Bitcoin (BTC) surged above $39,000 on February 1, but the sharp drop in PayPal shares may have led to strong selling by short-term traders.

But in the longer term, it appears that major investors see deflation as a buying opportunity. On-chain monitoring resource Whalemap said that whales holding between 100 and 10,000 BTC have accumulated during the recent drop.

Fidelity recently published an article titled “Bitcoin First,” which highlights that Bitcoin is the most “secure and decentralized” form of asset and it is unlikely that any of the altcoins will be overtaken as a “monetary commodity.”

Bitcoin combines “the scarcity and durability of gold with the ease of use, storage and portability of fiat currencies,” the report said.

Daily performance in the cryptocurrency market. Source: Coin360
Regardless of bitcoin’s volatility, the volume of transactions at the end of 2021 has been at a nearly 100% annual growth rate over the past five years, according to a recent NYDIG report. This increased the annual volume of Bitcoin transactions to $3 trillion in 2021, surpassing the popular credit card network American Express, which recorded $1.3 trillion in payments, and Discover, which had $0.5 trillion.

Could a buildup of bulls indicate that a bottom might be around the corner? Let’s study the charts of the top 10 cryptocurrencies to find out.

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Bitcoin’s recovery reached the 20-day exponential moving average (EMA) ($39,116) on February 1, which is acting as solid resistance. This indicates that sentiment remains negative and that traders are selling on rise to general resistance levels.

BTC/USDT daily chart. Source: TradingView
The bears will now attempt to pull the price below $36632.61. If they succeed, the bulls who bought the recent dip could turn a profit, pulling the BTC/USDT pair below $35,000.

The bearish moving averages and the relative strength index (RSI) in negative territory indicate that the bears have an advantage.

Contrary to this assumption, if the price drops by $36632.61, this will indicate that the bulls are buying in the fall. Then they will make another attempt to remove the upper barrier to $39,600.

This is an important level to watch, because if the pair stays above this level, the next stop could be the 50-day simple moving average (SMA) ($43,421). The bulls should remove this hurdle to signal a possible end to the downtrend.

Ether (ETH) broke out and closed above the breakout level of $2,652 on January 31, but the bulls failed to overcome the upper barrier at the 20-day moving average ($2792). This indicates that the bears are aggressively defending this level.

ETH/USDT daily chart. Source: TradingView
If the price drops and stays below $2,652, it will signal a return to action for the bears. The ETH/USDT pair could then drop to $2,476 and onward to the channel guide. The downtrend could be resumed upon a break below $2,159.

On the contrary, if the price returns from the current level, this will indicate that the bulls are buying in the fall. Buyers will again try to push and hold the pair over the 20-day exponential moving average. If they succeed, the pair can begin their march toward the channel’s resistance line.

Binance coin (BNB) returned from the support line to the channel on January 31, indicating that the bulls are buying in the fall. However, the bulls were unable to push the price up to the 20-day moving average ($407).

BNB/USDT daily chart. Source: TradingView
This indicates a lack of demand at higher levels. Both moving averages are declining and the RSI remains in the negative territory, indicating that the bears have the upper hand. Sellers will now attempt to pull the price below the channel guideline.

If it succeeds, BNB/USDT may drop to the strong support area of ​​$330 to $320. Alternatively, if the price returns from the current level and rises above the 20-day moving average, this will indicate that sales pressure could be declining.

Cardano (ADA) continues to struggle to recover from the strong $1 support. This indicates that there is no urgency among traders to build up at current levels.

ADA/USDT daily chart. Source: TradingView
If the bulls fail to push the price and keep it above the moving averages over the next few days, the probability of a break below $1 may increase. If that happens, ADA/USDT may resume its downtrend.

The first support on the downside is $0.80. If this level breaks, the decline may extend to the channel guide. On the contrary, a breakout and a close above the 50-day SMA ($1.25) may lead to a retest of the channel’s resistance line.

Source: CoinTelegraph