Bitcoin (BTC) price has been falling in the past few days, and traders are excited to see if this is a slight drop or if it is starting to drop further. The problem is, no one comes across a crystal ball. Analysts can only point out key levels of support that can be maintained based on historical data and evidence.
However, in the bearish market, prices tend to drop below key support levels as traders panic out of fear and sell prices. This is in line with the bull market due to FOMO trading with prices exceeding their upward targets.
Historically, March is a weak month for Bitcoin, which suggests that seasonal traders are more willing to wait and see than buy on dips. Insufficient demand may be one of the reasons the Grayscale Bitcoin Trust premium fell to a negative value over the past week.
Let’s technically analyse the charts of the top 5 cryptocurrencies that could outperform the market in the coming days.
Bitcoin has broken below the 20-day exponential moving average ($47,441), which is the first sign of another correction. The next major level of support is the 50-day simple moving average (SMA) of $41,066. The price has not fallen below this level of support since October 9, so this level is of great importance.
BTC/USDT Daily Chart. Source: TradingView
The bulls can actively defend the 50-day moving average. If the price recovers from the support level and rises above the 20-day moving average, it suggests that market sentiment is still bullish and traders buy on dips.
When the bears push the price below the 50-day moving average, it means that supply is overpowering demand and traders are making profits quickly. Such a move could bring prices down to the $38,000 intraday low on February 8th.
A break below this level of support would be a huge negative figure as the next level of support is at $32,000 and then at $28,850.
The downward sloping 20 EMA and RSI in the negative zone indicate that the bears are in control. The price is now approaching the key support level of $41,959.63.
BTC/USDT 4hrs Chart. Source: TradingView
When the price recovers from the support level, the bulls will attempt to push the price above the 20-EMA. If it succeeds, it indicates that the bulls are actively pooling down. The BTC/USD pair can then go up to 50 SMA and then to $52,000.
Binance Coin (BNB) has been in a correction phase since February 20th, indicating that traders posted gains after the sharp rise on February 19th. However, the rate of decline since Feb.25 has been gradual, indicating that traders are not panicking.
BNB/USDT Daily Chart. Source: TradingView
The price moved down to the 20-day moving average ($194) and buyers stepped in. BNB/USD could again attract buying from short-term traders. This can increase the price to $280 and then to $300.
The 20-day EMA has flattened and the RSI is just above the midpoint, indicating that there is a balance between supply and demand. However, if the short positions are falling and holding the price below the 20-day moving average, it means that supply is exceeding demand and the currency pair may be corrected to $167.3691 first and then to $118.
BNB/USDT 4hrs Chart. Source: TradingView
The 4-hour chart shows the formation of a descending triangle pattern that will be complete by the time of the collapse and close below $189. In this case, it indicates that the spike is in place and the currency pair may then fall to $118.
On the contrary, if the bulls are defending the $189 support level, it shows that market sentiment is still bullish if the bulls buy at the strong support level. Breaking and closing above the down trendline invalidate the bearish setup and can lead to a rebound to $280.
Polkadot (DOT) is on the up. The long tail on the candles on February 23rd and 26th indicates that the bulls are trying to defend the 20-day moving average ($30.49). However, the long-term recovery on February 27 shows that demand is drying up at a higher level.
DOT/USDT Daily Chart. Source: TradingView
The 20-day moving average is flattening and the relative strength index (RSI) is falling towards the centre, indicating that the upward momentum is fading. However, in the recent bull market, the DOT/USD pair found repeated support at the 20-day moving average.
If the price rebounds from the 20-day moving average and the bulls push the price above $35.6618, the pair could retest the all-time high of $42.2848. Breaking this resistance level could rebound to $50.
If the bears pull the price below the 20-day moving average and the 61.8% Fibonacci retracement level from $25.7817, that bullish view will be invalidated. When this happens, the pair can drop to the 50-day moving average ($22.33).
DOT/USDT 4hrs Chart. Source: TradingView
The 4-hour chart shows that the price is currently trading in a symmetrical triangle. If the bears can pull the price below the triangle’s support line, the pair can fall to $25.7817 and then to the target pattern of $18.70.
In the short term, the 20 EMA and RSI decline are in the negative zone, suggesting the bears have less advantage. However, if the price recovers from current levels, the bulls will attempt to push the price above the triangle. If successful, the pair can rise to $42.2848.
The bulls defended the 20-day moving average ($0.475) on Feb.26, indicating that market sentiment remains bullish and traders buy on dips. The bulls are currently trying to resume the uptrend of NEM (XEM).
XEM/USDT Daily Chart. Source: TradingView
The upside average and the RSI above 63 indicate that the path of least resistance is up. If the bulls can push the price above $0.5051, the XEM/USD pair could rebound to $0.7637. Breaking this resistance level may open the door for a move higher to $0.9607.
Contrary to this assumption, if the pair declines $0.5051, the pair may consolidate for a few days before the next trend move begins. A break and close below the 20-day moving average mean a deeper correction.
XEM/USDT 4hrs Chart. Source: TradingView
The 4-hour chart shows that the price has stayed between $0.439 and $0.63 for the past few days. Both moving averages are up slightly, and the RSI is just above mid-point, indicating that the bulls have a small advantage.
If the bulls can push the price above $0.63, the pair could rebound to $0.763 and then to $0.821. Conversely, if the price falls below the moving average, the pair may drop to the $0.439 support level. If that support is also broken, the correction may extend to $0.346 and then to $0.277.
IOTA has been in a correction phase since reaching $1.554775 on Feb. 19. Despite the large correction, the positive sign is that the bulls have successfully defended the 20-day moving average ($1.09) for the past few days.
IOTA/USDT Daily Chart. Source: TradingView
The 20-day moving average is flattening out and the RSI is trading in mid-point, indicating that there is a balance between supply and demand. In the past few days, attempts by bulls and bears to claim supremacy have failed.
If the bulls can push the price up and hold it above the overhead resistance of $1.30, the equilibrium may be beneficial to the bulls. In this case, IOTA/USD can rebound to $1.554775.
Conversely, if the short positions cause the price to drop below $0.90, it may drop to the 50-day moving average ($0.74).
IOTA/USDT 4hrs Chart. Source: TradingView
The 4-hour chart shows the formation of a symmetrical triangle that usually acts as a continuous pattern. Both moving averages are gradually falling and the RSI is in negative territory, indicating that the bears have an advantage.
The pair has broken the triangle’s support line, but the bulls are trying to halt the decline and push the price back into the triangle. If they are successful, it is recommended that you buy at a lower level. After the currency pair stays above the triangle, the bulls get an advantage.
However, if prices drop from current levels, it may indicate the beginning of a deeper correction.
The views and opinions expressed herein are only those of the author and do not necessarily reflect the views of Lighblocksnews. Every investment and trading activity is associated with risks. Hence, in making your decision, you should conduct your own research.