Bitcoin (BTC) has broken back below the psychological support at $60,000. While this seems to be negative in the short term, the price action has continued to mirror its movement in 2017. If the similarity continues for the remainder of the year, Bitcoin bulls may be in for a party.
PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, recently proclaimed in a tweet that the second leg of Bitcoin’s bull market has begun. If Bitcoin’s price action continues to follow the S2F model, the analyst believes a rally to $100,000 to $135,000 may be possible by the end of the year.
Is the current fall in Bitcoin a buying opportunity or the start of a deeper correction? How are the altcoins expected to react? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin failed to retest the overhead resistance zone at $64,854 to $67,000 on Oct. 25, which may have prompted short-term traders to book profits. That has pulled the price down to the strong support at the 20-day exponential moving average ($58,948).
The relative strength index (RSI) has dropped to the midpoint and the 20-day EMA is flattening out, suggesting a balance between supply and demand.
This advantage will tilt in favor of the bears if the pair slides and sustains below the 50-day simple moving average ($51,556). On the other hand, a breakout to a new all-time high will indicate that bulls are back in command.
ETH/USDT
The bulls tried to resume the uptrend in Ether (ETH) on Oct. 26 and 27 but could not sustain the price above $4,200. This suggests that bears are active at higher levels.
On the contrary, if the 20-day EMA cracks, it will signal that traders may be booking profits and supply exceeds demand. The bears will then try to pull the price to the 50-day SMA ($3,488).
BNB/USDT
Binance Coin (BNB) turned down from the overhead resistance and broke below the 20-day EMA ($462) today. This is the first sign that the bullish sentiment could be weakening.
If they succeed, the BNB/USDT pair could again try to rally to the overhead resistance at $518.90. A break and close above this resistance could signal the resumption of the uptrend.
Conversely, a close below the neckline could pull the price to the 50-day SMA ($423). If this support is breached, the next stop could be $392.20. The flattish moving averages and the RSI near the midpoint do not indicate a clear advantage either to bulls or bears.
ADA/USDT
Cardano’s (ADA) tight range trading between the 20-day EMA ($2.15) and the support line of the symmetrical triangle resolved to the downside today. This suggests that bears have asserted their supremacy.
If the price turns down from the 20-day EMA, the bears will again try to break the $1.87 support. If that happens, the ADA/USDT pair could resume the down move toward the pattern target at $1.58.
The bulls will have to push and sustain the price above the resistance line of the triangle to invalidate the negative view.
SOL/USDT
Solana (SOL) broke above the overhead resistance at $216 on Oct. 25 but the bulls could not sustain the breakout. This may have attracted profit-booking by short-term traders, pulling the price to the 20-day EMA ($177).
If they succeed, the SOL/USDT pair could resume the uptrend with the next target objective at $239.83. Contrary to this assumption, if bears pull the price below $171.47, the pair could extend the drop to the trendline. A break below this support will signal a possible trend change.
XRP/USDT
The bulls pushed XRP above the downtrend line on Oct. 26 but could not sustain the higher levels as seen from the long wick on the day’s candlestick. This may have trapped the aggressive bulls, resulting in strong selling today.
The 20-day EMA ($1.08) is flat but the RSI has dropped into the negative zone, indicating that the bears are attending a strong comeback. This negative view will invalidate if bulls push and sustain the price above the downtrend line. That could clear the path for a possible rally to $1.24.
DOT/USDT
Polkadot’s (DOT) failure to rise above the overhead resistance at $46.39 on Oct. 26 may have prompted selling by short-term traders. This pulled the price down to the strong support at $38.77 today.
Alternatively, if bulls fail to clear the overhead hurdle, the pair may consolidate between $46.39 and $38.77 for a few days. A break and close below $38.77 could signal the start of a deeper correction to the 50-day SMA ($35.14).
Related: Shiba Inu could surpass Dogecoin after a 700% SHIB price rally in October
DOGE/USDT
Dogecoin (DOGE) turned down from $0.28 on Oct. 24, indicating that traders are liquidating positions on rallies. The bulls again tried to push the price above the $0.27 overhead resistance on Oct. 26 but failed.
The 20-day EMA has flattened out and the RSI is just below the midpoint, suggesting a possible range-bound action in the near term. The next trending move could start on a break above $0.28 or a close below $0.19.
SHIB/USDT
SHIBA INU (SHIB) is in a strong uptrend. The long wick on the Oct. 24 candlestick shows that bears tried to stall the up-move at $0.00004465 but they could not sustain the selling pressure. Buying resumed on Oct. 25 and the meme coin resumed its northward march.
The bulls have pushed the SHIB/USDT pair above the 161.8% Fibonacci extension level at $0.00006531. If the price sustains above this level, the next stop could be the 200% extension level at $0.00007586.
Vertical rallies are rarely sustainable and they usually end with waterfall declines. Therefore, chasing prices higher after the recent rally may be risky.
LUNA/USDT
Terra protocol’s LUNA token broke above the overhead resistance at $45.01 on Oct. 26 but the bulls could not sustain the higher levels as seen from the long wick on the day’s candlestick.
Conversely, if the price breaks below the 50-day SMA, the pair could drop to the strong support zone at $34.86 to $32.50. This is an important zone for the bulls to defend because a break below it could accelerate selling.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
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