The cryptocurrency markets and the U.S. stock market sold out on September 20 amid fears that the collapse of Chinese real estate giant Evergrande would not only harm China, but also negatively impact other markets.
When the mood turns bearish, traders will ditch positions they consider risky in order to move to safe investments. This could be one of the reasons behind the sharp decline in Bitcoin (BTC) and most of the major altcoins on September 20th.
Bybt data shows that bitcoins held in Binance wallets have increased by 29,717 bitcoins in the last 30 days. History shows that an increase in the Bitcoin balance on Binance resulted in a decrease in the price of Bitcoin.
The Bitcoin balance on Binance has increased from 99,700 BTC on April 20th to 347,590 BTC on June 26th. During this period, the Bitcoin price has fallen from around $ 57,000 to around $ 30,000.
Now the question is, can the sell-off deepen or will lower levels attract heavy buying from traders? Let’s analyze the top 10 cryptocurrency charts to find out.
Bitcoin sales deteriorated after the bears dragged the price below the moving averages. The price action of the past few days has created a dominant head and shoulders pattern that completes when price breaks and closes below the cutout.
BTC / USDT daily chart | Source: TradingView
The moving averages are on the verge of a bearish cross and the relative strength index (RSI) has fallen below 41, showing that the bears are in control. If the price holds below the neckline, the BTC / USDT pair may drop to $ 37,332 and then to the target of the pattern at $ 32.423.
Contrary to this assumption, the bulls will try again to push the price towards $ 50,000 if the price bounces off the neckline. However, the bears are likely to aggressively defend the 20-day EMA ($ 47.014).
When the price deviates from this resistance, it shows that sentiment has turned negative and traders are selling on rallies. The first sign of strength will be a breakout and close above $ 48.843.
Ether (ETH) bounced off the $ 3,377.89 support on September 18, but the bulls were unable to keep the price above the 20-day EMA ($ 3,402). This shows that traders have closed positions at higher levels.
ETH / USDT daily chart | Source: TradingView
If the price breaks and closes below USD 3,000, the ETH / USDT pair will complete a bearish head and shoulders pattern. The goal of this setup is at $ 1,972.12.
The 20-day EMA has started falling and the RSI is below 42, suggesting that the path of least resistance is on the downside.
Conversely, if the bulls aggressively defend the $ 3,000 level, the pair may rise again to the $ 3,377.89 resistance. The bears are likely to defend this level, but if the bulls break above this resistance it will signal that the correction may be over.
The bulls defended the 50-day SMA ($ 2.31) on September 18 but failed to build on the rebound. Continuous selling pulled Cardano (ADA) below the 50-day SMA on September 19.
Daily ADA / USDT Chart | Source: TradingView
Sell escalated on September 20th and the ADA / USDT pair fell to the critical support at $ 1.94. A strong rebound from this level will show that the bulls are consolidating on the downside.
If buyers continue the rebound, the pair can gradually move towards the $ 2.47 resistance level. The bears are likely to sell in the relief rallies to the 20-day EMA ($ 2.45). If the price deviates from this resistance, the pair may fall back to $ 1.94.
A breakout and a close above the 20-day EMA are the first signs that sellers may lose control.
Binance Coin (BNB) fell below the 50-day SMA ($ 422) on September 17th and subsequent attempts by the bulls to regain that level have failed. This shows that the bears sell on every little rally.
BNB / USDT daily chart | Source: TradingView
The sell gained momentum on September 20th and the BNB / USDT pair fell near the critical support at 340. This is an important level for the bulls to defend as a break below that level could open at $ 250.
The moving averages have created a bearish cross and the RSI is in negative territory, showing that the bears have the upper hand.
If the price rebounds from $ 340, the pair can rebound to the 20-day EMA. This level is likely to act as a strong resistance level. The bulls need to push and hold the price above $ 422.80 to show the correction is over.
