support at $0.36.
Alternatively, if the price rises from the current level and breaks above the channel, this gives an advantage to the bulls. The XRP/USDT pair could then try to rise to $0.43 where the bears are likely to offer tough resistance.
ADA/USDT
Cardano (ADA) is trading in a tight range between the inverse head and shoulders neckline and immediate support at $0.38.
The 20-day EMA ($0.39) has flattened out and the RSI is close to 50, indicating a state of balance between bulls and bears. If the price rises from the current level or the 50-day SMA ($0.36), the bulls will make another attempt to overcome the false obstacle.
If they do, the bullish momentum will end and ADA/USDT could rise to $0.52 and then to $0.60. Conversely, a break below the 50-day SMA could push the price towards the strong support zone between $0.32 and $0.34.
DOGE/USDT
Dogecoin (DOGE) price action has been sluggish over the past few days. This shows that both bulls and bears are cautious and do not bet big.
Flat moving averages and RSI just below the midpoint do not indicate the advantage of either side. This suggests that the DOGE/USDT pair may fluctuate between $0.10 and $0.08 for some more time.
On the other hand, a break above $0.10 could threaten the $0.11 resistance. If that happens, the pair could gain momentum and soar to $0.15. Conversely, a break below $0.08 could clear the way for a retest of solid support at $0.07.
MATIC/USDT
The long tail of the February 20 candlestick shows that the bulls bought the dip in the hope that Polygon (MATIC) would resume the uptrend, but this did not happen. The bears sold the recovery above $1.50 on Feb 21, causing a pullback.
The bulls will have to guard the $1.30 level if they want to keep the uptrend going. If the price bounces off the current level, MATIC/USDT may again try to rise to the upper resistance at $1.57. Buyers will have to overcome this hurdle to start the next leg of the uptrend.
Conversely, if the price breaks below the 20-day EMA, this means that traders can take profits. This could open the gate for a decline towards the 50-day SMA ($1.11).
How to trade bullish and bearish flag patterns?
SOL/USDT
Solana (SOL) rose above the resistance line on February 20, but the bulls were unable to hold on to the higher levels. This shows that the bears continue to defend the resistance line.
If the price continues to decline and breaks the moving averages, the bears will try to strengthen their position by dragging the SOL/USDT pair below the important support at $19.68. If they succeed, the pair could drop to $15.
On the other hand, if the price turns up from the moving averages, the bulls will make another attempt to overcome the resistance line. If the price closes above $28, the bears may give up and the pair could accelerate to $39.
POINT/USDT
Polkadot (DOT) closed above the neckline of the inverted H&S pattern on February 19, but the bulls failed to build on that momentum.
The bears sold the breakout and returned the price below the neck line on February 22. If the price fails to quickly rise above the neck line, the bulls may close their positions. This could start a deeper correction towards the $5.50 to $5.87 zone.
Instead, if the price turns up and rises above the neck line, it will mean that sentiment remains positive and traders are buying on dips. The DOT/USDT pair may gain momentum after buyers break the $8 barrier. The pair could then soar to $9.50.
SHIB/USDT
The Shiba Inu (SHIB) has been stuck in a large range between $0.000007 and $0.000018 for the past few months. The bulls tried to push the price towards the range resistance, but the bears had other plans. They stopped the rally around $0.000016.
The bulls repeatedly bought the dip to the 20-day EMA ($0.000013) but were unable to push the price above $0.000014. This indicates that traders have eased their positions on the rally. The price has fallen below the 20-day EMA again and the bears will try to push the SHIB/USDT pair down to $0.000011.
The flattening of the 20-day EMA and RSI near the midpoint suggests that the bullish momentum has waned. If the buyers want to gain control, they will have to quickly push the price above $0.000014. If they do, the pair could rise to $0.000016 and then to $0.000018.
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
