Todays sell-off in crypto and U.S equity markets was due to fears that Evergrande, the Chinese property giant, could collapse not only for China but also for other markets.
When sentiment is bearish traders will abandon positions they consider risky and opt for safer-haven trades. This could explain the dramatic fall in Bitcoin (BTC), and other major altcoins, today.
Everyday cryptocurrency market performance. Source: Coin360
Bybt data shows that Bitcoin stored in Binance wallets increased by 29,717 Bitcoin over the past 30 days. The history suggests that a decrease in Bitcoins value has been caused by an increase in Binances Bitcoin balance.
Binances Bitcoin balance grew from 99,700 BTC to 347,590 BTC by June 26, from April 20th. Bitcoins value plunged from $57,000 to $30,000.
The question now is whether the sell-off will deepen or if lower levels will attract more aggressive buying by traders. Lets look at the charts for the top 10 cryptocurrencies to see what happens.
After bears drove the price below its moving averages, Bitcoins selling was exacerbated. The price action over the last few days has created a head-and-shoulders pattern, which will eventually collapse and close below the neckline.
Daily chart of BTC/USDT Source: TradingView
The moving averages look like they are about to cross over into bearish territory. The relative strength index (RSI), has fallen below 41 and could drop to $37,332.70. This indicates that bears have control. The BTC/USDT pair may drop to $37.332.70 if the price continues to fall below the neckline. This would then lead to the pattern target at $32,423.05.
Contrary to popular belief, bulls will attempt to push the price towards $50,000 if the price bounces off the neckline. The bears will defend the 20-day exponential moving mean ($47,014) vigorously.
This resistance will be broken if the price falls below it. It is a sign that sentiment is turning negative and traders are selling rallies. A break above $48,843.20 will signal strength.
Ether (ETH), bounced off support at $3,377.89 Sept. 18, but the bulls couldnt sustain the price above its 20-day EMA ($3,402). This means that traders have closed positions at higher levels.
Daily chart of ETH/USDT Source: TradingView
The ETH/USDT pair will form a bearish head-and-shoulders pattern if the price falls below $3,000 This setup has a target price of $1,972.12.
The 20-day EMA is beginning to slow down, and the RSI is at 42. This indicates that the path to the downside is the most likely.
However, bulls could defend the $3,000 level vigorously and the pair could rise again towards the overhead resistance at 3,377.89. This level is likely to be defended by the bears, but if bulls overcome it, it could signal that the correction may have ended.
Although the bulls held the 50-day SMA ($2.31) for the last two weeks, they were unable to build on their recent rebound. Cardano (ADA), a result of sustained selling, fell below the 50-day SMA Sept. 19.
Daily chart ADA/USDT Source: TradingView
Today saw a sharp increase in selling and the ADA/USDT currency pair fell to $1.94. This level is a strong indicator that bulls are buying dips.
If buyers continue to bounce, the pair may gradually climb towards the overhead resistance at 2.47. Relief rallies to the 20 day EMA ($2.45) will likely cause bears to sell. The pair could drop back to $1.94 if the price breaks through this resistance.
An indication that sellers are losing control is a break or close above the 20 day EMA.
Binance Coin (BNB), which was below the 50-day SMA ($422) Sept. 17, failed to recover the level. This indicates that bears are selling at every minor rally.
Daily chart BNB/USDT TradingView
Todays selling momentum picked up and the BNB/USDT currency pair fell close to $340. This is an important level that the bulls must defend as a break below could lead to a fall to $300 or $250.
The moving averages have made a bearish crossover, and the RSI has moved into the negative zone. This indicates that bears have the upper hand.
The pair could reach the 20-day EMA if the price recovers from $340. This level will likely act as a strong resistance. To signal that correction is over, bulls will need to push the price higher than $422.80.
XRP traded near $1.07 during the last few days, but the inability of bulls to push it above the 20-day EMA ($1.09) revealed that bears were buying rallies.
Daily chart of XRP/USDT Source: TradingView
After the bears pulled, the selling intensified and the price closed below the 50-day SMA ($1.08) Sept. 19. The moving averages are at the edge of a bearish crossover, and the RSI is in the negative zone. This indicates that bears have taken control.
The XRP/USDT exchange rate could fall to $0.75 if the price remains below $0.95. The 20-day EMA will likely be a strong resistance point for any relief rally. Bulls will attempt a comeback if they break above $1.13 and close above it.
The Sept. 17 candlesticks long tail shows that bulls bought aggressively the dip below the 20 day EMA ($148). The bulls failed to sustain Solana (SOL), above $170, after the strong bounce on Sept. 18.
Daily chart of SOL/USDT Source: TradingView
This could have led to bulls shorting aggressive bears while taking profit from them. The 20-day EMA is flattened and the RSI is near the midpoint. This indicates that bulls are losing control.
The SOL/USDT price could fall to $123.42 Fibonacci retracement at 61.8% if it remains below the 20-day EMA. If the price breaks or closes below this support, it could signal that the uptrend is over.
To signal the end to the corrective phase, the bulls must push the price to $171.47.
The 20-day EMA ($32.12 on Sept. 18) was followed by an inside day candlestick pattern on September 19. This was a sign of indecision between the bears and bulls.
Daily chart of DOT/USDT Source: TradingView
Today saw the market move below the 20-day EMA, resolving this uncertainty. Selling picked up momentum and fell to the critical support at SMA 50 ($27.29). This support is important for bulls, as they have successfully defended it since Sept. 7.
The bears will likely sell on rallies above the 20-day EMA if the DOT/USDT pairing recovers from the current level. If the price drops below this level, that will indicate that sentiment has turned negative. This will increase the chances of a break below 50-day SMA. If the price rises above $34, this negative view will be invalidated.
Related: Ethereum forms a double top ETH price loses 12.5% amid Evergrande contagion fears
Dogecoin (DOGE), tight trading range over the past few days was resolved today by bears pulling the price to $0.21.
Daily chart of DOGE/USDT Source: TradingView
The bears have control of the market, as evidenced by the falling 20-day EMA ($0.25) or the RSI close to the oversold territory. The DOGE/USDT pair may slide to $0.15 if they can lower the price and hold it below $0.21.
The bulls will attempt to push the pair higher than the 20-day EMA if the price recovers from its current level. The pair may rise to the downtrend line if they succeed. If the price moves below the 20-day EMA it could increase the chances of a break below $0.21.
On Sept. 18, the bulls tried to recover but couldnt push Uniswap, (UNI), above the 20-day EMA ($25.09). This demonstrated that the bears are aggressively defending their 20-day EMA.
Daily chart of UNI/USDT Source: TradingView
Todays UNI/USDT price fell further and bears pulled it below $21 today. The pair could see panic selling and fall to $18 if it falls below this support.
Bears have an advantage because of the RSI in negative territory and the 20-day EMA that is downwardly moving. If the price rises above the downtrend, this negative view will be invalidated. This will signal strong accumulation at lower levels.
Long wicks on the Sept. 18- and Sept. 19 candlesticks showed traders booking higher profits. Today saw selling intensify and Avalanche (AVAX), a 20-day EMA, dropped to $55.16
Daily chart of AVAX/USDT Source: TradingView
The strong rebound from the 20-day EMA indicates that sentiment is still positive and traders are accumulating on dips. The bulls will attempt to push AVAX/USDT towards the record $76.27 if the price remains above $60.04.
If the price falls below the 20-day EMA and the current level, bearish momentum may pick up. Traders could rush to the exit. This could bring the price down to $48, then to the 50 day SMA ($38.56), where buyers might step in to stop the slide.
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.