Most of the major altcoins, including Bitcoin and DOGE, are selling in rallies. According to crypto analyst Rakesh Upadhyay, this is proof that investor sentiment continues to be negative in the short term. What are the key support levels bulls need to hold to start the next rally in bitcoin and altcoins? The analyst examines the charts of the top 10 cryptocurrencies to find out.
An overview of the cryptocurrency market
U.S. stocks are struggling to recover amid reports that debt ceiling talks are promising and a debt default could be avoided. However, the same enthusiasm is not present in the cryptocurrency markets. Bitcoin declined below the $27,000 support on May 17. This showed that buyers are having a hard time sustaining relief rallies. Institutional investors seem to be booking their profits due to macro uncertainty. CoinShares’ Digital Asset Fund Flows Report shows a total outflow of $200 million from digital asset investment products over the past four weeks.
While the short-term picture remains negative, the chart structure in Bitcoin is intact. Bitcoin has corrected about 15% from its local high of $31,000, which it reached on April 14. But it remains above $25,000. This suggests that the weakness appears to be a corrective phase in the bullish move.
BTC, ETH, BNB, XRP and ADA analysis
Bitcoin (BTC): Bears sell on rallies
Bitcoin’s recovery stalled on May 15 at the 20-day exponential moving average (EMA) of $27,694. This shows that sentiment remains negative and bears are selling on rallies.
The bears will attempt to push the price below the $26,500 support. It is possible that this will open the doors for a drop to $25,250. This remains the key level to consider. Because a break below can accelerate the sale. BTC is likely to drop as low as $20,000 later. Instead, if the price rebounds from $25,250, it will indicate that the bulls are trying to defend the neckline of an inverse head and shoulders pattern. Starting a new rally is a difficult task for the bulls. Because the recovery is likely to face selling at the moving averages and again at the resistance line.
Ethereum (ETH): Bears are fiercely holding this level
Ether turned down from the 20-day EMA ($1,844) on May 17. This showed that the bears maintained the level fiercely.
The price action of the last few days has formed a falling wedge pattern. Therefore, it is possible for ETH to slide to the support line. This is an important level to pay attention to. Because if the bears pull the price below the wedge, it is possible for ETH to drop as low as $1,600. Alternatively, if the price rebounds from the support line, the bulls will make another attempt to push BTC above the 20-day EMA. If they succeed, ETH is likely to rise to the resistance line of the wedge.
Binance Coin (BNB): Bears are active at higher levels
BNB turned down from the 20-day EMA ($316) on May 15. This indicates that the bears are active at higher levels.
Sellers will again try to push the price towards the strong support at $300. This is an important level for the bulls to defend. Because if they fail to do so, it is possible for BNB to extend the decline to $280. Conversely, if the price bounces off $300, it will signal demand lower. BNB is likely to rise back to the moving averages later. Buyers will need to break through this hurdle to increase the likelihood of a rally towards the resistance line.
Ripple (XRP): Bears sell relief rallies
After trading in a tight range around $0.43 for several days, XRP broke above the overhead resistance on May 16.
The bulls continued their buying and pushed the price above the 20-day EMA ($0.44) on May 17. However, the long wick on the day’s candlestick indicates that the bears are selling their relief rally to the downtrend line. This indicates that XRP will oscillate between the downtrend line and $0.40 for a while. Buying could accelerate after the bulls hold the price above the 50-day simple moving average (SMA) at $0.48. This could also pave the way for a potential rally to the overhead region of $0.54 to $0.58.
Cardano (ADA): Bears are fiercely defending this level
The bulls tried to push ADA above the $0.38 resistance on May 15 and May 17. However, the long wick on the candlesticks shows that the bears are fiercely defending this level.
The 20-day EMA ($0.37) is bearish. Also, its relative strength index (RSI) is close to 43. This shows that the bears have a slight advantage. Sellers will then try to push the price below the uptrend line. If they do, ADA is likely to drop as low as $0.30. Conversely, if the price turns up from the current level or uptrend line and rises above $0.38, it will indicate that the bulls are back in the driver’s seat. ADA is likely to rise to $0.42 later, which will again act as a strong barrier.
DOGE, MATIC, SOL, DOT and LTC analysis
Dogecoin (DOGE): Demand is drying up at higher levels
DOGE finds buyers at $0.07. However, the lack of a strong bounce indicates that demand is drying up at higher levels.
The bears are likely to fiercely defend the zone between the downtrend line and the 50-day SMA ($0.08). If the price turns down from this zone, the bears will make another attempt to push the DOGE price below $0.07. Another possibility is for DOGE price to bounce off the current level and break above the 50-day SMA. If this happens, it will indicate the start of a strong relief rally. It is possible for DOGE price to rise to $0.10 and later to $0.11.
Polygon (MATIC): There is indecision between buyers and sellers
MATIC has been stuck in a tight range between $0.82 and $0.88 for the past few days. This indicates indecision between buyers and sellers.
The downward sloping moving averages and the RSI near the oversold zone suggest that the bears are in control. Intensification of selling is possible if the price drops below $0.82. Thus, a drop to $0.69 is possible for MATIC. On the upside, the bulls are likely to face stiff resistance in the region between the 20-day EMA ($0.91) and $0.94. A break above this zone will be the first indication that selling pressure is easing.
Solana (SOL): Bears maintain this level
Buyers tried to push SOL above the downtrend line on May 15. However, the long wick on the candlestick indicates that the bears are holding the level.
The price is stuck between the downtrend line and the horizontal support at $19.85. However, this narrow range of trading is unlikely to continue for long. The bears will try to push the price below $19.85. It will also challenge the $18.70 support. On the other hand, the bulls will try to push and sustain the price above the 50-day SMA ($21.83) to signal the start of a sustained recovery. SOL is likely to rise to $24 and then $26 later.
Polkadot (DOT): No aggressive intake
The DOT has been consolidating near the key $5.15 support for the past few days. The lack of a strong rebound indicates that there is no aggressive buying at current levels.
The falling 20-day EMA ($5.54) and the RSI in the negative territory suggest that the bears are in command. If the $5.15 support is broken, selling momentum is possible. Also, the DOT is likely to drop to $4.50 and then to $4.22. Buyers will need to push the price above the 20-day EMA to indicate a reversal. DOT is likely to rise to the 50-day SMA ($6) later. It may also attempt a rally towards the bearish trend line later on. A break above this resistance will signal that the tide is turning in favor of the bulls.
Litecoin (LTC): Bulls continue to resist
LTC broke above the 20-day EMA ($85) on May 15. It was also followed by another upside move above the 50-day SMA ($89) on May 16.
LTC is approaching $96, where the bears are expected to make a strong defense. If the bulls do not back off much from this level, the probability of a move above $96 increases. It is possible for LTC to retest the overhead level at $106 later. Instead, if the price drops sharply from $96 and dips below the moving averages, it will indicate that the bears are holding their ground. In this case, it is possible for LTC to fluctuate between $75 and $96 for a few more days.
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