Last week, traders significantly decreased their exposure to risky assets in the wake of the Silicon Valley Bank’s (SVB) failure. Bitcoin (BTC) saw a decline of approximately 9%, while the S&P 500 Index plunged by 4.55%. The collapse of SVB had widespread effects in the crypto space: there were reports that $3.3 billion of Circle’s $40 billion USDC reserves were held at SVB, which caused USDC to lose its peg to the U.S. dollar. Since then, USDC has climbed above $0.96. This has created short-term uncertainty for investors, who are closely monitoring the situation to see if other regional banks across the U.S. will be affected.
During times of uncertainty, it is best for investors to wait on the sidelines. However, if a domino effect does not occur following SVB’s failure, select cryptocurrencies may start to recover. The cryptocurrencies highlighted in this article are all trading above the 200-day simple moving average (SMA), a key level for long-term investors to determine the asset’s bull or bear phase.
Let’s take a closer look at Bitcoin and the four altcoins that may outperform if the market sees a recovery over the next few days.
Bitcoin (BTC)
Bitcoin has corrected back to the 200-day SMA, which is at $20,389. Buyers are likely to defend this level with all their might, as a break below it could intensify selling. On the way up, the 20-day exponential moving average (EMA), currently at $22,042, is likely to be a major hurdle. If the price turns down sharply from the 20-day EMA, the BTC/USDT pair may retest the support at the 200-day SMA. If that level cracks, the pair may slide to $18,400 and then to $16,300.
If bulls want to prevent a decline, they will have to drive the price above the 20-day EMA. If they manage to do that, the pair may pick up momentum and soar toward the overhead resistance at $25,250.
The 4-hour chart shows that the bulls are attempting to start a recovery from $19,550. However, the bears are aggressively defending the 20-EMA. If the price turns down from the current level, the bears will try to sink the pair below $19,950. If they succeed, the pair could fall to $18,400. If the price turns up and breaks above the 20-EMA, it will suggest that the short-term selling pressure may be reducing, which could start a recovery to $21,480 where the bears will again pose a strong challenge. If this level is scaled, the pair may reach $22,800.
Ether (ETH)
Ether (ETH) briefly dipped below the 200-day SMA ($1,421) on March 10. However, the long tail on the day’s candlestick shows solid buying at lower levels. The recovery is currently facing resistance near $1,461. If the price turns down from this level, it will signal that bears are selling on a shallow bounce, increasing the likelihood of a drop below $1,352. The ETH/USDT pair might then slump to $1,100.
If bulls want to prevent the decline, they will have to drive the price above the 20-day EMA ($1,548). If they do that, the pair could rise to $1,743 where the bears may again erect a strong barrier. A break above this level will open the doors for a possible rise to $2,000.
Polygon (MATIC)
Polygon (MATIC) corrected sharply from $1.56 on Feb. 18 and reached the 200-day SMA ($0.94) on March 10. The long tail on the day’s candlestick shows that the bulls are fiercely defending the level. The bulls will try to push the price to the 20-day EMA ($1.15), where the bears are likely to mount a strong defense. If the price turns down from this level, it will suggest that the sentiment remains negative and traders are selling on rallies. If that occurs, the MATIC/USDT pair could slump to $0.69.
If buyers propel the price above the 20-day EMA, it will suggest that the bulls are back in the driver’s seat. The pair could then rise to the overhead resistance at $1.30.
TONcoin (TON)
TONcoin (TON) is still way above the 200-day SMA, which suggests that traders are not rushing to exit. The TON/USDT pair has formed a symmetrical triangle pattern near the local high. The price action inside the triangle is random and volatile. Typically, the triangle acts as a continuation pattern, which means the trend that was in force before the formation of the setup resumes.
If buyers kick the price above the resistance line of the triangle, the pair may start a move toward $2.90. Conversely, if the price continues to drop and plummets below the triangle and the 200-day SMA ($1.90), it will suggest that the bears are in command. That might pull the price toward $1.30, indicating that the triangle behaved as a reversal setup.
OKB (OKB)
OKB (OKB) is in a corrective phase, but a minor positive in favor of the bulls is that it is still far above its 200-day SMA ($26). The next support on the downside is $36.13, which is the 50% Fibonacci retracement level. The bulls are likely to defend this zone with all their might. If the price turns up from this zone, the OKB/USDT pair may rise to the 20-day EMA ($45.48). If the price slips below $30.76, it will suggest that traders are rushing to exit, and the pair may plunge to the 200-day SMA.
In conclusion, while traders are currently cautious, select cryptocurrencies trading above the 200-day SMA may start a recovery if the market shows signs of improvement. However, investors should always conduct their own research when making a decision, as every investment move involves risk.
