The S&P 500 index, Bitcoin (BTC), and the whole crypto sector corrected on April 6, which highlights their close correlation.
Institutional investors are not halting their purchases despite the weakness. This suggests that they are bullish for the long-term. Terra used the dip in order to purchase an additional 5,040 Bitcoins, bringing its total holdings up to 35,768 Bitcoins.
Terra wasn’t the only one involved in this venture. MicroStrategy, which has the largest Bitcoin reserve, increased its holdings through its subsidiary MacroStrategy. The business intelligence company now holds 129,218 Bitcoin after the latest purchase.
Everyday cryptocurrency market performance. Source: Coin360
The inflows into the Canadian Bitcoin exchange-traded funds is another sign of Bitcoin’s strong demand. Glassnode data shows that the funds increased their holdings to an all time high of 69.052 Bitcoin. This is an increase of 6,594 Bitcoin since January.
Are Bitcoin and altcoins undergoing a deeper correction? Or will lower levels encourage buying? Let’s look at the charts for the top 10 cryptocurrencies to see what happens.
After remaining within a narrow range between the 200 day simple moving average ($48,240 and $45,000 over the past few days the bears made their move. They pulled the price below its 20-day exponential moving mean (EMA) of $44,567.
Daily chart of BTC/USDT Source: TradingView
The relative strength index has dropped to the midpoint, while the 20-day EMA has flattened out. This indicates that bullish momentum may be waning. The bulls will attempt to push BTC/USDT above the 200 day SMA if the price recovers from the 50-day SMA (41,752).
If the bears drop below the 50-day SMA, it could signal that the pair is likely to stay within the ascending channel. The pair could then slowly fall towards the $37,000 support.
Short-term traders may have profit-booked because the bulls failed to maintain Ether’s price above the 200-day SMA ($3,487). This has pushed the price to the critical support of the 20-day EMA (€3,223).
Daily chart of ETH/USDT Source: TradingView
Bulls will buy on dips if the price bounces off the 20-day EMA. The bulls will attempt to push the price higher than the 200-day SMA. If they succeed, then the ETH/USDT pairing could begin its northward march towards $4,150, where the bears will mount a strong defense.
Contrary to what you might think, if bears lower the price below the 20 day EMA, selling could pick up momentum, and the pair may fall to the 50-day SMA ($2,907).
BNB failed to surpass the 200-day SMA ($468) again on April 5. The candlestick’s long wick showed that bears are fighting for the 200-day SMA.
Daily chart BNB/USDT TradingView
The BNB/USDT price pair has fallen to the $20-day EMA ($424). The bears now plan to try to keep the price below the 20 day EMA. The pair may extend its fall to the 50-day SMA (398). If the level is strong, the pair could rebound from it and remain range bound between the 200-day SMAs and the 50-day SMAs.
If the price bounces off the 20-day EMA the bulls will try to drive the pair higher than the 200-day SMA, and attempt to challenge the resistance at 500.
Solana’s recovery (SOL), has been stalled since April 2, and the price is now below the breakout level of $122. Bulls are expected to vigorously defend the 20-day EMA ($113).
Daily chart of SOL/USDT Source: TradingView
The strong rebound from the 20-day EMA will indicate that sentiment is positive and traders are buying dips. The bulls will attempt to push the price higher than the overhead hurdle at 200-day SMA ($149).
A break and close below 20-day EMA could indicate that bullish momentum is weakening. The pair could drop to the 50 day SMA ($96). The pair could then stay between the 200-day SMAs and 50-day SMAs if there is a strong rebound.
Ripple (XRP), which fell below the 20-day EMA ($0.81), slipped below April 5. Today’s selling was continued and the price fell below the 50-day SMA ($0.78).
Daily chart of XRP/USDT Source: TradingView
The RSI is in the negative territory, and the 20-day EMA has begun to slide down. This suggests that bears may have a slight advantage. The XRP/USDT price could fall to $0.70 if the price falls below the 50-day SMA. This is an important level that bulls must defend as a fall could reach $0.60.
The bulls will try to push the pair higher than the 200-day SMA ($0.89) if the price rises from its current level.
Short-term traders may have been tempted to take profits by the failure of bears to lift Cardano (ADA), above the overhead resistance at 1.26. This has caused the price to fall below the $20-day EMA ($1.09).
Daily chart ADA/USDT Source: TradingView
The pair could fall to the 50-day SMA ($0.96) if the price falls below the 20-day EMA. While the bulls will likely defend this level vigorously, if the bears prevail, the ADA/USDT pairing could fall to $0.74. The pair could consolidate between $0.74-$1.26 for some time if it makes a strong rebound from this level.
The bulls could also attempt to push the pair higher than the overhead resistance if the price rises. The ADA/USDT pairing could rally to the 200 day SMA ($1.47) if they succeed.
Terra’s LUNA token was in a strong uptrend, but the Doji candlestick pattern of April 5 warned that the bullish momentum might be weakening. The negative divergence in the RSI suggested that bulls might be losing their grip.
Daily chart of LUNA/USDT Source: TradingView
On April 6, the uncertainty surrounding the Doji candlestick pattern settled to the downside. The bears will now attempt to pull the price below the $20-day EMA ($102). This is an important level that bulls must defend as a strong rebound from it will indicate that sentiment remains bullish and traders continue to buy on dips.
If the price falls below the 20-day EMA then the selling could accelerate as traders rush for the exit. This could lead to the LUNA/USDT soaring to the 50-day SMA ($86).
Related: Bitcoin drops below $44K in April as a trader warns that’something is wrong’ with BTC
Bulls bought the dip to the 20 day EMA ($89), but they couldn’t push Avalanche above the overhead resistance of $98. This indicates that the overhead resistance is being defended aggressively by bears.
Daily chart of AVAX/USDT Source: TradingView
The 20-day EMA has been flattening and the RSI is in the negative zone. This indicates that bears may have a slight edge. The AVAX/USDT pair may drop to $65. If the price falls below the 50-day SMA ($82), This level could be breached and the AVAX/USDT pair could drop to $65.
If the price rises from its current level, bulls will attempt to climb higher than the overhead zone of $98-100.
Polkadot, (DOT), recovered from the 20-day EMA ($21), but the bulls couldn’t overcome the $23 barrier. This could have attracted short-term traders who wanted to book profits.
Daily chart of DOT/USDT Source: TradingView
The DOT/USDT paired plunged below the 20 day EMA on April 6, and the RSI moved into negative territory. This indicates that bulls are losing control. The 50-day SMA (19) could be the next stop. This level is likely to be defended by bulls. However, if support breaks down, the fall could reach $16.
A strong rebound from the 50-day SMA could indicate that the pair could consolidate between $19 to $23 for a few more days. To signal a possible new uptrend, the bulls must push the price higher than $23.
Dogecoin (DOGE), soared above $0.17 overhead resistance on April 5, but bulls couldn’t clear the hurdle at SMA 200 ($0.18). This could have led to profit-booking by short-term bulls and selling of aggressive bears that resulted in a sharp reversal onApril 6.
Daily chart of DOGE/USDT Source: TradingView
The DOGE/USDT currency pair will likely retest the $20 EMA ($0.14). Bulls will continue to buy dips if the price bounces off of this level. The overhead hurdle at 200-day SMA will be cleared by buyers.
If the price falls below the 20-day EMA, this positive outlook will be invalidated. This could lead to a drop of $0.12. For a few days, the pair could remain between $0.10- $0.18.
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.