Bitcoin (BTC) and select altcoins are showing signs of some buying near support levels. According to Arcane Research, the seven-day average real Bitcoin trading volume has dropped to the lowest level since July 2021. During the previous instance, the sharp drop in volume marked a bottom and led to a strong rally from August to October 2021.
However, Bloomberg Intelligence senior commodity strategist McGlone warned in a recent podcast that risk assets may correct as the United States Federal Reserve increases rates and reduces asset purchases.
After the corrective phase is over, McGlone expects Bitcoin to transition from a “risk-on to a risk-off asset” and “come out better off.”
In the short term, analysts at Decentrader, a crypto market intelligence firm, expect Bitcoin to stay range-bound between “$44,000 and potentially $38,000 before an eventual breakout.”
While analysts are divided on their forecasts for Bitcoin, let’s study the charts of the top-10 cryptocurrencies to find the path of least resistance.
The bears are attempting to pull Bitcoin toward the strong support at $39,600 but the long tail on the candlesticks of the past two days shows that bulls have other plans. The buyers are buying on dips but a minor negative is that they have not been able to push the price above the 20-day exponential moving average ($43,804).
Both moving averages are sloping down and the relative strength index (RSI) remains in the negative zone, indicating that bears have the upper hand. If the price turns down from the current level or the 20-day EMA, the bears will again attempt to sink the BTC/USDT pair to $39,600. This is a key level to keep an eye on in the short term.
If this level cracks, the bearish momentum could pick up as several stop-losses could be triggered. That may result in a decline to $30,000.
Alternatively, if the price rebounds off the current level or the $39,600 support, the buyers will attempt to push the pair above the moving averages. If the price sustains above the 50-day simple moving average ($47,070), the negative view will invalidate and the pair could rally to the stiff overhead resistance at $52,088.
Ether (ETH) has continued its down move and is close to the support at $2,928.83. The bulls may attempt to defend this level and start a relief rally.
If that happens, the ETH/USDT pair could rise to the 20-day EMA ($3,381). This is a key resistance to watch out for because a break above it will be the first indication that the bears may be losing steam.
A break and close above the channel will signal a possible change in trend. The pair could then start its upward march toward $4,200.
On the contrary, if the price turns down from the current level or the 20-day EMA, it will increase the possibility of a break below $2,928.83. If that happens, the pair could slide to the strong support at $2,652.
Binance Coin (BNB) continues to trade inside the descending channel pattern. The 20-day EMA ($485) has started to turn down and the RSI has dipped below 43, suggesting that bears are at an advantage.
The bulls are attempting to defend the minor support at $450. If the price rebounds off this level, the buyers will make one more attempt to clear the overhead hurdle at $500. If they succeed, it will indicate a possible change in trend.
The BNB/USDT pair could then start its northward march toward $572 and later to $617. Alternatively, if the price breaks below $450, the bears will try to pull the BNB/USDT pair to the support line of the channel.
Cardano (ADA) rallied to the resistance line of the descending channel on Jan. 18 but the bulls could not push the price above the channel. This suggests that bears are defending the resistance line aggressively.
The ADA/USDT pair has dipped to the moving averages, which could act as a strong support. The moving averages are on the verge of a bullish crossover and the RSI is in the positive territory, indicating advantage to buyers.
If the price rebounds off the current level, the bulls will again try to drive the price above the channel and the developing neckline of a possible inverse head and shoulders pattern. If that happens, the pair could start a new uptrend.
This positive view will invalidate if the price breaks and sustains below the moving averages. Such a move could pull the pair down to $1.06.
Solana (SOL) has reached near the minor support at $130. The bulls had defended this level on Jan. 10 and may again try to do so during the current decline.
If the price rebounds off the support, the bulls will again attempt to push the SOL/USDT pair above the 20-day EMA ($151). If they succeed, the pair could rally to the resistance line of the descending channel.
This is an important level to watch out for because a break and close above it will signal the possible start of a new up-move.
On the contrary, if the $130 support cracks, the pair could drop to the critical support at $116. A break below this level could pull the price to the support line of the channel.
Ripple (XRP) had been stuck between the 20-day EMA ($0.78) and the $0.75 support for the past few days, which has resolved to the downside today. This indicates that bears have overpowered the buyers.
The downsloping moving averages and the RSI in the negative territory indicate that the path of least resistance is to the downside. If the price sustains below $0.75, the bears will try to build upon their advantage and sink the XRP/USDT pair to $0.69.
Contrary to this assumption, if the price turns up from the current level and rises above the moving averages, it will indicate that bulls are accumulating on dips. That could start a relief rally which could reach the overhead resistance at $1.
Terra’s LUNA token dipped below the 50-day SMA ($76) on Jan. 18 but the bulls bought the dip and pushed the price back above the 20-day EMA ($80). This is a positive sign as it shows traders are buying on dips.
If the bulls maintain the price above the 20-day EMA, the LUNA/USDT pair could rise to the downtrend line. A break and close above this level will suggest that the selling pressure could be reducing. The pair could then rise to the 61.8% Fibonacci retracement level at $87.88 and later to $93.81.
This positive view will invalidate if the price turns down and breaks below $73.95. Such a move will suggest that supply exceeds demand. The pair could then decline to $68.33 and later to $62.46.
Related: 43% of Bitcoin trading volume during US market hours: Arcane Research
Polkadot (DOT) continues to drift down toward the strong support at $22.66 where the bulls will try to halt the decline. The strength of the rebound off this level could indicate whether the decline is over or not.
If the bounce rises above the moving averages, it will suggest accumulation at lower levels. The DOT/USDT pair could then rise to the overhead resistance at $32.78. A break and close above this level will suggest the start of a new uptrend.
Conversely, if the price turns down from the moving averages, it will indicate that sentiment remains negative and traders are selling on rallies. That will increase the prospects of a break and close below $22.66. If that happens, the pair could drop to $16.81.
Avalanche (AVAX) continues to slide toward the strong support at $75.50. The price action of the past few days has formed a descending triangle pattern that will complete on a break and close below $75.50.
Both moving averages are sloping down and the RSI is in the negative territory, indicating that bears have the upper hand. The sellers will have to sink and sustain the price below $75.50 to indicate the start of a new downtrend.
The bulls are unlikely to surrender the $75.50 level easily. If the price rebounds off this support, the AVAX/USDT pair could reach the moving averages. If buyers push the price above the moving averages, the pair could rise to the downtrend line. The bulls will have to propel the price above this resistance to indicate a change in trend.
Dogecoin (DOGE) dipped below both moving averages on Jan. 18 which brings the $0.19 to $0.13 range into play. The flattish 20-day EMA ($0.16) and the RSI just below the midpoint suggest a balance between supply and demand.
If the price sustains below the moving averages, the DOGE/USDT pair could gradually drop to $0.15 and if this level also cracks, the decline could extend to $0.13. A break and close below $0.13 will indicate the resumption of the downtrend.
Alternatively, if the price turns up and breaks above the moving averages, it will suggest that bulls are buying on dips. The buyers will then attempt to clear the overhead hurdle at $0.19 and push the pair 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.