After a staggering rise to nearly $ 42,000, the bitcoin (BTC) price finally undergoes a major correction, with the price dropping by about 18% at the time of writing. While a rapid drop to $ 30,402 cannot secure a night in the HODLer crowd, big drops like those seen in the last 24 hours could easily detonate an influential trading portfolio. A sharp bearish move also threatens to wipe out much of the gains in recent weeks.
Bybt data shows that there have been over $ 2.7 billion in square futures contracts in the past 24 hours.
When long-term traders start to settle due to margin calls, traders who are waiting to buy block as they expect the best opportunity to buy a trade. Lack of demand and oversupply are causing a sharp drop similar to what we see today.
Just as resistance levels cannot stop a meeting supported by strong momentum, during panic selling the support level cannot stop a decline. Professional dealers usually do not step in to catch a falling knife. They prefer to wait until the excess foam is removed and sales slow before moving on to purchase.
Let’s take a look at the top 10 cryptocurrency charts to determine what levels can be reliable support.
Bitcoin / US dollar
Bitcoin fell to an intraday low of $ 35,111.58 on January 10, but the price rebounded sharply and closed at $ 38,161.04. However, the bears were not in the mood to hold back, as they started to sell actively again.
The bitcoin / dollar pair broke the critical support level of the 20-day exponential moving average ($ 32,093), but found support at $ 29,688.10 near the 38.2% Fibonacci retracement level.
If the leap to $ 29,688.10 continues, it would be considered a natural correction after an extended bullish wave. The bulls will try to resume the trend again.
Conversely, if the bears fall below $ 29,688.10, the next 50% retracement support level will be $ 25,897.42, above the 50-day SMA of $ 24,307.
A deep decline to this level would indicate a breach of the bullish momentum and this pair could start a new trend.
ETH / USD
Ether (ETH) formed a long-legged Doji candle on January 10, and today a sharp decline followed, indicating strong profit-taking by traders. The Bulls are currently trying to defend the 20-day EMA ($ 956).
If successful, the ETH / USD pair could rise to $ 1,100 as the Bears could step in again and sell a comfortable rally. If price falls from this resistance, but the bulls prevent the price from falling below the 20-day moving average, it could lead to consolidation for several days.
Conversely, if price remains below the 20-day moving average, the next stop is $ 840.93, and if support also breaks, the decline could extend to the 50-day moving average of $ 712. The deeper the fall, the longer it takes bulls to recover.
XRP / US dollar
XRP failed to rise above the upper resistance at $ 0.384998, indicating that traders have softened their positions on the relief. The Alt currency fell below its 20-day moving average ($ 0.30) today, having remained above it for the past three days.
XRP / USD could now drop to $ 0.169 support as buyers are more likely to enter. A strong bounce off this support would indicate that the pair could remain in the $ 0.169 to $ 0.384998 range for a few more days.
Contrary to this assumption, if the bears fall and keep the price below $ 0.169, the downtrend could resume with the next stop at $ 0.10.
LTC / USD
After struggling in recent days to hack and hold over $ 180, Litecoin (LTC) has succeeded today in its battle with lucrative bookings. The common currency fell below the 20-day moving average ($ 142) and is currently trying to stay above the $ 120 support level.
If LTC / USD bounces off current levels, the bulls may try to resume the trend, but any rally is likely to face heavy selling on the 20-day moving average. If the bulls pushed the price above the 20-day EMA, the pair could try to gradually rally towards $ 160.