Bitcoin (BTC) is witnessing a see-saw battle near $40,000 with both the bulls and the bears trying to gain the upper hand. The volatility could remain high as the markets await the United States Federal Reserve’s policy decision due on March 16.
Analyst Willy Woo suggests that Bitcoin could witness a capitulation event based on a cost basis, a metric that indicates the transfer of Bitcoin from inexperienced to experienced traders. Such sharp declines usually suggest the formation of market bottoms.
However, Glassnode believes that a capitulation has been avoided because the sell-offs have been absorbed by a relatively strong market. Although 82% of the short-term holders' coins are in loss, Glassnode considers this to be a late-stage bear market behavior where investors hold their coins until they turn profitable.
Could the Fed’s policy decision start a trending move in Bitcoin and altcoins? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin turned down from the moving averages on March 15 but the long tail on the candlestick indicates strong demand at lower levels. The bulls continued their buying and have pushed the price above the 50-day simple moving average (SMA) ($40,151).
If bulls sustain the price above the 50-day SMA, the BTC/USDT pair could rally to the overhead zone between $45,400 and the resistance line of the ascending channel. The bears are expected to mount a strong defense in this zone.
If the price turns down from the overhead zone, the pair could extend its stay inside the channel for a few more days. The flat moving averages and the relative strength index (RSI) near the midpoint also suggest range-bound action is likely in the short term.
Contrary to this assumption, if the price turns down and plummets below the moving averages, it will suggest that bears continue to sell at higher levels. The bears will then try to sink the price below the support line of the channel and resume the downtrend.
Ether (ETH) bounced off the support line of the symmetrical triangle and the buyers are attempting to push the price above the 50-day SMA ($2,763).
If they succeed, the price could rise to the psychological level at $3,000 and then to the resistance line of the triangle. The bulls will have to push and sustain the price above the triangle to signal a possible change in trend.
The RSI has also formed a symmetrical triangle and a breakout from it could signal that buyers have the upper hand.
This bullish view will invalidate if the price turns down from the current level and breaks below the support line of the triangle. That could open the doors for a possible drop to $2,159.
The buyers are trying to push BNB above the moving averages but the bears are likely to have other plans. They will attempt to stall the recovery near the moving averages as they have done on the three previous occasions.
Both the moving averages are flattening out and the RSI has risen above 48, indicating that bulls are attempting a comeback. If buyers drive and sustain the price above the 50-day SMA ($388), the BNB/USDT pair could rise to $425 and thereafter to $445.
Contrary to this assumption, if the price turns down from the moving averages, it will suggest that the sentiment remains negative and traders are selling near resistance levels. The bears will then try to pull the price below the strong support at $350.
Ripple (XRP) turned down from the downtrend line on March 12 and dropped to the moving averages. Although the bulls have defended the moving averages, they have failed to achieve a strong rebound off it.
Both moving averages have flattened out and the RSI is near the midpoint, indicating a balance between supply and demand. The buyers will have to push and sustain the price above the downtrend line to gain the upper hand. The XRP/USDT pair could then rally to $0.91 and later to the psychological level at $1.
Conversely, if the price turns down and breaks below $0.69, the advantage will turn in favor of the bears. The pair could then slide to the strong support level at $0.62.
Terra’s LUNA token broke above the overhead resistance at $94 on March 14 but the bulls could not sustain the higher levels. The bears pulled the price back below $94 on March 15.
The bears will now try to pull and sustain the price below the 20-day exponential moving average (EMA) ($84). If they succeed, the LUNA/USDT pair could drop to $70. Such a move could suggest that the bullish momentum has weakened.
Contrary to this assumption, if the price rises from the current level or rebounds off the 20-day EMA, the buyers will again attempt to push the price toward $105. A break and close above this resistance could indicate the resumption of the uptrend. The pair could first rally to $115 and later to $125.
The bulls pushed Solana (SOL) back above the breakdown level at $81 on March 14, indicating that the recent breakdown on March 13 may have been a bear trap.
The buyers are attempting to push the price above the 20-day EMA ($86). If they manage to do that, the SOL/USDT pair could rally to the downtrend line. This is an important level to keep an eye on because a break and close above it will suggest a possible change in trend. The pair could then rally to the overhead resistance at $122.
This positive view will be invalidated in the short term if the price turns down from the 20-day EMA or the downtrend line and plummets below $77. Such a move could indicate the resumption of the downtrend and the pair may extend its decline to $66.
Cardano (ADA) is attempting to rise above the 20-day EMA ($0.85) but the bears are expected to mount a strong defense at the resistance.
If the price turns down from the current level, the ADA/USDT pair could drop to the strong support at $0.74. This is an important level for the bulls to defend because if it cracks, the pair could decline to the next support at $0.68.
Alternatively, if the price breaks and closes above the 20-day EMA, the pair could attempt a rally to the psychological level at $1. This level is likely to act as a strong resistance. If the price turns down from this resistance, the pair may remain range-bound between $1 and $0.74 for a few days.
Avalanche (AVAX) has been sustaining below the uptrend line since March 13 but the bears have not been able to capitalize on this weakness and sink the price below the immediate support at $64. This indicates a lack of sellers at lower levels.
The bulls are attempting to push the price back above the uptrend line and the moving averages. If they succeed, the AVAX/USDT pair could rise to the downtrend line of the descending channel. This is an important level to watch out for because the bears have successfully defended the resistance on four previous occasions.
If the price once again turns down from the downtrend line, it will suggest that the bears are in no mood to relent. The sellers will then try and pull the price back below $64.
Conversely, if bulls drive the price above the channel, it will suggest that the downtrend could be over. The pair could then rally to the psychological level at $100.
Polkadot (DOT) has been trading close to the 20-day EMA ($17) for the past two days, indicating that the bulls are buying the dips.
The flattish moving averages and the RSI near the midpoint suggest that the bears may be losing their grip. The bulls are again expected to attempt a rally above the overhead resistance at $19.
If they can pull it off, the DOT/USDT pair could rise to $23 where the bears may pose a strong challenge. A break and close above this level would complete a double bottom pattern.
This positive view will invalidate if the price turns down and breaks below the strong support at $16. That could drag the price down to $14.
Dogecoin (DOGE) turned down from the 20-day EMA ($0.12) on March 14, indicating that higher levels are witnessing strong selling by the bears.
One minor positive factor is that the bulls have not allowed the price to break below the strong support at $0.10. This could keep the DOGE/USDT pair range-bound between $0.12 and $0.10 for a few more days.
A break and close above the 20-day EMA could be the first sign that the selling pressure may be reducing. The bulls will then try to push the pair above the 50-day SMA ($0.13) and clear the path for a possible rally to $0.17.
Alternatively, if the price breaks below $0.10, the selling could intensify and the pair may drop to $0.06.
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.