The Wall Street Journal was informed by Jerome Powell, Chairman of the United States Federal Reserve, that the 50-basis point rate increases would continue until inflation is under control. Powell’s emphasis upon a hawkish approach suggests that monetary conditions will likely remain tight in 2022. This could limit upside for risky assets.
Glassnode, an on-chain market intelligence company, stated that Bitcoin (BTC), historically, has reached its bottom when the price falls below the realized price. But, except for the 2019-2020 bear market, Bitcoin’s value remained below the realized price during previous bear cycles. It was between 114 and 299 days. This indicates that Bitcoin’s price will not recover quickly if macro conditions are not favorable.
Everyday cryptocurrency market performance. Source: Coin360
The current fall in U.S. equity market and Bitcoin prices is similar to the March 2020 crash, but the recovery path may be different because markets are different. The Fed provided unprecedented support to the markets in 2020 with unprecedented stimulus. However, in 2022, the Fed will continue to focus on decreasing inflation and tightening monetary policy.
Will Bitcoin and altcoins revert to their downtrend? Or will lower prices attract buyers? Let’s look at the charts for the top 10 cryptocurrencies to see what happens.
Bitcoin’s recovery did not surpass the 38.2% Fibonacci Retracement Level at $31,721 which suggests that the trend is still negative and that traders are selling on minor rallies.
Daily chart of BTC/USDT Source: TradingView
The BTC/USDT currency pair could fall to $28,630 as the support. The pair could hold steady between $28,630 to $31,721 if the price recovers from this level.
The first sign that there is a possible trend shift will be if the pair breaks and closes above the 20-day exponentially moving average (EMA), ($32,979). The pair could rally to the $34,823 61.8% level of retracement.
The bears will attempt to consolidate their position by pulling the pair down below $26,700 if the price falls below $28,630. The pair could slide to $25,000, and then to $21,800 if the negative momentum continues.
Short-term traders may have been tempted to book profits by Ether (ETH’s) failure to surpass the overhead resistance at 2,159. The price fell below $1,940. However, the bulls are trying to protect the level.
Daily chart of ETH/USDT Source: TradingView
The ETH/USDT pair may rise again to $2,159 if the price recovers from $1,940. To clear the way for a rally towards the 20-day EMA ($2,353), the bulls must push the price higher than $2159. If the market breaks or closes above this resistance, it will indicate that the markets have rejected lower levels.
If bears maintain the price below $1940, the pair may fall to the critical support at $1700. It is important to monitor this level as panic selling could occur if it falls below. The pair could fall to $1500, and then to $1300.
BNB has not been able the bulls to push it above $320 overhead resistance. This shows that the bears aren’t giving up, and they continue selling at higher levels.
Daily chart BNB/USDT TradingView
The BNB/USDT pairing could fall to $265 if the price falls below $290. This level will likely act as a strong support, but bears could pull the price lower than it. The next stop could be at $211. To signal the beginning of the next downtrend, the bears must break this level.
If the price bounces off $265, it could indicate that bulls are trying to form a bottom. This could mean that the pair will remain between $320-$265 for a few more days. The pair could have reached its bottom if they break or close below $320.
Ripple (XRP’s) recovery failed above $0.45, which indicates a lackluster demand at higher levels. The bears are now trying to push the price lower than the $0.40-$0.88 support zone.
Daily chart of XRP/USDT Source: TradingView
The XRP/USDT exchange rate could fall to $0.33 if they do. This level is important to watch as a break or close below could signal the resumption the downtrend. The XRP/UDST pairing could then fall to $0.24.
The bulls will attempt to push the pair higher if the price increases from $0.38 or $0.33. The pair could reach the $0.50-$0.55 overhead resistance zone if they succeed. To signal that the downtrend is over, the bulls must clear this hurdle.
Cardano (ADA), has been trading in a narrow range of $0.61 to $0.51 over the past few days. This indicates a difficult battle between bulls and bears.
Daily chart ADA/USDT Source: TradingView
The ADA/USDT currency pair could slip to $0.46- $0.40 if the price falls below $0.51. This zone may be defended by the bulls. If the price bounces off of this zone, buyers will attempt to push the pair higher than the 20-day EMA. The pair could reach $0.74 if they succeed.
If the price falls below $0.40, selling could gain momentum, and the pair might extend its fall to $0.33, and then to $0.28.
Solana (SOL), which is located near the 38.2% Fibonacci level of retracement at $59, is experiencing strong resistance. This suggests that the sentiment remains negative and that bears are selling on minor rallies.
Daily chart of SOL/USDT Source: TradingView
The pair could slide to $43 if the price falls below $50. After that, it could fall to $37. This level is likely to be defended by bulls as if it gives way the downtrend could resume. The $32 mark could be the next stop for the downside.
If the price rises from its current level and reaches $59, then the SOL/USDT currency pair could rally to the overhead support zone between the 20 day EMA ($67 and $75). If the price breaks or closes above this zone, it could signal that the downtrend is over.
Dogecoin (DOGE), continues to trade below $0.10 at breakeven. This indicates that there is not much urgency to buy higher levels. In general, sharp falls are followed by consolidations when bulls and bears fight it out for supremacy.
Daily chart of DOGE/USDT Source: TradingView
Failure by the bulls to push it above $0.10 could lead to another round of selling from the bears, who may attempt to reestablish the downtrend. The DOGE/USDT exchange rate could fall to $0.06 if the price falls below $0.08. This support could crack, and the price decline could continue to $0.04.
The opposite is true. If the price bounces off $0.08, it may rise to $0.10, and stay within this range for a few more days. To indicate that downward momentum is weakening, the bulls will need to push the price higher than the 20-day EMA ($0.10).
Related: Aave Price Risks a 25% Drop as a Bearish Reversal Pattern Emerges
Although the bulls held the $10.37 support level on May 17, the weak rebound indicated that there was not enough demand at higher levels. On May 18, the bears recommenced selling and brought the price down to $10.37. Polkadot (DOT), could drop to $8.
Daily chart of DOT/USDT Source: TradingView
Buyers are expected to defend the $8-$7.30 zone aggressively. The DOT/USDT pair may attempt to regain support if the price bounces off the zone. A break above the $20-day EMA ($12.53) could help to accelerate the recovery.
If bears drop below $7.30, selling could accelerate, and the pair might signal the resumption or continuation of the downtrend. The pair could fall to psychological support at $5.
Avalanche, (AVAX), was not able to push buyers above its immediate resistance of $38. This indicates that the demand is drying up at higher levels.
Daily chart of AVAX/USDT Source: TradingView
The bears will be ecstatic about their chances and try to push the price below $29. The AVAX/USDT pair may retest the $23.51 intraday low on May 12. Breaking and closing below this level could lead to a further decline of $20, and then to $18.
Contrary to the assumption, bulls will attempt to push the pair higher than $38 if the price rebounded off $29 The relief rally could reach the $20-day EMA (45). This level could be again a challenge for bears.
For the past four days, Shiba Inu’s (SHIB), has been consolidating within the tight range of $0.000011 to $0.000014. These tight ranges usually resolve in strong trending moves.
Daily chart of SHIB/USDT TradingView
The bears will attempt to lower the SHIB/USDT price to $0.000009 if the price falls below $0.000011. The bulls must defend this level as a signal that the downtrend could be resuming. The pair could fall to $0.000007, and then to $0.000005 later.
Contrary to what is being assumed, if the price rises and breaks above the 38.2% Fibonacci level at $0.000014 the bulls will push the pair towards the $0.000017 level.
Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.
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Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.