Bitcoin is threatening to break the narrow range to the downside. The cryptocurrency markets seem to be taking cues from the United States equities markets, which have been down for two straight days due to the uncertainty regarding the debt ceiling negotiations.
If the debt ceiling talks stretch further, traders may lighten their positions from risky assets, as a debt default by the U.S. is likely to have huge financial implications around the world. Even cryptocurrencies could witness a sell-off, and analysts have not ruled out a potential fall to $20,000 for Bitcoin (BTC).
Institutional investors maintained their cautious stance in the near term. CoinShares’ “Digital Asset Fund Flows Report” published on May 22 shows an outflow of $32 million, taking the total outflow in the past five weeks to $232 million.
Although the near term is uncertain, traders should be ready for a sharp reversal in price if the debt ceiling negotiations are fruitful. What are the important support and resistance levels on Bitcoin and major altcoins that will signal the start of a trending move? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin price analysis
Bitcoin reached the 20-day exponential moving average (EMA) of $27,278 on May 23, but the bulls could not pierce this resistance. The failure to do that attracted aggressive selling by the bears on May 24.
The bears are trying to sustain the price below the immediate support at $26,631. If they are successful, the BTC/USDT pair could plummet to the vital support at $25,250. This level may again witness a tough battle between the bulls and the bears.
If the bears come out on top, the selling could intensify, and the pair may collapse to the psychologically important level of $20,000.
The 20-day EMA remains the key resistance for the bulls to conquer if they want to start a sustained recovery. A short-term trend change is likely to be signaled after the bulls kick the price above the resistance line.
Ether price analysis
Ether (ETH) surged above the 20-day EMA ($1,830) on May 23, but the bulls could not continue the up move on May 24.
The bears pulled the price back below the 20-day EMA on May 24. This suggests that the ETH/USDT pair may continue to trade inside the falling wedge pattern for a few more days.
A break below the wedge will indicate the start of a deeper correction. The first support on the downside is $1,600, but if this level fails to hold, the pair may slump to $1,352.
Conversely, if the price turns up and breaks above the wedge, it will signal the start of a new up move. The pair could first rise to $2,000 and thereafter to $2,200.
BNB price analysis
BNB (BNB) reached the 20-day EMA ($313) on May 23, but the bulls could not overcome this obstacle. That may have attracted selling from the aggressive bears on May 24.
Sellers will try to build upon their dominance by pulling the price below the psychological support at $300. The next level to watch on the downside is the support line of the descending channel pattern. If this level crumbles, the BNB/USDT pair may nosedive to $280.
Alternatively, if the price turns up from the current level or rebounds off the support line, it will suggest buying at lower levels. The bulls will then try to kick the price above the 20-day EMA and challenge the resistance line.
XRP price analysis
After trading between the moving averages for the past few days, XRP (XRP) slipped below the 20-day EMA ($0.45) on May 24.
If bears sustain the price below the 20-day EMA, several short-term bulls may dump their positions. That could send the price tumbling to the crucial support at $0.40. Buyers are likely to defend this level aggressively because if they fail to do that, the XRP/USDT pair may plunge to $0.36.
This negative view could invalidate in the near term if the price turns up from the current level and breaks above the 50-day simple moving average (SMA) at $0.47. That could clear the path for a possible rally to $0.54 and thereafter to $0.58.
Cardano price analysis
Cardano’s (ADA) bounce off the uptrend line on May 22 reversed direction from the 20-day EMA ($0.37) on May 24, indicating that bears are trying to seize control.
The bears will try to tug the price below the uptrend line. If they do that, it will invalidate the bullish ascending triangle pattern. The ADA/USDT pair could then start a deeper correction toward $0.30.
Time is running out for the bulls. If they want to prevent the decline, they will have to quickly propel the price above the 20-day EMA. The pair could then rise to the 50-day SMA ($0.39), which could act as a strong barrier. A break above this level will open the doors for a potential rally to $0.44.
Dogecoin price analysis
The bulls failed to thrust Dogecoin (DOGE) above the 20-day EMA ($0.07) on May 22 and 23, indicating that the sentiment remains negative and rallies are being sold into.
The bears will try to yank the price below the immediate support at $0.07. If they succeed, it will suggest the start of the next leg of the downward move. The DOGE/USDT pair could descend to the next support at $0.06.
Contrary to this assumption, if the price turns up from $0.07, it will suggest strong buying on dips. A break and close above the 50-day SMA ($0.08) will indicate that the pair may continue to oscillate between $0.11 and $0.07 for a while longer.
Polygon price analysis
Polygon’s (MATIC) recovery met with solid resistance at the 20-day EMA ($0.89). This indicates that the bears are selling on every minor rise.
The downsloping moving averages and the relative strength index (RSI) in the negative territory increase the likelihood of a break below $0.82. If that happens, the MATIC/USDT pair could slump to the strong support at $0.69.
Instead, if the price turns up from the current level or the support at $0.82, it will signal demand at lower levels. A rally above the $0.91 to $0.94 zone will indicate the start of a sustained recovery, which may reach the downtrend line.
Solana price analysis
The bulls pushed Solana (SOL) above the breakdown level of $19.85 on May 23, but they could not sustain the higher levels. This shows that the bears continue to sell on minor relief rallies.
The bears pulled the price near the vital support at $18.70 on May 24. This level is likely to attract buyers, but if the subsequent bounce fails to break above $20, the SOL/USDT pair may extend its drop to $16.
On the upside, a break and close above the 20-day EMA ($20.57) will be the first sign of strength. It will indicate that the selling pressure is reducing. The pair may then attempt a rally to $24.
Polkadot price analysis
The bears sold the recovery to the 20-day EMA ($5.43) on May 23, indicating that they are not willing to let go of their advantage in Polkadot (DOT).
The downsloping 20-day EMA and the RSI in the negative territory indicate that the path of least resistance is to the downside. Sellers will try to strengthen their position further by pulling the price below the $5.15 support.
If they manage to do that, the DOT/USDT pair could start the next leg of the down move toward $4.22. If bears want to prevent the decline, they will have to quickly propel the price above the 20-day EMA. That may trigger a rally to the 50-day SMA ($5.86).
Litecoin price analysis
Litecoin (LTC) turned down sharply and broke below the moving averages on May 24, indicating that the bears have overpowered the bulls.
The bears will next try to pull the price to the strong support at $75. This level is likely to attract strong buying by the bulls. If the price rebounds off $75, it will signal that the LTC/USDT pair could stay range-bound between $75 to $96 for a while longer.
A break above or below this range could start the next trending move. If bears sink the price below $75, the pair could slide to $65. Contrarily, if buyers start a recovery and propel the price above $96, it will suggest the start of an up move to $106.
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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.