While the S&P 500 is near its all time high, Bitcoin (BTC), has fallen 30% from its all time high of $69,000. Despite the steep drop, Bitcoin is still up 63% year-to-date and outperforms the S&P 500 which is up around 30% in 2021.
The price of gold, which is used to hedge against inflation, has fallen by around 7%. Arcane Research stated in its report that Bitcoins performance in high inflationary environments shows that it is an “excellent inflation hedge.”
Everyday cryptocurrency market performance. Source: Coin360
Raoul Pal, CEO of Real Vision, stated in an interview with Vlad at The Stakeborg Talks (Vlad from The Stakeborg Talks) that recent Bitcoin selling could have been caused by institutional investors making profits. However, he believes that this selling is coming to an end.
Peter Brandt, a veteran trader, believes panic selling has yet to occur, as it is known that this can signal bottoms.
Is Bitcoin likely to continue its decline, or could it make a strong recovery and surpass $50,000 within the next few days. Lets look at the charts of the 10 top cryptocurrencies to see if we can find out.
Bitcoin rose above the overhead resistance of $51,936.33 Dec. 27, but the candlesticks long wick shows that traders were selling this increase with vigor. Dec. 28 saw more selling and the price fell below the 20-day exponentially moving average (EMA), ($49,558).
Daily chart of BTC/USDT Source: TradingView
Although the price fell below the SMA (200-day simple moving average) on Dec. 29, the candlesticks long tail shows that bulls are trying to stop the decline. The bulls will attempt to push the BTC/USDT price pair towards the overhead resistance of $51,936.33 if the price rises above the SMA for 200 days.
The selling could increase if the price falls below the 200-day EMA. The relative strength index (RSI), which is lower than 42, has begun to decline over the past 20 days. This indicates that bears have taken control. The pair could fall to the strong support zone of $42,000-40,000. If the $45,456 support breaks, it could crash to $45,000 to $40,000.
Short-term traders may have been selling Ether (ETH) because it failed to sustain above the $20-day EMA ($4,011) The price fell sharply to $3,643.73 on Dec. 28, and is now close to the support of $3,643.73.
Daily chart of ETH/USDT Source: TradingView
If the price recovers from the support, the bulls may make another attempt to push the ETH/USDT pairs above the 20-day EMA. The corrective phase could end if the price breaks and closes above $4,200. The pair could rally to $4.488 before regaining its all-time high of $4,868.
The downsloping 20 day EMA and the RSI at the negative zone suggest that the downside is the path of least resistance. The pair could fall to the $2,643.73 support if it breaks. Although this level is a strong support, it could cause the pair to plummet to $2,000.
Binance Coin (BNB), which soared above its 20-day EMA ($546) Dec. 27, but the bulls couldnt sustain higher levels. On Dec. 28, the price fell below the 20-day EMA and then turned around.
Daily chart BNB/USDT TradingView
The bears will attempt to lower the price below $500, the strong support. If they succeed, it could trigger a move down to the SMA (200-day) ($444), where bulls will likely defend the level vigorously.
Contrary to popular belief, if the price rises from the current level and the support at $500 it will indicate that bulls will continue to buy dips. The correction could be ended if the price breaks above $575. The pair could rally first to $617, then to the overhead resistance zone of $669.30 to $691.80.
Solanas recovery (SOL), halted at $204.75 Dec. 27, and fell below the 20-day EMA ($185 Dec. 28. This indicates that bears are continuing to sell during rallies.
Daily chart of SOL/USDT Source: TradingView
Now, the bears will try to capitalize on their advantage and bring the price down below $167.88. The SOL/USDT pair may drop to $148.04 if this support breaks. The 20-day EMA remains flattish, but the RSI is below 44. This indicates that bears are trying to get the upper hand.
If the price rises above $204.75, this negative outlook will be invalidated in the short-term. This will open the way for a rally towards the resistance line in the falling wedge pattern. The bulls will be back in control if the wedge breaks.
Cardano (ADA), which was $1.59 on December 27, has dropped to $1.59 today and is now at the 20-day EMA ($1.39). The bulls will try to push the price towards the resistance line in the descending channel if the price recovers from the current level.
