Crypto markets and US stock markets sold off today over fears that the collapse of Chinese real estate giant Evergrande not only hurt China, but has broader implications in other markets as well.
When sentiment is bearish, traders move away from positions they perceive to be risky in favor of safe-haven trades. This could be one of the reasons for Bitcoin (BTC) and most major altcoins to drop sharply today.
Bybt data shows that Bitcoin held in Binance wallets has jumped 29,717 Bitcoin in the past 30 days. History suggests that an increase in the Bitcoin balance on Binance caused the price of Bitcoin to drop.
The Bitcoin balance on Binance fell from 99,700 BTC on April 20 to 347,590 BTC on June 26. During that time, the price of Bitcoin plunged from around $ 57,000 to around $ 30,000.
Now the question is whether the massive sales could escalate or will lower levels attract aggressive buying from traders? Let’s analyze the charts of the top 10 cryptocurrencies to find out.
BTC / USDT
Bitcoin’s selling escalated after bears pulled the price below moving averages. The price action of the last few days has formed a head and shoulders pattern that will end in a breakdown and close below the neck line.
The moving averages are on the verge of a bearish cross and the Relative Strength Index (RSI) has fallen below 41, indicating that the bears are in control. If the price holds below the neck line, the BTC / USDT pair could drop to $ 37,332.70 and then to the model target of $ 32,423.05.
Contrary to this assumption, if the price bounces off the neck line, the bulls will try again to push the price towards $ 50,000. However, bears are likely to aggressively defend the 20-day exponential moving average ($ 47,014).
If the price drops because of this resistance, it will indicate that sentiment has turned negative and traders are selling on rallies. The first sign of strength will be a breakout and a close above $ 48,843.20.
ETH / USDT
Ether (ETH) rebounded off support at $ 3,377.89 on September 18, but the bulls were unable to keep the price above the 20-day EMA ($ 3,402). This indicates that traders have closed positions at higher levels.
If the price breaks and closes below $ 3,000, the ETH / USDT pair will complete a bearish head and shoulders pattern. The target goal for this setup is $ 1,972.12.
The 20 day EMA has started to decline and the RSI is below 42 indicating that the path of least resistance is on the downside.
On the contrary, if the bulls aggressively defend the $ 3,000 level, the pair could rise again towards air resistance at $ 3,377.89. The bears will likely defend this level, but if the bulls overcome this resistance it will signal that the correction may be over.
ADA / USDT
The bulls defended the 50-day simple moving average ($ 2.31) on September 18, but were unable to take advantage of the rebound. The strong sell pulled Cardano (ADA) below the 50-day SMA on September 19.
Selling picked up today and ADA / USDT dipped to critical support at $ 1.94. The strong rebound from this level suggests that the bulls are accumulating on the troughs.
If the buyers maintain the rebound, the pair could gradually move up towards overhead resistance at $ 2.47. Bears are likely to sell on 20-day EMA relief rallies ($ 2.45). If the price drops from this resistance, the pair could drop to $ 1.94 again.
A breakout and close above the 20-day EMA will be the first sign that sellers may lose their grip.
BNB / USDT
Binance Coin (BNB) broke below the 50-day SMA ($ 422) on September 17 and subsequent attempts by the bulls to recover the level failed. This suggests that the bears sell at every minor rally.
The sell-off accelerated today and the BNB / USDT pair fell near critical support at $ 340. This is an important level for the bulls to defend as a breakout below could open the door to a decline to $ 300 and then to $ 250.
The moving averages have completed a bearish cross and the RSI is in the negative zone indicating that the bears have the upper hand.
If the price bounces off $ 340, the pair could hit the 20-day EMA. This level is likely to act as a stiff resistance. The bulls will need to push and hold the price above $ 422.80 to indicate that the correction may be over.
XRP / USDT
XRP had traded near the breakout level at $ 1.07 over the past few days, but the failure of the bulls to push the price above the 20-day EMA ($ 1.09) showed that bears sold on rallies.
