6 - 10 minute read
Bitcoin (BTC) is on track to finish the week with a significant fall of around 9%. This suggests that some traders may be booking profits in fear of a resumption of the downtrend. Analysts expect Bitcoin to reach the $26,600 to $25,000 zone, where buying interest may pick up.
When an asset emerges from a bear market, it tries to form higher lows on the way up. These levels act as strong supports during subsequent corrections. The current pullback could end up forming a higher floor for Bitcoin, which may act as a launch pad for the next rally.
If long-term investors believe that a bottom has been made, then panicking and selling on every corrective phase is not a good strategy. Rather, every dip could be an opportunity to build a portfolio.
The correction in Bitcoin has pulled several altcoins lower. Only a handful of major cryptocurrencies are holding out and looking strong on the charts. Let’s study the charts of five cryptocurrencies that may outperform on the way up.
Bitcoin Price Analysis
Buyers are trying to arrest Bitcoin’s correction at the 50-day simple moving average ($26,983) but the shallow bounce suggests that the bears are not willing to give up.
The 20-day exponential moving average ($28,606) has started to turn down and the relative strength index (RSI) is in the negative zone signaling that bears have a slight edge. The selling could pick up further if the 50-day SMA cracks.
The BTC/USDT pair could then tumble to the breakout level of $25,250. This is an important level to keep an eye on because if this support crumbles, the pair may plunge to $20,000.
Buyers will have to push and sustain the price above the 20-day EMA to signal a comeback. That could attract buying and push the price toward the $31,000 to $32,500 resistance zone.
The pair bounced off $27,125 and reached the 20-EMA. This is the first hurdle that the bulls need to cross to start a strong recovery. The pair may then reach the 50-SMA where the bears will again try to mount a strong defense.
If the price turns down from the current level and slides below $27,125, it will suggest that the sentiment remains negative and traders are selling on every minor rally. That will increase the likelihood of a fall to $26,500 and eventually to $25,250.
BNB Price Analysis
BNB (BNB) is witnessing a tough battle between the bulls and the bears. Sellers are active above $338 while the bulls are fiercely defending the 50-day SMA ($316).
The BNB/USDT pair rebounded off the 50-day SMA on April 21 and the bulls are attempting to clear the hurdle at $338. If they succeed, it will enhance the prospects of a rally above $346. The pair may then soar toward $400. The gradually upsloping 20-day EMA ($325) and the RSI in the positive territory indicate that bulls have a slight edge.
If bears want to prevent the up-move, they will have to yank the price back below the 50-day SMA. That could accelerate selling and sink the pair to $300 and thereafter toward $280.
The 4-hour chart shows that the price rebounded off the support near $316 and has reached the 50-SMA. If bulls overcome this obstacle, the pair will try to rise to $338 and subsequently to $346. A break above this level could witness a pick-up in bullish momentum.
The first support to watch on the downside is the 20-EMA. If this support gives way, it will suggest that the pair may consolidate between $315 and $335 for some time. The advantage will tilt in favor of the bears if the $315 support gives way.
Cardano Price Analysis
Cardano (ADA) turned down and plunged back below the neckline of the inverse H&S pattern on April 20. This indicates that the bears are trying to trap the aggressive bulls. A minor positive in favor of the buyers is that they are trying to guard the 50-day SMA ($0.37).
The 20-day EMA ($0.40) has turned down and the RSI is just below the midpoint, indicating that sellers are trying to seize control. If the price plummets below the 50-day SMA, it will suggest that the bears are in the driver’s seat. The ADA/USDT pair could then collapse to $0.30.
The Bottom Line
The cryptocurrency market has witnessed a correction in the last few weeks, and several altcoins have been pulled lower. However, a few major cryptocurrencies are still holding strong on the charts and may outperform on the way up. Bitcoin, the largest cryptocurrency, is currently undergoing a correction and could tumble to $25,250 if its support level of $25,000 is breached. On the other hand, if buyers push and sustain the price above the 20-day EMA, it could signal a comeback and attract buying, pushing the price toward the $31,000 to $32,500 resistance zone.
In the case of BNB, buyers are attempting to clear the hurdle at $338, and if they succeed, the prospects of a rally above $346 enhance. Similarly, Cardano (ADA) has turned down and plunged below the neckline of the inverse H&S pattern, indicating that the bears are trying to trap the aggressive bulls. However, the buyers are trying to guard the 50-day SMA ($0.37), which could prevent further downside.
Traders should keep an eye on the support and resistance levels of each cryptocurrency and look for opportunities to build their portfolios during dips. It is also important to have a long-term investment strategy and not panic and sell on every corrective phase.