10 March 2023 19:15, UTC
Reading time: ~7 m
Bitcoin (BTC) led a sharp sell-off in the cryptocurrency markets on March 9 as the woes at Silvergate Bank and Silicon Valley Bank dented investor sentiment.
In addition, crypto-specific news of a suit filed by New York Attorney General Letitia James against cryptocurrency exchange KuCoin for selling securities and commodities without registration increased uncertainty about the future of crypto sector regulation.
The selling momentum continued on March 10 and pulled Bitcoin below the $20,000 mark. Several other cryptocurrencies have also broken below their important support levels.
Daily cryptocurrency market performance. Source: Coin360
But a minor positive in favor of the bulls is that February’s jobs report was a mixed bag. Although nonfarm payrolls rose 311,000 for the month, above estimates of an increase of 225,000, the average earnings rose less than anticipated. That reduced expectations of a 50 basis point rate hike in the Federal Reserve’s March meeting from 68% on March 9 to 42% on March 10.
What are the important levels on the upside that will signal a sustained recovery in Bitcoin and altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin sliced through the $21,480 support on March 9 with ease. The selling continued on March 10 and the price broke below the crucial support at $20,000.
BTC/USDT daily chart. Source: TradingView
The fall of the past few days has sent the relative strength index (RSI) into the oversold zone. This suggests that the selling may have been overdone in the near term and a recovery may be possible.
During a sharp fall, markets usually tend to overshoot on the downside. The same may have happened here. The bulls will try to start a rebound off the current levels but may face strong resistance at higher levels.
The bears will try to flip the $21,480 level into resistance. If that happens, the BTC/USDT pair may turn down and retest the $20,000 support. If this level breaks down, the next stop could be $18,000.
Ether (ETH) witnessed aggressive selling on March 9, which pulled the price below the strong support at $1,461.
ETH/USDT daily chart. Source: TradingView
The ETH/USDT pair could next drop to $1,352 where the bulls are likely to mount a strong defense. If the price turns up from $1,352, the recovery may hit a brick wall at $1,461. If the price turns down from this level, it will increase the possibility of a fall to $1,200.
If bulls want to prevent the decline, they will have to quickly push the price back above $1,461. Such a move will suggest strong buying at lower levels. The pair may then reach the 20-day exponential moving average ($1,565).
BNB (BNB) turned down from the 20-day EMA ($294) on March 8 and broke below the solid support of $280. This move completed a bearish head and shoulders (H&S) pattern.
BNB/USDT daily chart. Source: TradingView
Typically, the price returns to retest the breakdown level from the pattern. If the price turns down from $280, it will suggest that bears have flipped the level into resistance. That may send the BNB/USDT pair tumbling toward $245 and thereafter to the pattern target of $222.
Contrarily, if bulls drive the price above $280, the pair could reach the 20-day EMA. This level may again attract strong selling but if bulls absorb the supply and do not allow the pair to slip below $280, it will suggest the start of a recovery.
XRP (XRP) broke above the descending channel pattern on March 8 but the long wick on the day’s candlestick shows selling at higher levels.
XRP/USDT daily chart. Source: TradingView
The bears pulled the price back into the channel on March 9, which may have trapped the aggressive longs. The XRP/USDT pair has reached the solid support at $0.36. If this level gives way, the pair may reach the support line of the channel near $0.33.
Contrary to this assumption, if the price rebounds off $0.36, the bulls will make one more attempt to push the pair above the channel. If they succeed, the pair may rally to the overhead resistance at $0.43.
Cardano (ADA) broke below the $0.32 support on March 8 and the bears thwarted attempts by the bulls to push the price back above the level on March 9.
ADA/USDT daily chart. Source: TradingView
The selling resumed on March 10 and bears pulled the price below the 61.8% Fibonacci retracement level of $0.30. This opens up the possibility of a further fall to the 78.6% Fibonacci retracement level of $0.27.
Buyers are currently trying to push the price back above $0.32. If they manage to do that, it will suggest solid demand at lower levels. The ADA/USDT pair may then rise to the 20-day EMA ($0.34). The bulls will have to clear this hurdle to indicate that they are back in the game.
Dogecoin (DOGE) easily broke below the strong support near $0.07 which had not been breached convincingly since October 2022. This shows that bears are in complete control.
DOGE/USDT daily chart. Source: TradingView
The RSI has dipped into the oversold zone, indicating that a minor consolidation or a relief rally is possible. The bulls are expected to defend the zone between $0.06 and $0.05 with all their might because a break below it could result in panic selling.
On the way up, buyers will face stiff resistance at $0.07 and again at the downtrend line. If the price turns down from this zone, the bears will again try to sink the DOGE/USDT pair below the vital support at $0.05.
Polygon (MATIC) turned down sharply on March 8 and fell to the strong support of $1.05. Ideally, this level should have attracted aggressive buying but that did not happen.
MATIC/USDT daily chart. Source: TradingView
This shows that traders sold aggressively. The incessant selling pulled the price below $1.05 on March 9 and the bears continued with their selling on March 10.
However, the long tail on the candlestick suggests solid buying near the support at $0.91. The bulls will try to push the price back above the breakdown level of $1.05. If they can pull it off, the MATIC/USDT pair may rise to the 20-day EMA ($1.17).
On the other hand, if the price turns down from the current level, it will suggest that bears are unwilling to let go of their advantage. That increases the risk of a fall to the crucial support zone between $0.74 and $0.69.
Related: Dogecoin hits 4-month lows vs. Bitcoin — 50% DOGE price rebound now in play
After a weak attempt to hold $19.68 on March 7, Solana (SOL) slipped below the support on March 8. This indicates that bears are back in the driver’s seat.
SOL/USDT daily chart. Source: TradingView
The SOL/USDT pair has a minor support at $15.28 where the bulls are again trying to arrest the decline and form a higher low. Any attempt to recover is likely to face strong selling at $19.68 and again at the resistance line. A break above this level will indicate a potential trend change.
On the downside, if the $15.28 level gives way, the pair may fall to $12.85 and then to the psychologically critical support at $10.
Polkadot (DOT) is in a strong corrective phase. The bears pulled the price below the important support at $5.56 on March 9.
DOT/USDT daily chart. Source: TradingView
The selling continued on March 10 but the long tail on the candlestick indicates strong buying near the 78.6% Fibonacci retracement level of $5. This is a crucial level for the bulls to defend because a break below it may open the gates for a complete 100% retracement to $4.22.
Contrarily, if the price turns up and rises back above $5.56, it will suggest solid demand at lower levels. The DOT/USDT pair may then climb to the 20-day EMA ($6.14) where the bears may again mount a strong defense.
Buyers tried to start a recovery in Shiba Inu (SHIB) on March 8 but the long wick on the day’s candlestick shows strong selling near the 20-day EMA ($0.000012).
SHIB/USDT daily chart. Source: TradingView
The SHIB/USDT pair turned down and fell below the $0.000011 support on March 9. The bulls are currently trying to defend the psychological level of $0.000010. If they succeed, the pair may start a relief rally to the 20-day EMA where the bulls may again face strong selling by the bears.
If the price turns down from the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on rallies. That increases the likelihood of a break below $0.000010. If that happens, the pair may descend to $0.000008.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Read the full article here
Discussion about this post