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 reddish color. Profit-booking is also occurring for Bitcoin (BTC), and other major cryptocurrencies, following the recent rise.
Investors should also be aware of the Federal Open Market Committee meeting (FOMC) on March 16. On March 2, Fed Chair Jerome Powell stated that rates will likely rise this month.
Brian Coulton, chief economist at Fitch Ratings, expects that core inflation will remain high in 2022. The Fed will increase the “Fed funds rate to 3% by 2022.”
Everyday cryptocurrency market performance. Source: Coin360
David Lifchitz, ExoAlpha’s managing partner and chief investment officers, stated that Bitcoin could remain soft for the short-term because a Fed rate hike technically “strengthens”, and thus “weakens”, Bitcoin. He doesn’t expect any drastic changes to 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. This indicates that bears are protecting the overhead resistance of $45,821. The moving averages are an important support that you should be watching for.
Daily chart of BTC/USDT Source: TradingView
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 ($40,899) as well as the relative strength index near the midpoint indicate a few days worth of range-bound activity.
Although Ether (ETH), broke and closed above its 50-day simple moving mean ($2,838) on February 28, the bears held firm at the psychological level of $3,000. Short-term traders may have sold, which could have pushed Ether (ETH) below the moving averages.
Daily chart of ETH/USDT Source: TradingView
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.
Binance Coin (BNB), although bulls drove it above the 50-day SMA ($403) they were unable to sustain higher levels. This indicates that bears are fighting for the level.
Daily chart BNB/USDT TradingView
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.
The Ripple (XRP), which was down from the downtrendline, fell to the 50-day SMA ($0.73), indicating that bears are not giving up yet.
Daily chart of XRP/USDT Source: TradingView
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.
Daily chart of LUNA/USDT Source: TradingView
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 the 50 day SMA ($103). This could have led to short-term traders profit-booking. This brought the price back within the channel.
Daily chart of SOL/USDT Source: TradingView
The SOL/USDT pair may drop to $81 if bears pull 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. The $1 breakdown level was where the relief rally stopped, which indicates that bears are protecting this level.
Daily chart ADA/USDT Source: TradingView
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
Avalanche’s (AVAX), has turned down from its downtrend line in the descending channel for the 4th time. This indicates that traders are selling rallies above this level.
Daily chart of AVAX/USDT Source: TradingView
While the bears try to keep the price below moving averages, the bulls buy the dips and attempt to keep the AVAX/USDT pairs above the 20-day EMA ($80). The balance between supply/demand is evident in the RSI close to the midpoint and the flat 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 strong resistance levels.
Daily chart of DOT/USDT Source: TradingView
The bears have brought the price below the $20-day EMA ($18), and they will now attempt to challenge the $16-$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 (DOGE)’s relief rally stalled at $0.13 ($20-day EMA), indicating 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.
Daily chart of DOGE/USDT Source: TradingView
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.
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.