The sale intensified after the bears pulled and closed the price below the 50-day SMA ($ 1.08) on September 19. The moving averages are on the verge of a bearish cross and the RSI has fallen into the negative zone, indicating that the bears are in control.
If the price holds below $ 0.95, the XRP / USDT pair could drop to $ 0.75. Any rally of relief from the current level should face strong resistance at the 20-day EMA. A breakout and close above $ 1.13 will signal the bulls to attempt a comeback.
SOL / USDT
The long tail of the September 17 candlestick shows that the bulls have aggressively bought lower below the 20 day EMA ($ 148). This was followed by a strong rebound on September 18, but the bulls were unable to keep Solana (SOL) above the first resistance at $ 170.
This may have attracted the profit taking of the bulls and the short selling of the aggressive bears. The 20-day EMA has flattened and the RSI is near the midpoint, indicating that the bulls are losing their grip.
If the price holds below the 20-day EMA, the SOL / USDT could drop to the 61.8% Fibonacci retracement level at $ 123.42. A breakout and close below this support would suggest that the uptrend may be over.
The bulls will need to push and hold the price above $ 171.47 to signal the end of the corrective phase.
DOT / USDT
The Polkadot (DOT) rebound against the 20-day EMA ($ 32.12) on September 18 was followed by a candlestick pattern inside the day on September 19. It showed the indecision between bulls and bears.
This uncertainty resolved lower today with a break below the 20-day EMA. The sell picked up speed and fell to critical support at the 50-day SMA ($ 27.29). This is important support for the bulls as they successfully defended it on September 7th.
If the DOT / USDT bounces from the current level, bears are likely to sell on rallies towards the 20 day EMA. If the price drops from this level, it will suggest that sentiment has turned negative and increase the prospects for a breakout below the 50 day SMA. This negative opinion will be invalidated if the price goes up and exceeds $ 34.
Related: Ethereum forming a double top? ETH price loses 12.5% amid Evergrande contagion fears
DOGE / USDT
Dogecoin (DOGE) narrow-range trading over the past few days resolved lower today as bears pulled the price towards the strong support at $ 0.21.
The drop in the 20-day EMA ($ 0.25) and the RSI near oversold territory indicate the bears are in control. If they can move down and hold the price below the $ 0.21 support, the DOGE / USDT pair could slide to $ 0.15.
If the price rebounds from the current level, the bulls will try again to push the pair above the 20 day EMA. If they succeed, the pair could move up to the downtrend line. Alternatively, if the price drops against the 20-day EMA, it will increase the prospects for a breakout below $ 0.21.
UNI / USDT
The bulls attempted a rally on September 18 but were unable to push Uniswap (UNI) above the 20-day EMA ($ 25.09). This showed that the bears were aggressively defending the 20-day EMA.
The UNI / USDT pair continued to move lower and the bears pulled the price below critical support at $ 21 today. If the price holds below that support, the pair could see panic selling and move lower until the next support at $ 18.
The 20-day downslope EMA and the RSI in the negative zone indicate an advantage for bears. This negative view will be invalidated if the price rises from the current level and breaks the downtrend line. Such a move will indicate a strong build-up at lower levels.
AVAX / USDT
The long wick on the September 18-19 candlestick showed that traders were profiting at higher levels. Sales picked up today and Avalanche (AVAX) fell to the 20-day EMA ($ 55.16).
The strong 20-day EMA rebound suggests sentiment remains positive and traders are racking up lows. If the price holds above $ 60.04, the bulls will try again to push AVAX / USDT to the all-time high of $ 76.27.
On the contrary, if the price drops from the current level and goes below the 20-day EMA, the bearish momentum could accelerate as traders could rush to the exit. This could push the price down to $ 48 and then to the 50-day SMA ($ 38.56) where buyers could step in to stop the decline.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN. Every investment and trade move involves risk. You should do your own research before making a decision.
Market data is provided by HitBTC to exchange.