The Dow Jones Industrial Average, which had been in decline for eight consecutive weeks, rebounded strongly last week and finished 6.2% higher. Bitcoin (BTC), however, has not been in a position to match the performance of US equities markets. It is now threatening to put out a red candle for the ninth consecutive week.
Positive news is the fact that Bitcoin whales are buying market corrections. Glassnode data has shown that the number Bitcoin whale wallets holding a balance of at least 10,000 Bitcoin has increased to its highest point since February 2021. Their long-term outlook for Bitcoin is bullish, as evidenced by the accumulation in their whale wallets.
Daily view of crypto market data. Source:Coin360
Blockware Solutions pointed out that the Mayer Multiple metric, which measures the 200-day simple movement average and the current price, was languishing at “near some the lowest readings ever recorded.” There are also other indicators that suggest that Bitcoin may be attempting to reach a bottom.
Bitcoin will likely start a short-term recovery, and other altcoins will likely follow suit. Let’s look at the charts of top-5 cryptocurrencies that could lead the relief rally.
Bitcoin is still stuck in a tight range, between the downtrend line at $28,630 and the support at $28,630. On May 26, and May 27, the bears managed to pull the price down below $28,630, but it was not able to sustain lower levels. The price rebounded on May 28.
Daily chart of BTC/USDT Source: TradingView
Bulls will attempt to push the price higher than the downtrend line, and challenge the 20 day exponential moving average ($30.538). If they succeed, the BTC/USDT pairing could gain momentum and reach the 50-day SMA ($35,000.
Positive divergence in the relative strength indicator (RSI), suggests that bearish momentum may be weakening, and that a rally could be just around the corner.
The bears will attempt to lower the pair below $28,630 if the overhead resistance is broken. The pair will form a bearish descending triangle pattern if they achieve that target at $24,601.
BTC/USDT 4-hour chart. TradingView
The 20-EMA has flattened and the 50 SMA on the 4-hour chart are now at the middle of the spectrum. This suggests a balance between supply/demand.
The negative descending triangle pattern of the downtrend line will be broken if bulls push the price higher than the downtrend. This could lead to a short squeeze, as short-term bears might close their positions. This could open the way for a rally towards the 200-SMA.
If the price falls below $28,630, the bears will win. This could lead to a retest at $26,700 of the critical support.
Ethereum (ETH), has been in a downtrend, but the bulls are trying to halt the decline at the critical support of $1700. The price recovered from this support on May 28, and the bulls are trying to continue the recovery on May 29,
Daily chart of ETH/USDT Source: TradingView
The RSI has formed a bullish divergence which indicates that the downtrend could be weakening. The overhead resistance of $2,159 could be reached if bulls push the price higher than the 20-day EMA ($2,036). This level is expected to be defended aggressively by the bears. The pair could remain range bound between $2,159 to $1,700 for a few more days if the price falls below this resistance.
The bears will attempt to lower the pair below $1700 if the price falls below the current level or 20-day EMA. The pair could resume its downward trend if they succeed with $1,300 as the next major support.
ETH/USDT 4-hour chart. Source: TradingView
The 20-EMA is where bears could mount a strong defense after the bounce from $1,700 support. The chances of the price falling below $1,700 could increase if the price falls from this level. The downtrend could resume if that happens.
The reverse could be true. If bulls push the price higher than the 20-EMA, it may reach the 50-SMA. The resistance level at this level could be a barrier again, but bulls can overcome it and the pair could rally to psychological resistance at $2,000.
Tezos (XTZ), is in a downtrend and consolidating. Bulls pushed the price higher than the 20-day EMA ($2) May 24, but they were unable to sustain the recovery. On May 26, the price fell below the 20-day EMA.
Daily chart of XTZ/USDT Source: TradingView
The 20-day EMA has been flattening and the RSI is at 46. This suggests that selling pressure is decreasing. The XTZ/USDT price could rise to the 50-day SMA ($2.45) if bulls push it above the 20-day EMA. If resistance gives way, buyers will try to push the price higher than the uptrend line.
If the price drops below the current level, it will indicate that bears will continue to defend the 20 day EMA. The sellers will attempt to lower the pair to $1.75, which could lead to a fall to $1.64.
XTZ/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the price recovered from the 200 SMA, but it bounced back off the uptrend line. Bulls have lifted the price above 50 SMA and will now try to overcome the overhead hurdle at 200-SMA. It will signal the beginning of a short-term upward-move if they succeed.
The pair could also drop to the uptrendline if it falls below the 200-SMA or current level. The price could drop to $1.61 if it breaks and closes below this support.
Related: Bitcoin will set a new 9-week record for losing streak, with the BTC price dropping 22% in May
KuCoin Token, (KCS), broke above the 20 day EMA ($15.61), but the bulls couldn’t push the price higher than the 50-day SMA ($17.19). Short-term traders may have been tempted to book profits by this, and the price fell below the 20-day EMA again on May 26.
Daily chart of KCS/USDT Source: TradingView
The bears were unable to capitalize on their advantage and keep the price below 20-day EMA. This indicates strong buying by bulls at lower levels. On May 29, the buyers pushed the price above the 20 day EMA.
Bulls should keep the price above the 20 day EMA. If that happens, there is a possibility of a break below the 50-day SMA. The KCS/USDT pair could rally to $18.44, and then to the 200 day SMA ($19.63).
Contrary to popular belief, a decline in the price from its current level will indicate that traders are buying rallies. Breaking below $14.92 could lead to a further drop to $12.90.
KCS/USDT 4-hour chart. Source: TradingView
Although the pair has faced stiff resistance at 200-SMA, the small correction suggests that bulls are buying in minor dips. The next stop for bulls is $17.14. If they push the price higher than the 200-SMA, it could be $17.14. The next leg of the up-move could begin with a break and close above the 200-SMA.
If the overhead resistance is overcome, bears could pull the pair to the 38.2% Fibonacci level at $14.20, and then to the 50% level at $13.30. This area is expected to provide strong support.
AAVE rallied to $1101 at the 20-day EMA on May 23, but bulls couldn’t push it above that level. This indicates that bears are continuing to defend the level aggressively, but it is a minor plus that buyers have not lost much ground.
Daily chart AAVE/USDT TradingView
The price rises above the 20-day EMA and signals the beginning of a stronger relief rally. The AAVE/USDT pairing could rally to the 50 day SMA ($132), where bears might again mount a strong defense.
The short-term bulls could also close their positions if the price falls below the current level, or the 20-day EMA, and falls below $89 This could bring the price down to $79, and then to $64.
AAVE/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the pair oscillating between $90 to $110 for some time. The 20-EMA is flattish, the 50-SMA is flattish, and the RSI just above the middlepoint. This suggests a balance between supply/demand.
If buyers push the price higher than $110, this equilibrium could be tilted in their favor. The pair could rise to $130, then $143. The bears will win if the price falls below $90. This could lead to a decline in the pair to $80, and then to $70.
You should research all aspects of trading and investment before making any decision.
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.