Investors around the globe are waiting to see the outcome of the Federal Open Market Committee meeting held on May 4. Markets expect a rate increase of 50 basis points and an announcement from the Fed that it will begin shrinking its balance sheets starting in June. However, it is hard to predict how markets will react.
Paul Tudor Jones, a billionaire investor, stated that the United States was in “uncharted territory” because rates were rising when the Financial Conditions Index was tightening. Tudor Jones warned investors that this was “going to very, very bad” for stocks and bonds. He said that the current environment was not good for financial assets.
Everyday cryptocurrency market performance. Source: Coin360
Some investors are reducing their crypto exposure due to uncertainty. According to CoinShares, this led to $132.7 million in weekly outflows from Bitcoin (BTC), funds last week. This was the largest amount since June last year.
Are Bitcoin and other altcoins heading for a period in capitulation? Or will investors continue to buy them after the Fed event ends? Let’s look at the charts of the top 10 cryptocurrencies to see which levels are most important to be aware of on both the upside and downside.
Positive sign is that the bulls have successfully defended support lines of the ascending channel over the past four days. The bears could be losing their grip if buyers push the price higher than the 20-day exponential moving Average (EMA) ($39553).
Daily chart of BTC/USDT Source: TradingView
The BTC/USDT exchange could rally to the SMA (50-day simple moving average) of $41,922. This level could act as resistance again, but bulls can overcome it and the pair could rally towards the 200-day SMA ($46.924).
Contrary to the assumption, if the price falls below the 20-day EMA and the 50-day SMA it will indicate that bears are continuing to sell rallies. The channel support line could be retested by the pair.
Breaking and closing below the channel could lead to a further drop to $34,300, and then to $32,917.
Ether (ETH), tried to surpass the 20-day EMA ($2,920), on May 2, but was unsuccessful. The bulls didn’t lose much ground and they are trying again to clear the overhead hurdle. This is a minor positive.
Daily chart of ETH/USDT Source: TradingView
The ETH/USDT price could rise to the 50-day SMA ($3,069) if buyers push the price higher than the 20-day EMA. To signal a change in the trend, the bulls must push the price higher than this level. The price could rise to the 200 day SMA ($3,441) An uptrend could be initiated if the pair breaks or closes above this level.
However, if the price drops below the 20-day EMA it will indicate that bears aren’t willing to give up on their advantage. This could increase the chances of the pair breaking below the uptrend line. The pair could plunge to $2,450 if that happens.
BNB traded below $391 support over the past four trading days, but the bears couldn’t capitalize on this advantage to bring the price down to $350. This suggests that sellers are not available at lower levels.
Daily chart BNB/USDT TradingView
Bulls are trying to push the price higher than the $391 resistance. The BNB/USDT pair could reach the 50-day SMA (412). Buyers could benefit from a break or close above this resistance. The SMA (200-day) could be reached by the pair ($468).
If the overhead resistance is breached and the price falls below $375, this positive outlook could be invalidated. This will signal renewed selling, and could bring the pair down to $350.
Solana (SOL), is finding buying support at $82, but the bulls are not able to push the price higher than the 20-day EMA ($96). This indicates that demand is drying up at higher levels.
Daily chart of SOL/USDT Source: TradingView
The bears will attempt to lower the SOL/USDT price below $75 if the price does not rise above the 20 day EMA. This level is important to monitor as a downtrend could recur if it cracks. The $66 support is the next level of resistance.
Contrary to popular belief, if bulls push prices above the 20-day EMA it will indicate that selling pressure is decreasing. The pair could rise to $111, and then extend its stay within the large range of $75-$143.
For the past few days, Ripple (XRP), has been stuck in a wide range between $0.55 to $0.91. The bulls are trying to overcome $0.62, which was $0.56 lower on April 30.
Daily chart of XRP/USDT Source: TradingView
The 20-day EMA ($0.67) could be reached if the price holds above $0.62. This level could act as a strong resistance. The bears will attempt to sink the XRP/USDT pairs to $0.55 if the price falls below the 20-day EMA. If the price breaks or closes below this support, the pair could reach the psychological level of $0.50.
Contrary to popular belief, if bulls push the price above the 20 day EMA, the pair may rally to the 50-day SMA ($0.75). This will indicate that the pair could spend more time within the large range.
Terra’s LUNA token rose to the $20-day EMA ($87), Wednesday, but the candlestick’s long wick suggests that bears are still selling on rallies.
Daily chart of LUNA/USDT Source: TradingView
Now, the sellers will try to push the price towards the strong support zone of $75 to the 200-day SMA ($71). The LUNA/USDT pair could form a bearish head-and-shoulders pattern if this zone is broken. This signals a possible trend shift. This could signal a possible downward trend towards $50.
Or, bulls pushing and maintaining the price above the downtrendline could indicate that the short-term correction phase is over. The psychological resistance of $100 could be reached. Breaking and closing above this level could open the way for a possible retest at the $119 all-time high.
The support was held by Cardano (ADA), which traded close to $0.74 over the past few trading days. This indicates that the bulls were aggressively defending the support.
Daily chart ADA/USDT Source: TradingView
The ADA/USDT currency pair may now rebound to the $20-day EMA ($0.86), where bears could again mount a strong resistance. The sellers will attempt to bring the pair below $0.74 if the price falls below the 20-day EMA. The pair could begin the next leg of its downward slide to $0.68 if they succeed.
If bulls push the price higher than the 20-day EMA, then the pair may attempt a rally to $1. Bulls could be back if the price breaks and closes above this level.
Related: Ethereum sees a mini breakout above $3K, as Coinbase ETH Outflows Hit a New Record
Dogecoin (DOGE), although trading below the moving averages over the last few days, has not been able challenge the support at $0.12. This indicates that there are not many sellers at lower levels.
Daily chart of DOGE/USDT Source: TradingView
Bulls will attempt to push the price higher than the 20-day EMA ($0.13). The DOGE/USDT pair may rise to $0.15 if they succeed. After that, they will attempt to rally to the $0.17 overhead resistance. The bears must defend this level as a break or close above it could signal a new uptrend.
If the price drops below the 20-day EMA, bears will be happy to try and sink the pair below $0.12. The pair could slip to $0.10 psychological support if that happens.
Avalanche (AVAX), is trading within a wide range between $51 to $99. Bulls bought the dip to $55 April 30, but have not been in a position to push the price higher than the breakdown level of $65.
Daily chart of AVAX/USDT Source: TradingView
If the price drops below $65, it will indicate that sentiment is negative and bears continue to sell on rallies. The bears will attempt to lower the AVAX/USDT price pair below $51 as a strong support. If they succeed, the pair may begin the next leg in the downtrend that could lead to a drop to $32.
If bulls continue to drive the price higher than the 20-day EMA ($68), this negative view may be invalidated in the short-term. The pair could then reach the 50-day SMA (80).
Polkadot is downtrend-bound and range-bound. While the bulls defend the $14 support, the bears sell on rallies up to $16. This tight-range trading will not last long.
Daily chart of DOT/USDT Source: TradingView
If buyers push the price higher than $16, the DOT/USDT pairing will try to climb above the 20-day EMA ($16.86). It could indicate that bears are losing their grip. The bears could attempt to halt the recovery by raising the overhead resistance at $19.
The pair could also spend more time within the range if it falls below the overhead resistance. To signal the resumption or continuation of the downtrend, the bears must sink below $14.
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.