US stock markets posted their worst performance of 2023 when worried investors dumped shares on February 21 fearing the US Federal Reserve would continue to raise rates.
Although the cryptocurrency markets also gave back some of the gains, the decline was relatively moderate. UTXO Management senior analyst Dylan LeClair said that Bitcoin’s (BTC) correlation with the S&P 500 index has fallen to its lowest level since late 2021.
After the strong recovery from the lows, data from Glassnode showed that only 21% of the coins sent by long-term holders to exchanges earlier this week moved at a loss. That’s a big improvement from mid-January, when 56% of LTH coins shipped to exchanges moved at a loss.
The decoupling of the US and crypto stock markets is a positive sign, but traders should remain cautious. If stocks drop sharply and a risk-off sentiment develops, the crypto rally may find it difficult to continue its gains.
What are the important levels that could stop the correction in Bitcoin and altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.
USDT/BTC
Bitcoin faced another rejection at $25,211 on Feb. 21, which may have tempted short-term bulls to give up and book profits. That could take the price to the first major support at the 20-day exponential moving average ($23,364).
In an uptrend, the buyers try to protect the 20-day EMA and then the 50-day simple moving average ($21,772). If the price bounces off the 20 day EMA, it will indicate that the bulls are not waiting for a deeper correction to buy. That may improve the prospects for a rally above $25,250.
Conversely, if the price dips below the 20 day EMA, it will suggest that traders are rushing out. That could result in a drop to the 50-day SMA. The BTC/USDT pair may attempt a bounce again, but on the way up, the 20 day EMA may present a strong challenge.
The short-term trend could tilt in favor of the bears if the price closes below the crucial support at $21,480.
EUR/USDT
Although Ether (ETH) has been above the $1,680 level since Feb. 17, the bulls were unable to clear the overhead hurdle at $1,743. That may have attracted selling from short-term traders.
The price turned lower on February 21 and fell back below the breakout level of $1,680. The sellers will now try to take advantage of this advantage and pull the price below the 50-day SMA ($1,550).
If they manage to do that, the ETH/USDT pair could fall to the immediate support at $1,461. The bulls are expected to defend this level vigorously because if this support gives way, the pair can slide to $1,352.
The bulls will have a chance if they quickly push the price above $1,680. Such a move will indicate aggressive buying on minor dips. A break above $1,743 could start the next leg of the move up to $2,000.
USD/USDT
Even after repeated attempts, the bulls were unable to push BNB (BNB) above the overhead resistance of $318 in recent days. This indicates that the bears are fiercely defending the $318 level.
The bears will try to increase their advantage by sinking the price below the 50-day SMA ($306). If successful, the BNB/USDT pair could turn towards the next major support at $280. If the price bounces off this level, the pair can range from $318 to $280 for a few days.
The flat 20 day EMA and the RSI near the midpoint also indicate a short-term range-bound action. The bulls will have to push the price above $318 to gain an advantage.
USD/XRP
XRP (XRP) continues to trade within the descending channel pattern. The bears thwarted the efforts of the bulls to push the price above the resistance line on February 20.
The 20-day EMA ($0.39) has leveled off and the RSI is near the center, which suggests a balance between supply and demand. If the price falls below the moving averages, the bears will try to push the price to the crucial support of $0.36.
Alternatively, if the price rises from the current level and breaks above the channel, it will suggest an advantage for the bulls. The XRP/USDT pair may then attempt a rally to $0.43, where the bears are likely to mount stiff resistance.
ADA/USDT
Cardano (ADA) has been trading in a tight range between the neckline of the inverse head and shoulders pattern and the immediate support at $0.38.
The 20-day EMA ($0.39) has leveled off and the RSI is near 50, indicating a state of balance between the bulls and the bears. If the price rises from the current level or the 50-day SMA ($0.36), the bulls will make another attempt to break above the general hurdle.
If they do, the bullish setup will complete and the ADA/USDT pair can rally to $0.52 and then $0.60. Conversely, a break below the 50-day SMA could take the price to the strong support zone between $0.32 and $0.34.
DOGO/USDT
Price action on Dogecoin (DOGE) has been sluggish over the past few days. This shows that both the bulls and the bears are cautious and do not make large bets.
The flat moving averages and the RSI just below the midpoint do not indicate an advantage for either party. This suggests that the DOGE/USDT pair may range between $0.10 and $0.08 for a while longer.
On the upside, a break above $0.10 could put the resistance at $0.11 at risk of being broken. If that happens, the pair can pick up momentum and shoot towards $0.15. Conversely, a break below $0.08 could clear the way for a retest of the strong support at $0.07.
MATIC/USDT
The long tail of the February 20 candlestick shows that the bulls bought the dip in the hope that Polygon (MATIC) would resume its uptrend, but that did not happen. The bears sold the rally above $1.50 on Feb. 21, which started a pullback.
The bulls will have to protect the $1.30 level if they want to keep the uptrend intact. If the price bounces off the current level, the MATIC/USDT pair may try to rally towards the overhead resistance of $1.57 again. Buyers will have to clear this hurdle to start the next leg of the uptrend.
Conversely, if the price breaks below the 20 day EMA, it will suggest that traders may be booking profit. That could open the doors for a drop towards the 50-day SMA ($1.11).
Related: How to trade bullish and bearish flag patterns?
SOL/USDT
Solana (SOL) broke above the resistance line on Feb 20, but the bulls were unable to sustain the higher levels. This shows that the bears continue to defend the resistance line.
If the price continues lower and breaks below the moving averages, the bears will try to consolidate their position by dragging the SOL/USDT pair below the important support at $19.68. If they can pull it off, the pair can drop to $15.
On the other hand, if the price rises from the moving averages, the bulls will again try to clear the resistance line. If the price closes above $28, the bears may give up and the pair could accelerate towards $39.
POINT/USDT
Polkadot (DOT) closed above the neckline of the inverse H&S pattern on February 19, but bulls were unable to take advantage of this momentum.
The bears sold the breakout and pushed the price below the neckline on February 22. If the price fails to quickly rise above the neckline, the bulls can exit their positions. That could start a deeper correction towards the $5.50 to $5.87 area.
Instead, if the price rises and rises above the neckline, it will indicate that sentiment remains positive and traders are buying the dips. The DOT/USDT pair could pick up momentum after buyers break through the $8 barrier. The pair can then skyrocket to $9.50.
SHIB/USDT
Shiba Inu (SHIB) has been trapped within a wide range between $0.000007 and $0.000018 for the past few months. The bulls tried to push the price to the range resistance, but the bears had other plans. They stopped the rally near $0.000016.
The bulls repeatedly bought the dip of the 20-day EMA ($0.000013), but were unable to push the price above $0.000014. This indicates that traders lightened their positions on rallies. The price has once again dipped below the 20-day EMA and the bears will try to sink the SHIB/USDT pair to $0.000011.
The flattening out of the 20 day EMA and the RSI near the midpoint suggest that the bullish momentum has weakened. If the buyers want to take control, they will need to quickly push the price above $0.000014. If they do, the pair can rally to $0.000016 and then $0.000018.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
