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Bitcoin (bitcoin) and most major altcoins are struggling to find a bottom, suggesting traders are selling their positions out of fear. The big question on everyone’s mind is whether the sell-off is over, or will it continue to fall?
Dylan LeClair, senior analyst at UTXO Management, emphasized that the network cost basis, the average price of the last time various investors moved Bitcoin, was $24,000, and historically, Cost basis to price ratio has fallen below 1.0.
If history were to repeat itself, according to this indicator, Bitcoin may have to fall further to make it an attractive buy.
Long-term investors don’t appear to be disturbed by Bitcoin’s recent correction. Glassnode data shows that investors continue to withdraw their coins to cold storage.
Lex Moskovski, chief investment officer at Moskovski Capital, said: “Bitcoin’s illiquid supply is increasing.
Bitcoin and most major altcoins are nearing strong support levels. Can investors use their opportunity to buy or will the bears prevail? Let’s study the chart of the top 10 cryptocurrencies to find out.
Bitcoin/USDT
Bitcoin has been trading below the $39,600 to $37,332.70 area for the past two days. Buyers attempted a rebound on Jan. 23, but were unable to even challenge overhead resistance at $37,332.70. This indicates weak demand at higher levels.
Another sell-off on Jan. 24 saw bears drag the BTC/USDT pair below the Jan. 22 intraday low of $34,008. The next support on the downside is the key area between $30,000 and $28,805.
Oversold levels on the Relative Strength Index (RSI) suggest that the sell-off may be overdone in the short-term. This could attract buying from traders near the support zone. If the price bounces off this area, the bulls will try to push the pair above $39,600.
A breakout and close above the 20-day exponential moving average (EMA) ($40,835) will be the first sign that the bears may be losing control. A trend change could be signaled after the price rises and sustains above the 50-day simple moving average (SMA) ($45,404).
ETH/USDT
Ether (Ethereum) plummeted and closed below the descending channel on January 21, indicating increased selling pressure. The bulls attempted to push the price back into the channel on January 23, but failed.
This reignited selling pressure on Jan. 24, with bears pulling prices below Jan. 22’s intraday low of $2,300. The ETH/USDT pair may now drop to the psychological $2,000 level, where buyers are likely to offer support.
If the price bounces off this level, the bulls will make another attempt to push the price back into the channel. If they are successful, the pair could rise to the $2,652 breakdown level. Conversely, if the price breaks below $2,000, the pair could drop to the next major support at $1,700.
BNB/USDT
Binance Coin (BNB) fell below the support line of the descending channel on January 21, and the subsequent sell-off on January 22 pulled the price towards the strong support area of $330-$320.
Buyers attempted a rebound on January 23, but the bears did not allow the price to re-enter the channel. This shows that the bears are defending the support line of the channel. Selling resumed on January 24 and the bears will try to push the price below the support zone.
If the price sustains below $320, the BNB/USDT pair could slide to $254.50 before falling to the next support at $225.40. The first sign of strength will be a breakout and closure within the channel. The pair may then try to rally to the 20-day EMA ($443).
ADA/USDT
Cardano (have) fell below strong support at $1 on Jan. 22, but the long tail on the candlestick suggests that bulls bought the dip and managed to hold that level.
A small negative, however, is that the $1 rally can’t even reach the 20-day EMA ($1.24). This suggests that the bears are bouncing back slightly rather than waiting for higher levels to sell.
The bears pulled the price below $1 again on January 24. If they sustain ADA/USDT below this level, the selling momentum could pick up. The pair could then drop to $0.80 and then to the support line of the channel.
Sol/USDT
Solana (Sol) after plunging below the support at $116 on Jan. 21, and the price reached the support line of the descending channel on Jan. 22. Although the bulls defended this level, they were unable to push the price to the $116 breakdown level. This suggests that buying has dried up at higher levels.
The bears resumed selling on January 24 and attempted to sink the SOL/USDT pair below the support line of the channel. If they are successful, selling momentum could gain momentum and the pair could drop to $66 and then $58.
The constant sell-off over the past few days has pushed the RSI below 22. This suggests that the sell-off may be overdone in the short-term, and a rally could be in the offing. The first level on the upside is $116, followed by the 20-day EMA ($131).
Ripple/USDT
ripple (Ripple) on Jan. 22 fell below Dec. 4’s intraday low of $0.60. The bulls attempted to start a rally on January 23, but failed to find any takers at higher levels.
Selling resumed on January 24 and the bears are attempting to pull the price to the psychological $0.50 level. This is an important support defended by the bulls, as if it breaks, the XRP/USDT pair could drop to $0.39.
Contrary to this assumption, if the price bounces off the $0.50 support, the bulls will try to push the pair above the 20-day EMA ($0.72). A breakout and close above this resistance could indicate that selling pressure may be diminishing.
Moon/USDT
Terra’s Luna The coin bounced off the support line of the descending channel on Jan. 22, but rallied to a high of $70.22 on Jan. 23. This shows that the bears have not given up and are aggressively selling at higher levels.
The moving averages have completed a bearish crossover and the RSI is in negative territory, suggesting that bears have the upper hand. Sellers will now try to pull the price to the support line.
If the price bounces off this line again, the probability of a return to the downtrend line increases. Alternatively, if the bears sink and sustain the price below the channel, selling could intensify and the pair could plummet to $37.82.
related: Bitcoin ‘enters value zone’ as BTC price floor indicator turns green again
Dogecoin/USDT
Dogecoin (Governor) fell below strong support at $0.13 on Jan. 22, but a long tail on the candlestick suggests buying at lower levels. Buyers attempted to start a recovery on Jan. 23, but higher levels attracted selling.
Prices fell on January 24 and the bears are attempting to pull the DOGE/USDT pair lower and hold below the $0.13 support. If they are successful, the pair could start sliding towards the psychological level of $0.10.
Contrary to this assumption, if the price rises from current levels, the bulls will make another attempt to push the pair above the 20-day EMA ($0.15). A breakout and close above the 50-day EMA ($0.16) could put the $0.13 to $0.19 range into play.
Points/USDT
polka dot(point) fell below key support at $22.66 on Jan. 21 and reached the next support at $16.81 on Jan. 22. Although the bulls defended this level, they were unable to extend the relief rally of Jan. 23. This indicates a lack of higher demand levels.
The bears resumed selling on January 24 and attempted to keep the DOT/USDT pair below $16.81. If they do, the pair could extend losses to the next major support at $10.37.
The sharp sell-off over the past few days has pushed the RSI into oversold territory. This suggests that the sell-off may be overdone in the short-term, and a relief rally may occur.
If the price rises from current levels and rises above $19.20, the pair could rally to $22.66.
AVAX / USDT
avalanche(AVAX) completed a bearish descending triangle pattern after plummeting and closing below support at $75.50 on Jan. 21. The bulls defended the $51.04 support on Jan. 22, but were unable to push the price higher and sustain above the 200-day SMA ($65) on Jan. 23.
This suggests that the bears continue to sell in a small rally. As of January 24, the bears have resumed selling and will attempt to pull the AVAX/USDT pair below the strong support area of $51.04 to $47.66. If they succeed, the pair could plummet to $32.23.
Conversely, if the price bounces off the support area, it will indicate accumulation at lower levels. The bulls will then attempt to push the pair to the $75.50 breakdown level, which is an important level to watch.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading action involves risk. You should do your own research when making a decision.
Market data provided by bitcoin exchange.
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