United States stock markets saw their worst performance of 2023 as worried investors dumped stocks on February 21 amid fears of further rate hikes by the US Federal Reserve.
Although the cryptocurrency markets also gave back part of the gains, the decline was comparatively muted. Dylan LeClair, a senior analyst at UTXO Management, said Bitcoin’s (BTC) correlation with the S&P 500 Index has fallen to its lowest level since late 2021.
After rebounding sharply from the lows, Glassnode data showed that just 21% of coins sent to the exchange by long-term holders earlier this week were trading at a loss. That’s a huge improvement from mid-January, when 56% of LTH coins sent to exchanges were moving at a loss.
Daily performance of the cryptocurrency market. Source: Coin360
The decoupling of the crypto and US stock markets is a positive sign, but traders need to remain cautious. If stocks turn sharply lower and risk-off sentiment develops, the crypto rally could find it difficult to extend its gains.
What are the key levels that could halt the correction in bitcoin and altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin faced another rejection at $25,211 on Feb. 21, which may have tempted short-term bulls to give up and book gains. That could pull the price to the first major support at the 20-day exponential moving average ($23,364).
BTC/USDT daily chart. Source: TradingView
In an uptrend, buyers are attempting to protect the 20-day EMA and then the 50-day simple moving average ($21,772). If the price recovers from the 20-day EMA, it will indicate that the bulls will not wait for a deeper correction to buy. That could increase the prospects of a rally above $25,250.
On the contrary, when the price breaks below the 20-day EMA, it indicates that traders are rushing for the exit. This could lead to a drop to the 50-day SMA. The BTC/USDT pair might try to recover from this again, but on the upside, the 20-day EMA might pose a strong challenge.
The short-term trend could tip in the bears’ favor if the price closes below the crucial $21,480 support.
ETH/USDT
Although Ether (ETH) has remained above $1,680 since February 17, the bulls have failed to clear the overhead barrier at $1,743. That may have attracted selling from short-term traders.
ETH/USDT daily chart. Source: TradingView
The price turned down on February 21 and fell back below the breakout level of $1,680. The sellers will now try to build on this advantage and push the price below the 50-day SMA ($1,550).
If they succeed, the ETH/USDT pair could plummet to the immediate support at $1,461. The bulls are expected to vigorously defend this level as if this support gives way, the pair could drop to $1,352.
The bulls have a chance if they quickly push the price back above $1,680. Such a move suggests aggressive buying on minor dips. A break above $1,743 could start the next leg of the upside to $2,000.
BNB/USDT
Even after repeated attempts, the bulls failed to propel BNB (BNB) above the $318 overhead resistance for the past few days. This suggests that the bears are fiercely defending the $318 level.
BNB/USDT daily chart. Source: TradingView
The bears will try to increase their advantage by sinking the price below the 50-day SMA ($306). If successful, the BNB/USDT pair could drop towards the next major support at $280. If the price bounces off this level, the pair could oscillate between $318 and $280 for a few days.
The 20-day flat EMA and the RSI near the midpoint also suggest short-term range-bound action. The bulls need to push the price above $318 to gain the upper hand.
XRP/USDT
XRP (XRP) continues to trade within the descending channel pattern. The bears thwarted the bulls’ efforts to push the price above the resistance line on February 20th.
XRP/USDT daily chart. Source: TradingView
The 20-day EMA ($0.39) has flattened out and the RSI is near the midpoint, indicating an equilibrium between supply and demand. If the price breaks below the moving averages, the bears will attempt to drag the price to the crucial $0.36 support.
Alternatively, if the price surges up from the current level and breaks above the channel, it will signal an advantage for the bulls. The XRP/USDT pair could then attempt a rally to $0.43 where the bears are likely to provide stiff resistance.
ADA/USDT
Cardano (ADA) was trading in a tight range between the neckline of the inverse head and shoulders pattern and the immediate support at $0.38.
ADA/USDT daily chart. Source: TradingView
The 20-day EMA ($0.39) has flattened out and the RSI is near 50, indicating an equilibrium state between bulls and bears. If the price scales up from the current level or the 50-day SMA ($0.36), the bulls will make another attempt to clear the overhead hurdle.
If they do, the bullish setup will complete and the ADA/USDT pair could rally to $0.52 and then $0.60. Conversely, a break below the 50-day SMA could pull the price into the strong support zone between $0.32 and $0.34.
DOGE/USDT
Dogecoin (DOGE) price action has been sluggish for the past few days. This shows that both the bulls and bears are cautious and not making big bets.
DOGE/USDT daily chart. Source: TradingView
The flat moving averages and the RSI just below the middle do not suggest an advantage for either party. This suggests that the DOGE/USDT pair could oscillate between $0.10 and $0.08 for a while longer.
On the upside, a break above $0.10 could put the $0.11 resistance at risk of collapsing. In that case, the pair could gain momentum and climb towards $0.15. Conversely, a break below $0.08 could pave the way for a retest of the solid support at $0.07.
MATIC/USDT
The long tail on the February 20th candlestick shows that the bulls bought the pullback hoping that Polygon (MATIC) will resume its uptrend, but that did not happen. The bears sold the rally above $1.50 on Feb. 21, triggering a pullback.
MATIC/USDT daily chart. Source: TradingView
The bulls need to guard the $1.30 level if they want to keep the uptrend intact. If the price recovers from the current levels, the MATIC/USDT pair might make another attempt to rise towards the overhead resistance at $1.57. The buyers must overcome this obstacle to start the next leg of the uptrend.
Conversely, if the price breaks below the 20-day EMA, it suggests that traders may book profits. That could open the gates for a decline towards the 50-day SMA ($1.11).
Related: How to trade bull and bear flag patterns?
SOL/USDT
Solana (SOL) surged above the resistance line on February 20th but the bulls failed to hold the higher levels. This shows that bears continue to defend the resistance line.
SOL/USDT daily chart. Source: TradingView
If the price continues lower and breaks below the moving averages, the bears will attempt to strengthen their position by dragging the SOL/USDT pair below the key support at $19.68. If they make it, the pair could drop to $15.
On the other hand, if the price moves up from the moving averages, the bulls will make another attempt to clear the resistance line. If the price closes above $28, the bears might give up and the pair could then accelerate towards $39.
DOT/USDT
Polkadot (DOT) closed above the H&S inverse pattern neckline on Feb. 19, but the bulls failed to build on this momentum.
DOT/USDT daily chart. Source: TradingView
The bears sold the breakout and pulled the price back below the neckline on February 22nd. If the price fails to quickly climb back above the neckline, the bulls could exit their positions. That could start a deeper correction towards the $5.50 – $5.87 zone.
If the price is instead pointing up and climbing above the neckline, it suggests that sentiment remains positive and traders are buying the dips. The DOT/USDT pair might gain momentum after the buyers cleared the $8 barrier. The pair could then rally to $9.50.
SHIB/USDT
Shiba Inu (SHIB) has been stuck in a wide range between $0.000007 and $0.000018 for the past few months. The bulls tried to push the price down to the range resistance, but the bears had other plans. They stopped the rally near $0.000016.
SHIB/USDT daily chart. Source: TradingView
The bulls repeatedly bought the decline to the 20-day EMA ($0.000013) but failed to push the price above $0.000014. This indicates that traders have been easing their positions on rallies. The price has slipped below the 20-day EMA again and the bears will attempt to sink the SHIB/USDT pair to $0.000011.
The flattening 20-day EMA and the RSI near the midpoint suggest that the bullish momentum has weakened. If buyers want to take control, they need to push the price above $0.000014 quickly. If they do, the pair could rally to $0.000016 and then $0.000018.
The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
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