Ripple (XRP) has been trading near a breakout at $ 1.07 for the past few days, but the bulls’ failure to push the price above the 20-day EMA ($ 1.09) shows the bears are on there are momentum on the way.
XRP / USDT daily chart | Source: TradingView
Sales rose after the bears pulled the price and closed below the 50-day SMA ($ 1.08) on September 19.
If the price stays below $ 0.95, the XRP / USDT pair can drop to $ 0.75. Any recovery from current levels should face strong resistance in the 20-day EMA. A breakout and close above USD 1.13 signals that the bulls are aiming for a return.
The long tail on the September 17 bar shows that the bulls were actively buying as the price fell below the 20-day EMA (USD 148). This was followed by a strong rally on September 18, but the bulls were unable to hold Solana (SOL) above the initial resistance at $ 170.
Daily SOL / USDT chart | Source: TradingView
This could have resulted in profit-taking in the bulls and short selling in the aggressive bears. The 20-day EMA has flattened and the RSI is near the middle, showing that the bulls are losing their hold.
If the price holds below the 20-day EMA, the SOL / USDT pair may plunge to the 61.8% fib retracement level at $ 123.42. A break and close below this support would indicate that the uptrend may be over.
The bulls need to push and hold the price above USD 171.47 to signal the end of the correction.
Polkadot (DOT) rallied from the 20-day EMA (USD 32.12) on September 18, followed by a candlestick pattern inside the bars on September 19. This shows the indecision between the cops and the cops.
DOT / USDT daily chart | Source: TradingView
That uncertainty cleared on September 20th with a break below the 20-day EMA. The sale gained momentum, dragging the price below critical support on the 50-day SMA ($ 27.29). This is vital support for the bulls they successfully defended on September 7th.
If the DOT / USDT pair rebounds from current levels, the bears will likely sell on a rebound to the 20-day EMA. If the price moves down from this level, it shows that sentiment has turned negative and increases the prospect of a break below the 50-day SMA. This view will be void if the price rises and falls above $ 34.
Trading within a tight range of Dogecoin (DOGE) for the past few days broke down on September 20 as the bears pushed the price down to the strong support at $ 0.21.
Daily DOGE / USDT Chart | Source: TradingView
The 20-day bearish EMA ($ 0.25) and the RSI near the oversold zone show that the bears are in control. If they can break and hold the price below the $ 0.21 support, the DOGE / USDT pair may slide to $ 0.15.
If the price recovers from current levels, the bulls will try again to push the pair above the 20-day EMA. If they do, the pair can climb to the downtrend line. Also, if the price deviates from the 20-day EMA, it increases the prospect of a break below $ 0.21.
The bulls attempted to rebound on September 18 but failed to push Uniswap (UNI) above the 20-day EMA ($ 25.09). This shows that the bears are actively defending the 20-day EMA.
UNI / USDT daily chart | Source: TradingView
The UNI / USDT pair continues to decline and the bears pulled the price below the critical support at USD 21 today. If the price stays below this support, the pair could panic sell-off, falling to the nearest support at $ 18.
The falling 20-day EMA and the RSI in negative territory suggest an advantage for the bears. This negative view will be invalidated if the price rises from the current level and rises above the downtrend line. Such a move would indicate strong accumulation at lower levels.
The long wick on the September 18th and 19th bars shows that traders are making gains at higher levels. Selling rose today and Avalanche (AVAX) fell to the 20-day EMA ($ 55.16).
AVAX / USDT daily chart | Source: TradingView
The strong rebound from the 20-day EMA shows that sentiment remains positive and traders are accumulating on the downside. If the price holds above $ 60.04, the bulls will try again to push the AVAX / USDT pair to the all-time high of $ 76.27.
Conversely, if the price declines from current levels and falls below the 20-day EMA, the downward move could intensify if traders break out. This can pull the price up to $ 48 and then to the 50-day SMA ($ 38.56) where buyers can step in to take advantage of the downside.
You can see the coin prices here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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According to Cointelegraph
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