Daily chart ADA/USDT Source: TradingView
The 20-day EMA is flattish and the RSI close to the midpoint indicate a balance between demand and supply. If the channel closes above the channel, it will signal that the downtrend is over. The bulls will attempt to push the price towards $2.47 overhead resistance.
However, if the price remains below the 20-day EMA it will indicate that bears are continuing to sell on rallies. The ADA/USDT currency pair could drop to $1.18, which is a strong support zone. The pair could fall to $1 if this support breaks.
Short-term traders may have sold Ripple (XRP), after the bulls failed to push Ripple ($0.94) above the 50 day SMA ($0.94) Dec. 27. This caused the price to fall below the 20-day EMA (0.89) and support at $0.85.
Daily chart of XRP/USDT Source: TradingView
The 20-day EMA is down, and the RSI has dipped below the neutral zone. This indicates that bears have a slight advantage. The XRP/USDT pair may drop to $0.74 if the price holds below $0.85.
If the price rises from its current level and breaks the moving averages it will indicate that lower levels are drawing strong bulls buying. The price could rise to $1. An inverse head-and-shoulders pattern is one that ends with a break above the target level. It has a target of $1.25.
Terras LUNA token dropped to $103.60 Dec. 27, and fell to $83.83, the 38.2% Fibonacci retracement point. The bulls will likely attempt to halt the correction between $83.83 & the 20-day EMA (80).
Daily chart of LUNA/USDT Source: TradingView
This zone is expected to rebound strongly and signal that bullish sentiment continues. Traders are not waiting for a severe correction to buy.
The bulls will attempt to push the price up to $103.60. Breaking and closing above this resistance could signal the resumption or continuation of the uptrend. The upside target is $135.26, then $150.
If the price falls below the 20-day EMA, this positive outlook will be negated. This could bring the price to $71.61, the 61.8% Fibonacci level of retracement.
Similar: A fair comparison In 2021, Ethereum growth surpasses Bitcoin
Avalanche (AVAX), which bounced off the 20-day EMA ($108 on Dec. 26 but fell to $120.96 on December 27. This indicates that bears are selling at higher levels.
Daily chart of AVAX/USDT Source: TradingView
The AVAX/USDT currency pair fell below the 20-day EMA Dec. 28 and then rebounded. The next stop for bears is $98 if they can keep the price below that level. Breaking and closing below this support may open the doors to a drop to $75.50.
However, if bulls push price above the 20-day EMA then the pair may rally to the downtrend. If the price breaks and closes above this resistance, it could signal that the correction is over. The pair could rise first to $130, then test the all-time high of $147.
Polkadot, (DOT), was pushed above the overhead resistance at $31.49 Dec. 27, but the candlesticks long wick suggests that sellers will be willing to sell at higher levels.
Daily chart of DOT/USDT Source: TradingView
A bull trap could have been used to catch aggressive buyers by making the failed breakout look like a bull market. This could have led to long liquidation and a drop in the price below the moving ranges.
Both moving averages are flat, and the RSI is just above the midpoint. This indicates a balance between supply/demand.
The pair could rally to $31.49 if bulls push it above the moving averages. Buyers could benefit from a break or close above this level. The pair could rally to $39.35, and then to $43.56.
A break or close to the $25-22.66 support zone will signal that bears are in control.
Dogecoin (DOGE), which had fallen below the overhead resistance of $0.19, plunged below the 20-day EMA ($0.18) Dec. 28. This indicates that bears are defending the overhead resistance level.
Daily chart of DOGE/USDT Source: TradingView
The DOGE/USDT currency pair could drop to $0.15. This is an important level for bulls to defend. The pair could stay between $0.15- $0.19 for the next few trading days if the price bounces off of this support.
To signal a strong relief rally, the bulls must push the price higher than $0.19.
Contrarily, bears that sink below $0.15 will indicate that the downtrend is back. This could lead to the pair dropping to $0.13, and then to psychological support at $0.10.
Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.
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I am a technology and gaming writer by profession. I love NFT’s and play to earn gaming such as Axie Infinity. I love writing about anything on the blockchain, especially gaming and entertainment. I often sing, write or draw to portray my feelings. When it comes to my free time or you can say ‘ME-TIME’, I love to play with my cat, sleep an extra hour, or play my favorite video games.