Bitcoin (BTC) is attempting to bottom out and whales seem to be helping it do that. Coin Metrics data shows that whale addresses holding at least 1,000 Bitcoin have been accumulating in the past few days. The total supply of these addresses rose from 7.95 million Bitcoin on Jan. 24 to 8.096 million on Feb. 10.
Another sign that investor sentiment could be turning positive is that crypto exchange balances of stablecoins have soared above $27 billion for the first time, according to on-chain analytics platform CryptoQuant. In comparison, Bitcoin reserves on the exchanges have continued to slide, indicating that investors are stashing their holdings.
Although Bitcoin has been closely correlated with the U.S. equity markets in the short term, Zhu Su, co-founder of hedge fund Three Arrows Capital (3AC), believes their performance will diverge in 2022. Zhu suggested that Bitcoin and Ether (ETH) are candidates for going long while the S&P 500 is a short candidate.
After the recent recovery in Bitcoin and altcoins, is it time for a minor correction or consolidation? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin turned down from the overhead resistance at $45,456 on Feb. 10, indicating that bulls continue to defend the level aggressively. A minor positive is that bulls have not allowed the price to break below the 50-day simple moving average ($42,427).
This indicates that bulls are attempting to flip the 50-day SMA into support. The rising 20-day exponential moving average ($41,317) and the relative strength index (RSI) in positive territory indicate a slight advantage to buyers.
If the price bounces off the current level, the bulls will make one more attempt to push the BTC/USDT pair above $45,456. If they succeed, the bullish momentum could pick up and the pair may rise to $48,000 and later to $52,088.
Contrary to this assumption, if the price turns down from the current level or from $45,456, the bears will fancy their chances and attempt to pull the pair below the 20-day EMA. If that happens, the pair could drop to $39,600.
Ether broke and closed above the 50-day SMA ($3,171) on Feb. 9, but the bulls could not build upon this strength. The price turned back below the 50-day SMA on Feb. 10 which suggests that bears are attempting to trap the aggressive bulls.
However, a positive sign is that the bulls have not allowed the price to break back into the channel. If the price rebounds off the 20-day EMA ($2,959), the buyers will again attempt to push the ETH/USDT pair above the overhead hurdle.
The zone between the 50-day SMA and $3,400 could act as a major roadblock. If buyers clear this hurdle, the pair could start a new up-move
Contrary to this assumption, if the price re-enters the channel, it will suggest that sentiment remains negative and traders are selling on rallies. The pair could then drop to the critical support at $2,652.
Binance Coin (BNB) is struggling to break above the downtrend line of the descending channel. This suggests that bears are defending the resistance with all their might.
The flattish 20-day EMA ($410) and the RSI near the midpoint suggest a balance between supply and demand. If the price breaks below the 20-day EMA, it will increase the prospects of the BNB/USDT pair staying inside the channel for a few more days. The pair could first slip to $390 and then continue its downward move to $357.40.
On the contrary, if the price rebounds off the current level, the bulls will make one more attempt to propel the pair above the channel and the 50-day SMA ($448). If they succeed, the pair could gradually rise to $500.
Ripple (XRP) is witnessing profit-booking after the recent rally. The price could drop to the breakout level at $0.75 where the buyers may step in to arrest the decline.
The rising 20-day EMA ($0.73) and the RSI in the positive territory indicate that bulls have the upper hand. The buyers will now attempt to defend the support at $0.75.
If the price rebounds off this level, the buyers will again attempt to drive the XRP/USDT pair above $0.92 and challenge the psychological resistance at $1.
This bullish view will invalidate in the short term if the price breaks below the 20-day EMA. Such a move could open the doors for a decline to $0.65.
Cardano (ADA) has repeatedly failed to break above the 50-day SMA ($1.22) in the past few days, indicating that bears are defending this level with vigor. The sellers will now attempt to sink and sustain the price below the 20-day EMA.
If they manage to do that, the ADA/USDT pair could drop to the critical support at $1. This is an important level for the bulls to defend because a break and close below it could intensify selling. The pair could then slide to $0.80.
The moving averages have flattened out and the RSI is near the midpoint, indicating a balance between supply and demand. If the price bounces off the current level and breaks above the 50-day SMA, the pair could rise to the resistance line of the descending channel. A break and close above this level will signal a positive change in trend.
Solana (SOL) turned down from the overhead resistance at $116 and broke back below the 20-day EMA ($111) on Feb. 10. This suggests that the sentiment remains negative and bears are selling on rallies to resistance levels.
The SOL/USDT pair could now slide to $94 and then to the strong support at $80.83. This is an important level for the bulls to defend because a break and close below it could signal the resumption of the downtrend. The pair could then drop to the support line of the channel.
The first sign of a trend change will happen on a break and close above the resistance line of the channel. Such a move could signal the start of a possible new uptrend. The pair could then rally to $157.80.
The bulls have repeatedly failed to push Terra’s LUNA token above the 20-day EMA ($57.80) in the past few days, which suggests that bears are defending the level aggressively. Hence, this becomes a key resistance to watch on the upside.
The downsloping 20-day EMA and the RSI in the negative territory indicate that bears have the upper hand. If the price sustains below $54.20, the LUNA/USDT pair could slip down to the strong support at $43.44.
This negative view will invalidate if the price turns up from the current level and breaks above $60.64. The pair could then rally to the downtrend line of the descending channel where the bears may again pose a strong challenge to buyers.
Related: Bitcoin stuck in a tight range as BTC price moving averages prepare key bullish cross
The downtrend line is proving to be a tough barrier for the bulls to cross. This indicates that higher levels continue to attract selling by the bears. If Avalanche (AVAX) breaks below the 50-day SMA ($87), a drop to the 20-day EMA ($80) is possible.
If the price rebounds off the 20-day EMA, it will suggest that traders are buying on dips. The bulls will then again try to thrust the price above the downtrend line and start a new up-move. If they manage to do that, the AVAX/USDT pair could rally to $117.53.
Conversely, if the price breaks below the support zone between the 20-day EMA and $75.50, it will suggest that the sentiment remains negative and traders are selling on rallies. The pair could then drop to $64.85.
Polkadot (DOT) slipped and closed below the 20-day EMA ($20.96) on Feb. 10, indicating that bears are aggressively defending the overhead resistance zone between $22.66 and the 50-day SMA ($23.75).
The flattish moving averages and the RSI below 46 suggest that bears have a slight edge in the short term. If the price sustains below the 20-day EMA, the DOT/USDT pair could slide to the strong support at $16.81. If the price rebounds off this support, the pair could remain range-bound for a few more days.
Contrary to this assumption, if the price turns up from the current level and rises above the 50-day SMA, it will suggest that bears may be losing their edge. The pair could then start its up-move to $28.
Dogecoin (DOGE) again stumbled at the 50-day SMA ($0.15) on Feb. 9 and 10, indicating that bears are aggressively defending this resistance. Both moving averages are flattening out and the RSI is near the midpoint, suggesting a range-bound action in the short term.
If the price slips and sustains below the 20-day EMA ($0.15) traders who bought the recent dip may close their positions. This could pull the DOGE/USDT pair toward the strong support zone between $0.10 to $0.12.
Instead, if the price rebounds off the current level, the buyers will make one more attempt to push the pair above the overhead resistance at $0.17. If they manage to do that, the pair could rally to $0.22.
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.