Major altcoins, including Bitcoin and MATIC, are witnessing a fierce battle between bulls and bears. This indicates indecision in the near term. What are the critical support levels in Bitcoin and altcoins that can stop future dips? Crypto analyst Rakesh Upadhyay examines the charts of the top 10 cryptocurrencies to find out.
An overview of the cryptocurrency market
cryptocoin.comAs you follow, US Federal Reserve Chairman Jerome Powell said on February 7 that “in the fight against inflation, think about inflation has begun, but it is still at a very early stage. He also warned that strong data could be met with further rate hikes. While his comments were mixed, it triggered purchases in the S&P 500 and Bitcoin on Feb. 7 as investors speculated that the Fed may soon end its rate hike campaign.
Bitcoin’s strong rally in January and signs of its falling inflation seem to have reversed investor sentiment. CoinShares data from January 30 shows institutional investors pumping $117 million into digital investment products. This brings total assets managed to $28 billion, a sharp 43% increase from November lows.
While sentiment seems to have reversed, bear markets seldom end without trailing a bottom upside. To confirm a potential trend change, the price must form a higher low followed by a higher high. Now it’s time for analysis…
BTC, ETH, BNB, XRP and ADA analysis
Bitcoin (BTC): Bulls bought this drop
Bitcoin dropped below $22,800 on Feb. 6, but the bulls bought it. This started a recovery above $23,000 on Feb. 7, but buyers failed to sustain higher.
It will not be easy for the bulls as the bears will look for a strong challenge on each rise towards $24,000. While the upward sloping moving averages are to the advantage for buyers, the negative divergence in the relative strength index (RSI) indicates that the bullish momentum is slowing. Sellers are trying to trap the aggressive bulls by pushing the price below the 20-day exponential moving average ($22,568). If they manage to do so, BTC could return some of its recent gains and drop to $21,480. Buyers will likely defend the region between $21,480 and the psychologically critical $20,000.
Ethereum (ETH): Bears active
ETH rebounded from the 20-day EMA ($1,600) on Feb. 7. The bulls tried to consolidate their positions by pulling the price above the $1,680 resistance on February 8 but were unable to sustain the breakout.
This shows that the bears are active near the $1,680 resistance. Sellers will try to push ETH below the 20-day EMA. If they are successful, ETH could drop to $1,500. Sellers will have to break this support to gain control. Conversely, if the price rises and rises above $1,700, ETH could signal the start of the next leg of a bull trend. There is a minor resistance at $1,800. However, the potential for a rally to $2,000 increases if the bulls do not allow the price to drop below $1,680.
Binance Coin (BNB): Bulls, successfully defended
The bulls successfully defended the breakout of $318 on February 6, which is a positive sign as it shows that buyers are not waiting for a deeper correction to buy. The bulls will now try to push BNB above $338.
If they can achieve this, the potential to rise to $360 increases. The bears are expected to put up a strong defense at this level, but if this hurdle is cleared, BNB could extend the upward move to $400. Conversely, if the price drops and dips below $318, it will signal that the bears are being sold on rallies. This could trap aggressive bulls and increase the risk of falling to the 50-day simple moving average ($284).
Ripple (XRP): Bears don’t let bulls go
The bulls pushed XRP above the 20-day EMA ($0.40) on Feb. 7 but are struggling to sustain higher levels. This shows that the bears are not ready to let the bulls do what they want.
The bears will try to pull XRP to the strong support near $0.36. This is an important level to follow. Because a drop below it will show that XRP can extend its consolidation between $0.30 and $0.42 for a few more days. Trading within a range is often random and volatile. If the bulls want to take control, they will have to push the price above the $0.42 to $0.44 resistance zone. After this zone is cleared, there is no major resistance up to $0.51, so the pair could cover this distance in a short time.
Cardano (ADA): Lower levels attract buyers
ADA bounced off the immediate support at $0.38 on Feb. 7, showing that lower levels are attracting buyers.
While the risk from negative divergence in the RSI remains, the upward sloping moving averages suggest that the bulls have the upper hand. There is a minor resistance at $0.41 but if this level is crossed, ADA could touch $0.44. The bears will again try to stop the upward movement at this level. Contrary to this assumption, if the price drops and dips below the 20-day EMA, it will indicate that the bulls are tired. The bears will then try to push the price down to the 50-day SMA ($0.32).
DOGE, MATIC, DOT, LTC and AVAX analysis
Dogecoin (DOGE): There is a lack of aggressive buying
DOGE rebounded from the 20-day EMA ($0.09) on Feb. 7, but the shallow rise showed a lack of aggressive buying at lower levels. The price fell on February 8 and is testing the support at the 20-day EMA.
Should this level collapse, sellers will try to strengthen their positions by pulling the DOGE 50-day SMA ($0.08). This is an important support for the bulls’ defense because if it gives way, selling could accelerate and DOGE could drop to the critical support at $0.07. On the upside, the bulls will need to pierce the $0.10-$0.11 resistance zone to clear the path to $0.15 for a possible rally.
Polygon (MATIC): Strong demand at lower levels
MATIC rose from $1.17 on Feb. 6, which is a positive sign. Because traders did not wait for the price to touch the 20-day EMA ($1.13) before buying.
Negative divergence in RSI remained intact, but solid rebound on February 7 indicates strong demand at lower levels. This increases the likelihood of a break above $1.30 for MATIC. If this level scales, MATIC price is likely to pick up momentum and rally to $1.45, then skyrocket to $1.70. The long wick on the February 8 candlestick shows that the bears are fiercely defending the $1.30 level. Sellers will now try to strengthen their position by pulling the MATIC price below the 20-day EMA.
Litecoin (LTC): The bull trend remains intact
In a bull trend, bulls usually buy the drop to the 20-day EMA as it presents a low-risk trading opportunity. Litecoin bounced off the 20-day EMA ($94) on February 7, signaling that the uptrend is intact.
There is a minor hurdle at $102.50 but if that hurdle is cleared, buyers will try to push LTC to $107. This level could again act as a roadblock, but if the buyers do not allow the price to drop below the 20-day EMA, the probability of a rise to $115 increases. Alternatively, if the bears want to gain the upper hand, they will have to push the price below the 20-day EMA. If they manage to do this, several stop losses may be triggered. LTC could then initiate a deeper correction at the 50-day SMA ($83).
Polkadot (DOT): Buyers try to turn resistance into support
Polkadot’s retest of the breakout level was successfully defended by the bulls on Feb. This indicates that buyers are trying to turn the resistance line into support.
The bears offer stiff resistance around $7. However, the rising 20-day EMA ($6.41) shows that sentiment remains positive. If buyers push the price above $7.12, the DOT could go to $8. However, this will likely act as a strong barrier again. The first sign of weakness will be a break and close below the 20-day EMA. This may encourage short-term traders to take profits and open the doors for a possible drop to $6 and then to the 50-day SMA ($5.52).
Avalanche (AVAX)
AVAX bounced off the 20-day EMA ($19.28) on Feb. 7, indicating that lower levels continue to attract buyers. However, the bulls are struggling to sustain higher levels, which signals that the bears are selling on the rallies.
AVAX is stuck between the 20-day EMA on the downside and $22 on the upside. Generally, a consolidation near an overhead resistance is a positive sign as it indicates that the bulls are not rushing to the exit. If buyers push the price above $22, AVAX could begin its journey towards $30. Contrary to this assumption, if the price returns below the resistance line, it will indicate that the bulls have given up and taken profits. AVAX could then slide to the 50-day SMA ($15.61).
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