Bitcoin price is drifting lower, pulling altcoins to critical support levels and testing the resolve of traders who were looking for a bullish reversal.
Bitcoin’s (BTC) roof has been shifting lower in the past few days, which is a negative sign because it shows that bears are selling on every minor rally. Bitcoin’s weakness is affecting the major altcoins as most are gradually drifting lower.
Joel Kruger, a Forex strategist at LMAX, recently said:
“It would be foolish to rule out the possibility for a drop back below the June low, and we think there would be a risk in that scenario where the Bitcoin price could revisit the old record high area around $20,000.”
However, Bitcoin’s fundamentals seem to be improving. The network hashrate had taken a big knock due to China's recent crackdown on miners, but it is gradually coming back on track according to data from various on-chain sources. This shows how the network has balanced itself without the need for assistance from any external agency.
Will Bitcoin’s price follow the hashrate higher or will negative sentiment prevail? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin has been struggling to rise above the 20-day exponential moving average ($34,245). This is a negative sign as it shows that bears are aggressively defending this resistance. The price has turned down from the 20-day EMA today and the bears will now try to pull the price down to $31,000.
The 20-day EMA has started to turn down again and the relative strength index (RSI) has dropped below 45, indicating that bears are attempting to gain the upper hand. A break and close below $31,000 will be the first sign of the possible resumption of the downtrend.
The selling could intensify further if the $28,000 support cracks. That could result in long liquidation, which may pull the price down to $20,000.
Contrary to this assumption, if the price turns up from the current level and breaks above the 20-day EMA, it will indicate accumulation by the bulls. A break above the 50-day simple moving average ($35,594) and the $36,670 resistance zone will signal strength.
ETH/USDT
The buyers have been struggling to push Ether (ETH) above the 20-day EMA ($2,17) for the past three days, which indicates stiff resistance from the bears at this level.
The sellers are currently attempting to sink the ETH/USDT pair below the psychological support at $2,000. If they manage to do that, the pair may drop to $1,728.74. A break below this support could signal the resumption of the downtrend.
Conversely, if the price turns up from the current level and rises above the 20-day EMA, it will indicate that bulls are attempting to make a comeback. The buyers will then try to thrust the price above the 50-day SMA ($2,339).
This level may act as a stiff resistance but if the pair climbs above it, the next stop could be the downtrend line.
BNB/USDT
Binance Coin (BNB) has been trading between the moving averages for the past five days. This tight consolidation suggests that bulls are buying on dips to the 20-day EMA ($313) and bears are defending the 50-day SMA ($333).
However, this tight-range trading is unlikely to continue for long. If bulls drive the price above the 50-day SMA, the BNB/USDT pair could pick up momentum and rally toward $379.58. If bulls clear this hurdle, the up-move could reach $433.
On the other hand, if bears sink and sustain the price below the 20-day EMA, the pair could slide to the $276.40 to $264.26 support zone. A break below this zone could pull the price down to the critical support at $211.70.
ADA/USDT
Cardano (ADA) has been trading between the 20-day EMA ($1.37) and the horizontal support at $1.28 for the past three days. This tight consolidation suggests that both the bulls and the bears are waiting for a clear direction before placing large bets.
Both moving averages are nearly flat and the RSI is above 44, indicating an equilibrium between buyers and sellers. This advantage will tilt in favor of the bears if the $1.28 support gives way. That will clear the path for a possible drop to $1.20 and then $1.10.
On the contrary, if the price rebounds off $1.28, the bulls will try to drive the price above the 20-day EMA. If they succeed, the ADA/USDT pair could rise to the 50-day SMA ($1.47) and then to the downtrend line. A break above this resistance will be the first sign that the correction may be over.
DOGE/USDT
Dogecoin (DOGE) is struggling to stay above the $0.21 support, which suggests a lack of buying as traders are not confident of a rally. This increases the possibility of a break below $0.21.
If that happens, the DOGE/USDT pair could drop to the next important level at $0.15. A break below this support could result in panic selling. The downsloping moving averages and the RSI below 38 indicate that bears are in control.
Conversely, if the price rebounds off the current level, the bulls will try to propel the pair above the 20-day EMA. If they manage to do that, the pair may recover to the 50-day SMA ($0.28) and then to the neckline.
XRP/USDT
XRP has been trading between the 20-day EMA ($0.67) and the horizontal support at $0.59. This suggests that bears are selling on minor rallies to the 20-day EMA.
The downsloping 20-day EMA and the RSI in the negative territory suggest that the path of least resistance is to the downside. If bears sink and sustain the price below $0.59, the XRP/USDT pair could retest the critical support at $0.50.
This is an important level for the bulls because if it cracks, the pair could start the next leg of the downtrend. To negate this possibility, the bulls will have to push the price above the 20-day EMA and the horizontal resistance at $0.75.
DOT/USDT
Polkadot’s (DOT) range has shrunk further and the price is stuck between $14.50 and $16.93. The negative sign is that the price has been trading near the support of this consolidation, indicating that bulls are in no hurry to buy at the current levels.
The 20-day EMA ($16.37) is sloping down marginally and the RSI is in the negative zone, suggesting that bears have the upper hand. If bears sink the price below $14.50, the DOT/USDT pair could drop to $13.
This is an important support to watch out for because if it gives way, the pair could start the next leg of the downtrend. On the contrary, if the price rebounds off $14.50, the bulls will again try to clear the hurdle at $16.93. If they succeed, the pair could rise to the 50-day SMA ($19.59).
UNI/USDT
Uniswap (UNI) has been trading between the moving averages. The bulls are buying on dips to the 20-day EMA ($20.21) but have not been able to clear the hurdle at the 50-day SMA ($22.07). This suggests that demand dries up at higher levels.
The flat moving averages and the RSI near the midpoint suggest a balance between supply and demand. A breakout and close above the 50-day SMA will tilt this advantage in favor of the bulls. That could clear the path for an up-move to $25 and then $27.
On the other hand, if the price slips and closes below the 20-day EMA, it will signal advantage to the bears. The UNI/USDT pair could then drop to the next support at $16.93. If this support also cracks, the decline may extend to $15.
Related: Synthetix hits one-month high as SNX rallies 25% ahead of layer 2 exchange launch
BCH/USDT
Bitcoin Cash (BCH) has been stuck between the 20-day EMA ($512) and the horizontal support at $475 for the past four days. This suggests that bears are defending the 20-day EMA aggressively.
The 20-day EMA continues to slope down gradually and the RSI is below 41, indicating that bears have the upper hand. If bears sink the price below $475.69, the short-term bulls may dump their positions. That could pull the price down to $428.
If this support also cracks, the BCH/USDT pair may drop to the critical support at $370. Alternatively, if the price rebounds off $475.69, the bulls will try to propel the pair above the 20-day EMA. If they manage to do that, the pair may rise to $538.11.
A breakout and close above this resistance will be the first sign of strength. The pair could then move up to the 50-day SMA ($578) and later to $650.
LTC/USDT
Litecoin (LTC) has been facing stiff resistance at the 20-day EMA ($139) for the past few days but the positive sign is that the bulls have not allowed the bears to sustain the price below the critical support at $118.
This suggests that selling dries up at lower levels. The RSI has been trying to rise above 46 and if that happens, the bullish momentum could pick up. The bulls are currently attempting to push the price above the 20-day EMA.
If they succeed, the LTC/USDT pair could rise to the 50-day SMA ($156) followed by a rally to $180. Contrary to this assumption, if the price turns down from the current level, the pair could drop to $118. A breakdown and close below this support could signal the resumption of the next leg of the downtrend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
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