The price of Bitcoin (BTC) has been correcting for the past few days and traders are curious as to whether this is a small pullback or the beginning of a deeper drop. The problem is, no one has a crystal ball and analysts can only point to critical support levels that can be sustained based on historical data and evidence.
Nevertheless, in a bearish phase, the price tends to fall below key support levels as traders panic and sell out of fear, similar to how the price exceeds the bullish targets during a bull run when traders buy fueled by the FOMO.
March has historically been a weak month for Bitcoin, suggesting that seasonal traders may prefer to pause and watch rather than jump in to buy the dips. This lack of demand may be one of the reasons why Grayscale’s Bitcoin Trust premium fell to negative levels over the past week.
However, not all the data is bearish. On February 26, Moskovski Capital CEO Lex Moskovski noted that Bitcoin miners’ positions turned positive on February 26 for the first time since December 27. What’s more, CryptoQuant CEO Ki Young Ju said that Coinbase’s large withdrawals in recent days suggest that institutions continue to accumulate at the lowest levels.
This data appears to be inconclusive and does not provide an immediate picture of whether the advantage is in favor of the bulls or the bears. Let’s study the charts of the top 5 cryptocurrencies that can perform outstandingly in the coming days.
BTC / USD
Bitcoin fell below the 20-day exponential moving average ($ 47,441), which is the first sign of the beginning of a deeper correction. The next critical support is the 50-day simple moving average at $ 41.066. The price has not closed below this support since October 9, so the level has gained importance.
The bulls are likely to aggressively defend the 50-day SMA. If the price bounces from this support and rises above the 20-day EMA, it will suggest that the sentiment is still bullish and traders are buying the dips.
However, the flat moving averages and the Relative Strength Index (RSI) just below the midpoint suggest that the bulls are losing control.
If the bears sink the price below the 50-day SMA, it will indicate that the supply exceeds the demand and the traders are taking their profits in a hurry. Such a move could drag the price down to the February 8 intraday low of $ 38,000.
A break below this support will be a very negative thing, as the next support is at $ 32,000 and the next $ 28,850.
The 20-day EMA going down and the RSI in the negative zone suggest that the bears are in control. The price is currently approaching critical support at $ 41,959.63.
If the price bounces off this support, the bulls will try to push the price above the 20-day EMA. If they are successful, it will suggest that the bulls are accumulating on the dips aggressively. The BTC / USD pair can then rise to the 50-day SMA and later to $ 52,000.
Conversely, if the support at $ 41,959.63 breaks down and the bears turn it into resistance, a deeper correction is likely to take place.
BNB / USD
Binance Coin (BNB) has been in a corrective phase since February 20, which shows that traders are securing their gains after the strong upward movement on February 19. However, the pace of the decline has been gradual since February 25, indicating that traders have not panicked.
The price has currently fallen to the 20-day EMA ($ 194) where buyers can intervene. If the price bounces off this support and breaks above the downtrend line, the BNB / USD pair may again attract short-term purchases from traders. That could push the price to $ 280 and later to $ 300.
The 20-day EMA has flattened out and the RSI is just above the midpoint, indicating a balance between supply and demand. However, if the bears sink and hold the price below the 20-day EMA, it will suggest that the supply is greater than the demand. The pair could then correct to $ 167.3691 and then $ 118.
The 4 hour chart shows the formation of a descending triangle pattern that will be completed with a breakout and close below $ 189. If that happens, it will suggest that the top was reached and the pair could drop to $ 118.
Conversely, If the bulls defend the support at $ 189, it will indicate that sentiment remains positive as the bulls are buying on dips to important support levels. A breakout and close above the downtrend line will invalidate that downtrend setup and that may result in a rally towards $ 280.
DOT / USD
Polkadot (DOT) is correcting in an uptrend. The long tail of the Feb 23 and 26 candles suggests that the bulls are attempting to defend the 20-day EMA ($ 30.49). However, the long wick of the February 27 rebound shows that demand dries up at higher levels.
The 20-day EMA is flattening out and the RSI is falling towards the center, which suggests that the bullish momentum is weakening. However, during the recent bull run, the DOT / USD pair has received support at the 20-day EMA on several occasions.
If the price rebounds from the 20-day EMA and the bulls push the price above $ 35.6618, the pair may retest the all-time high at $ 42.2848. A breakout above this resistance could result in a rally towards $ 50.
This bullish view will be invalidated if the bears sink the price below the 20-day EMA and the 61.8% Fibonacci retracement level at $ 25.7817. If that happens, the pair may drop to the 50-day SMA ($ 22.33).
The 4-hour chart shows us that the price is currently fluctuating within a symmetrical triangle. If the bears can sink the price below the triangle support line, the pair could drop to $ 25.7817 and then to the pattern’s target of $ 18.70.
The declining 20-day EMA and the RSI in negative territory suggest a slight advantage for bears in the near future. But if the price bounces off the current level, the bulls will try to push the price above the triangle. If they get their way, the pair can move up to $ 42.2848.
XEM / USD
The bulls defended the 20-day EMA ($ 0.475) on February 26, showing that the positive sentiment remains intact and traders are buying the dips. The bulls are currently attempting to resume the uptrend in NEM (XEM).
Moving averages rising and RSI above 63 suggest that the path of least resistance is to the upside. If the bulls can carry the price above $ 0.5051, the XEM / USD pair could rally to $ 0.7637. The breakout of this resistance could open the doors for a move up towards $ 0.9607.
Contrary to this idea, if the price reverses its direction from $ 0.5051, the pair may consolidate for a few days before starting its next trend move. A breakout and close below the 20-day EMA will suggest the beginning of a deeper correction.
The 4-hour chart shows that the price has been stagnant between $ 0.439 and $ 0.63 for the past few days. Both moving averages are sloping slightly higher and the RSI is just above the midpoint, which suggests a minimal advantage for the bulls.
If the bulls can propel the price above $ 0.63, the pair can rally to $ 0.763 and then $ 0.821. Conversely, if the price falls below the moving averages, the pair could fall to the support at $ 0.439. If this support also breaks, the correction may extend to $ 0.346 and further to $ 0.277.
MIOTA / USD
MIOTA has been in a corrective phase since it hit $ 1.554775 on February 19. While the pullback has been significant, the good news is that the bulls have been successfully defending the 20-day EMA ($ 1.09) for the past few days.
The 20-day EMA has flattened out and the RSI is also trading just above the midpoint, indicating a balance between supply and demand. Attempts by the bulls and bears to establish their supremacy have failed in recent days.
This balance may tilt in favor of the bulls if they can carry and sustain the price above the overhead resistance at $ 1.30. In such a case, the MIOTA / USD pair can rally to $ 1.554775.
On the other hand, If the bears drag the price below $ 0.90, a dip to the 50-day SMA ($ 0.74) is possible.
The 4-hour chart shows the formation of a symmetrical triangle, which generally acts as a continuation pattern. Both moving averages are gradually declining and the RSI is in negative territory, signaling that the advantage is for the bears.
The pair has fallen below the triangle support line, but the bulls are trying to stop the decline and drive the price back into the triangle. If they are successful, it will suggest purchases at the lower levels. The bulls will gain the upper hand after the pair remains above the triangle.
However, if the price turns lower from current levels, it may signal the start of a deeper correction.
Points of view and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and business move involves risks, you must do your own research when making a decision.