Bitcoin (BTC) has experienced a sharp fall of around 9% over the past week, leading some traders to book profits in fear of a resumption of the downtrend. Analysts expect Bitcoin to reach the $26,600–$25,000 zone, where buying interest may pick up. However, long-term investors who believe that a bottom has been made may see every dip as an opportunity to build a portfolio.
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.
The correction in Bitcoin has also pulled several altcoins lower, with only a handful of major cryptocurrencies holding out and looking strong on the charts. Let’s study the charts of five cryptocurrencies that may outperform on the way up.
Buyers are trying to arrest Bitcoin’s correction at the 50-day simple moving average (SMA) ($26,983), but the shallow bounce suggests that the bears are not willing to give up. The 20-day exponential moving average (EMA) ($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–$32,500 resistance zone.
The pair bounced off $27,125 and reached the 20-day EMA. This is the first hurdle that the bulls need to cross to start a strong recovery. The pair may then reach the 50-day 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 (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.
Cardano’s ADA (ADA) turned down and plunged back below the neckline of the inverse head-and-shoulders (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.
Conversely, if buyers want to retain their supremacy, they will have to quickly thrust the price back above the neckline. If they manage to do that, the pair could witness solid buying. The pair may then surge to $0.46.
Monero (XMR) turned down from the neckline of the developing inverse H&S pattern, but the sharp recovery from lower levels indicates aggressive buying on dips.
Buyers have pushed the price back above the 20-day EMA ($157) and will again try to challenge the neckline. If this level is scaled, it will complete the bullish setup, clearing the path for a potential rise to $185 and thereafter to the pattern target of $199.
If the price turns down from the current level or the neckline, it will signal that bears are selling on rallies. A break and close below $149 will signal that bears have seized control. The XMR/USDT pair may then slump to $145 and later to $140.
Toncoin (TON) has formed a bearish descending triangle pattern, but a positive sign in favor of the buyers is that the price has been trading near the resistance line of the triangle for the past few days.
The bulls will try to drive and sustain the price above the resistance line, which will invalidate the bearish setup. A breakdown of a negative pattern usually results in an up-move because aggressive traders who may have gone short in anticipation of a decline cover their positions. Additionally, bullish traders who have been sitting on the sidelines due to the negative setup jump in to buy. Above the resistance line, the TON/USDT pair could rally to $2.64 and thereafter to $2.90.
This positive view will invalidate in the near term if the price turns down and breaks below $2.20.
Overall, investors and traders should conduct their own research before making any investment or trading decisions. While the above analysis offers insights into the current market trends, it is important to always consider the risk involved and make decisions based on individual financial goals and risk tolerance.