The Shallow Bitcoin (BTC) withdrawal after news of the regulatory attack on BitMEX and the recent announcement that US President Donald Trump has shown positive results for the Coronavirus, shows that fundamental sentiment remains bullish.
Typically, the biggest damage during such periods from the negative news flow comes from the square of current positions. The data shows that the volume of Bitcoin futures and open interest have declined since their peak in early September.
This means that there have been fewer long trades to close quickly, and this may also explain why a more severe crash was avoided.
While Bitcoin has been largely available in recent weeks, data on the chain shows a strong influx of newcomers. Analysts see this growth in user numbers as a positive, as this indicates that new traders are viewing Bitcoin as a store of value.
Traders can look for cryptocurrencies that are quickly recovering from current weakness as they show strong buying at their fall. Let’s analyze the top 10 digital currencies to determine critical support and resistance levels.
Bitcoin / USD
Bitcoin reversed its trend of around $ 11,000 on October 1, indicating that the bears are aggressively defending the area between the 20-day exponential moving average ($ 10,704) and the 50-day simple moving average ($ 11,017).
The price action in recent days has formed a symmetrical triangle pattern that shows the bulls and bears are hesitant about the next directional move. This uncertainty can be resolved after the price moves above or below the triangle.
The gradually declining moving averages and the RSI in negative territory indicate that bears have a slight edge.
If the BTC / USD pair breaks and closes (UTC) below the triangle, then the bears are outmatching the bulls. Sellers would then try to break the critical support down to $ 9,835, and if successful, it could drop to $ 9,000 per card.
However, the long tail of the day’s candlestick shows that the bulls are building up as they descend to the bullish line. They will now try to push the price above the resistance line in the triangle.
If they succeed, the pair might face less resistance at $ 11,178, but if the bulls manage to push the price above this level, a rally to $ 12,460 is possible.
It’s difficult to predict with certainty the direction of the explosion, so it is best to wait for an eruption before making big bets.
ETH / USD
On October 1, the bulls pushed Ether (ETH) to the bottom of the falling line, but were unable to maintain higher levels. This could have attracted profit from short-term traders who pushed the price below the 20-day moving average ($ 358).
The gradually declining moving averages and the RSI in negative territory indicate that the sellers have an advantage.
However, the two previous rallies from the $ 308,392 support area show that the bulls are building strong near this level. This way, shoppers can use the existing waterfall again for purchase.
A breach of the 20-day moving average will be the first sign that the correction has ended. On the contrary, a break below $ 308,392 could signal the start of a deeper retracement to $ 240.
XRP / US Dollar
The failure of XRP to rise above the 20 day moving average ($ 0.241) could draw aggressive bulls into the gains and drive the bears. The moving averages of a downtrend and the RSI in negative territory indicate that the sellers have an edge.
If the bears drop the XRP / USD pair below the support zone of $ 0.2295 – $ 0.219712, the downtrend may resume. Next support on the downside is $ 0.19.
However, the bulls are likely to strongly defend the support area and make a fresh attempt to push the price above the 20-day moving average and the downline. If they succeed, this could indicate a possible change in direction.
BCH / USD
On October 1, Bitcoin Cash (BCH) settled just below the downtrend line and continued its downtrend towards the critical support of $ 200.
A retest of the support level over a short period of time tends to weaken it. A breakout and close (UTC) below $ 200 could panic selling and increase the likelihood of a deeper dip to $ 140.
Contrary to this assumption, the price will indicate that the bulls will accumulate at a lower level if the price breaks out from current levels.