Bitcoin (BTC) surged above $39,000 on Feb. 1, but PayPal splits Reject may have caused short-term traders to sell off heavily.
In the longer term, however, large investors seem to see this decline as a buying opportunity. On-chain analytics platform Whalemap reports that whales holding between 100 and 10,000 BTC have accumulated during the recent drop.
Fidelity recently published an article entitled “Bitcoin first‘ which emphasizes that Bitcoin is ‘the most secure, decentralized form of asset’ and is unlikely to be surpassed ‘as a currency’ by any altcoin.
The report states that Bitcoin “combines the scarcity and sustainability of gold with the ease of use, storage and convertibility of fiat.”
Despite the volatility, Bitcoin’s trading volume at the end of 2021 has grown nearly 100% year over year over the past five years, according to Cointelegraph. a report last NYDIG. This has pushed Bitcoin’s annual transaction volume to $3 trillion by 2021, surpassing multinational financial services company American Express, a $1.3 trillion payments network, and Discover at $0.5 trillion.
Could a consolidation by bulls suggest a bottom has been hit? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin’s rally hit the 20-day EMA ($39,116) on Feb. 1, which is acting as a stiff resistance. This shows that sentiment is still negative and traders will sell if the price recovers to overhead resistance levels.
BTC/USDT daily chart | Source: TradingView
Now the bears will attempt to pull the price below $36,632.61. If successful, the bulls who bought the recent decline can take profits and drag the BTC/USDT pair below $35,000.
The moving averages are sloping down and the Relative Strength Index (RSI) is in negative territory, suggesting that the bears are prevailing.
Contrary to this assumption, a rebound in the price from $36,632.61 shows the bulls are buying down. They will then make another attempt to clear the overhead barrier at $39,600.
This is an important level to watch out for because if the pair sustains above it, the next stop could be the 50-day SMA ($43.421). The bulls need to break this barrier to signal the end of the downtrend.
Ether (ETH) broke out and closed above the breakdown of $2,652 on Jan 31, but the bulls failed to clear the barrier above the 20-day EMA ($2,792). This shows that the bears are aggressively defending this level.
ETH/USDT daily chart | Source: TradingView
If the price slides and sustains below $2,652, it will show that the bears are back in action. After that, the ETH/USDT pair can drop to $2,476 and below the channel support line. The downtrend might resume on a break below $2,159.
Conversely, if the price recovers from the current levels, it will show that the bulls are buying on the downside. After that, buyers will try again to push and sustain the pair above the 20-day EMA. If successful, the pair could start a march towards the resistance line of the channel.
Binance Coin (BNB) bounced off the channel support line on Jan. 31, showing the bulls are buying down. However, the bulls cannot sink the price to the 20-day EMA ($407).
Daily BNB/USDT Chart | Source: TradingView
This indicates a lack of demand at higher levels. Both the moving averages are sloping down and the RSI remains in the negative territory, which shows that the bears have the upper hand. Now the bears will attempt to pull the price back below the channel support line.
If successful, the BNB/USDT pair can drop into the strong $330-$320 support area. Alternatively, if the price rebounds from current levels and scales above the 20-day EMA, it will show that selling pressures are easing could.
Cardano (ADA) continues to struggle to recover from the strong USD 1 support, showing that there is no urgent need for traders to accumulate at the current levels.
Daily ADA/USDT Chart | Source: TradingView
If the bulls fail to push and sustain the price above the moving averages in the next few days, a break below $1 could increase. In this case, the ADA/USDT pair can continue its downtrend.
Initial support on the downside stands at $0.80. If this level is broken, the decline can extend to the channel’s support line. Conversely, a break and close above the 50-day SMA ($1.25) could lead to a retest of the channel’s resistance line.
Solana (SOL) rallied on Jan 31st and broke the overhead resistance at $104.82 on Feb 1st. The price hit the 20-day EMA ($112) on Feb. 2 and acted as a strong resistance level.
Daily SOL/USDT chart | Source: TradingView
The bears are attempting to sink the price below $104.82. If successful, it will show that the bears continue to sell heavily at higher levels. After that, the SOL/USDT pair can retest the recent lows of $80.83.
Conversely, if the price recovers from the current levels and scales above $116, it will show that the bulls are making a comeback. After that, the pair might attempt to scale to $130 and then the channel resistance line.
Ripple (XRP) is stuck between $0.54 and $0.65. The bulls’ attempt for a recovery rally cannot even challenge the overhead resistance at $0.65. This shows that the bulls lack confidence to buy at higher levels.
XRP/USDT daily chart | Source: TradingView
The sloping moving averages and the RSI near the oversold zone show that the bears are in control. If the price dips below $0.58, the XRP/USDT pair can drop to the strong support at $0.54.
A break and close below this level can drag the pair to the psychological support at $0.50. This negative view will be invalidated in the short-term if the price surges up from the current levels and breaks above the 20-day EMA ($0.66).
Terra (LUNA) bounced off the descending channel support line on Jan 31st but formed a doji candlestick pattern on Feb 1st. This shows that demand has dried up at higher levels.
Daily LUNA/USDT Chart | Source: TradingView
The uncertainty of the doji candlestick pattern has dissolved to the downside and now the bears will attempt to drag the price to the strong support at $37.50. The down-sloping 20-day EMA ($61.58) and the RSI in negative territory are showing that the bears are in charge.
If the price surges up from the current levels and breaks above $54.20, it will show that the bulls are consolidating on the downside. After that, the LUNA/USDT pair can reach the 20-day EMA, which can act as a hurdle. A break and close above this resistance will be the first sign that the bears may lose their footing.
Dogecoin (DOGE) has been stuck between $0.13 and $0.15 for the past few days. After failing to break below the support, the price surged to the 20-day EMA ($0.14), which acted as a stiff resistance.
Daily DOGE/USDT chart | Source: TradingView
The price has turned down from the 20-day EMA and the bears will make another attempt to sink and sustain the DOGE/USDT pair below $0.13. The moving averages are sloping down and the RSI is in the negative territory, suggesting that the path of least resistance is down.
If the price slips and sustains below $0.13, the next stop can be $0.10. Conversely, if the price recovers from $0.13, the pair can extend its range-bound action by a few days. The bulls need to push and hold the price above the 50-day SMA ($0.16) to signal a potential reversal.
The failure of the bears to sink Polkadot (DOT) below the strong support at $16.81 over the past few days may have attracted buying from the cantankerous bulls. This triggered a recovery rally to the 20-day EMA ($20.74).
DOT/USDT daily chart | Source: TradingView
The long wick on the February 2nd candlestick shows that the bears are actively defending the 20-day EMA. The sellers will now make another attempt to drop and sustain the price below the critical support at $16.81.
In that case, the downtrend could resume and the DOT/USDT pair could drop to the next key support at $10.37.
Contrary to this assumption, the pair can rally to the 50-day SMA ($24.63) if the price rebounds from current levels and breaks out of the 20-day EMA.
The Avalanche (AVAX) recovery rally has stalled near the $75.50 level, showing that the trend is still down and the bears are trying to assert their supremacy.
AVAX/USDT daily chart | Source: TradingView
If the bears sink the price below $64, the AVAX/USDT pair can gradually slide towards the critical support at $51.04. This level could act as strong support again and a rebound from it could lead to range bound action in a few days.
On the other hand, if the price surges up from the current levels, the bulls will make one more move to push the price above the $75.50 resistance level. If they succeed, the pair can rally to the downtrend line of the descending triangle.
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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