As traders continue to sell high-risk assets in response to geopolitical conditions, the equity markets in Europe as well as the United States are turning a red sea. After the recent rise in Bitcoin ( BTC), profit booking is also taking place for several other major cryptocurrencies.
The Federal Open Market Committee’s (FOMC), March 16 meeting could also be a reason investors are on edge. On March 2, Jerome Powell, Fed hair, stated that the central banking is likely to raise rates this monday.
Chief economist at Fitch Ratings Brian Coulton predicts core inflation to remain high through 2022, and that the Fed will increase the “Fed rate to 3% by 2022.”
David Lifchitz, ExoAlpha’s managing partner and chief investor officer, stated that Bitcoin could remain soft for the short-term because a Fed rate hike technically “strengthens the U.S dollar” and thus “weakens Bitcoin.” He doesn’t expect to have a significant impact on Bitcoin.
In the short-term, there are many uncertainties that could limit the rally to the upside. Let’s look at the charts for the top 10 cryptocurrencies to identify the crucial support and resistance levels.
Bitcoin fell from $45,400 at March 2 to $45,821, indicating that bears are protecting the overhead resistance of $45,821. The moving averages are an important support that you should be watching for.
The price rebounding off the moving averages will indicate that bulls are buying dips. The bulls will attempt to push the price higher than the overhead resistance zone of $45,821 as well as the resistance line for the ascending channel. The BTC/USDT pair may rally to $52,088 if they succeed.
Contrary to popular belief, if the price falls below the moving averages it will indicate that traders are selling at higher levels. This could lead to a drop to $37,000, and then to the support level of the channel.
The flattish 20 day exponential moving average (EMA), ($40,899) as well as the relative strength index near the midpoint indicate a few days worth of range-bound activity.
The Ether ( Ethereum) closed above the 50-day SMA ($2,838) on February 28th, but the bears held the psychological level of $3,000. Short-term traders may have sold, which could have pushed the price below the moving medians.
The support line of the symmetrical triangular triangle could cause the ETH/USDT pair to drop. This support is crucial for bulls to protect as selling could intensify if it cracks. The downtrend could resume if the price remains below the triangle. The price could drop to $2,000. This is where the bulls will likely provide support.
If the price moves above the support line, bulls will push the pair higher than the overhead resistance at $3,000 to challenge the resistance line in the triangle.
Bulls drove BNB (above the 50-day SMA of $403) but they couldn’t sustain higher levels. This indicates that bears are fighting for the highest level.
Sellers are trying to keep the price below the 20 day EMA ($391) and sink it. If they succeed, the BNB/USDT exchange pair could fall towards the strong support of $350.
If the price bounces off its current level, there is a possibility for a break above the 50-day SMA. This could lead to a rally towards the overhead resistance at $445.
The flattish 20 day EMA and the RSI close to the midpoint indicate a range-bound action in near term.
Ripple ( XRP), which was down from the downtrendline, dropped to the 50 day SMA ($0.73), indicating that bears are not giving up yet.
The buyers will attempt to push the XRP/USDT price above the downtrend line if the price recovers from the 50-day SMA. If they succeed, buying momentum will pick up and the pair could rally towards $0.91.
The bears will try to bring the pair down to $0.62 if the price falls below the 50-day SMA. The bulls are not likely to have an advantage over the bears due to flattish moving averages or the RSI at the midpoint.
Terra’s LUNA token failed to hold above $94, but that is a positive sign. In the last three days, the bulls have bought the dip down to $86 several times.
A tight consolidation close to an overhead resistance is usually a sign that there is strength. This resolves to the upside in an uptrend. The LUNA/USDT pairing could challenge $103.01 if bulls continue to push the price higher than $94.
If the pair breaks and closes above this level, it will signify the resumption or continuation of the uptrend. The pair could rally to $110. Buyers may be able to take advantage of the rising 20-day EMA (72), and the RSI close to the overbought area.
If the price falls below $86, this positive outlook will be invalidated in the short-term. This could push the price up to $80.
Solana ( SOL), rose above the resistance channel on March 2, but bulls couldn’t overcome the barrier at 50-day SMA ($103). This could have led to short-term traders profit-booking. This brought the price back within the channel.
The SOL/USDT pair may drop to $81. If bears pull back and keep the price below the $20-day EMA ($95), This level is important to watch because bulls have successfully defended the price twice in the last few days.
If the price recovers from $81, the pair may rise to the 50 day SMA, and then remain range-bound between these levels for a few more days.
The first sign that the downtrend is ending may be a break or close above the 50 day SMA. The pair could rise to $122. If bears pull the pair down to $81, it could fall to $66.
When strong supports are broken during strong downtrends they often flip to resistance. This is exactly what happened with Cardano ( ADA). The $1 breakdown level was where the relief rally stopped, which indicates that bears are protecting this level.
The bears will attempt to push the price below $0.82 as support and challenge the February 24 intraday low of $0.74. The ADA/USDT pairing could also break if this level is breached. This would extend the downtrend to $0.68.
Contrary to what you might think, bulls will attempt to overcome the $1 hurdle if the price rebounded below $0.82. If they succeed, this will be the first sign the sellers are losing their grip. To indicate a possible trend shift, the bulls must push the pair higher than the channel.
Related: WAVES faces a ‘deathcross’ plunge following price rises of 88% in six consecutive days
The fourth time that Avalanche ( AVAX ) has fallen below the downtrend line in the descending channel, it is now. This indicates that traders are selling rallies at this level.
While the bears try to keep the price below moving averages, the bulls buy the dips and attempt to maintain AVAX/USDT above the 20-day EMA ($80). The balance between supply/demand is evident in the RSI close to the midpoint and the flattish 20 day EMA.
The pair could rise again to the downtrend line if bulls push it above the 20-day EMA. To signal a change in trend, the bulls must clear this hurdle. Alternativly, the pair could fall to $64 if it breaks below $71.
The failure of Polkadot ( DOT), to surpass the 50-day SMA ($19), indicates that sentiment is still negative and traders are buying rallies to stiff resistance levels.
The bears have pulled down the price below the $20-day EMA ($18), and will now attempt to challenge the $16 to $14 strong support zone. The bulls will defend this zone with the same vigor that they did on previous occasions.
The DOT/USDT currency pair could rise to the moving-averages if the price bounces off the zone. The first sign that the downtrend is ending could be a break or close above the 50 day SMA.
A break and close below this zone will re-establish the downtrend. The pair could drop to $10 psychological support.
Dogecoin’s relief rally ( DOGE ) stalled at the $20 EMA ($0.13). This indicates that bears are not willing to give up on their advantage. The bears are trying pull the price towards $0.12, which is strong support.
Retests of support levels tend to weaken them, which suggests that bulls cannot sustain higher levels. The DOGE/USDT pair may plummet to $0.10 if the price falls below $0.12.
The RSI in negative territory and the downsloping moving Averages indicate that the path of least resistance is towards the downside. If bulls push the pair higher than the 50-day SMA ($0.14), this negative view will be invalidated in the short-term.
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph. Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.
Market data are provided by HitBTC Exchange.