Stock markets in Europe and the US are experiencing a red sea as traders continue to sell risky assets due to the geopolitical situation. Bitcoin (BTC) and several major cryptocurrencies are also making a profit after the recent rally.
Another reason that may keep investors on their toes is the upcoming meeting of the Federal Open Market Committee (FOMC) on March 16th. A March 2 statement from Federal Reserve spokesman Jerome Powell confirmed that the central bank is likely to raise interest rates this month.
Brian Colton, chief economist at Fitch Ratings, expects core inflation to remain high in 2022 and the Federal Reserve to raise the “federal funds rate to 3% by the end of 2022.”
Daily indicators for the cryptocurrency market. Source: Coin360
ExoAlpha managing partner and chief investment officer David Lifshitz said that bitcoin could remain weak in the short term because the Fed’s rate hike technically “strengthens” the US dollar and thus “weakens” bitcoin. However, no significant impact on Bitcoin is expected.
Several uncertainties may limit the upside in the short term. Let’s analyze the charts of the top 10 cryptocurrencies to identify critical levels of support and resistance.
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Bitcoin / US Dollar
Bitcoin dropped from $45,400 on March 2, indicating that the bears are defending the upper resistance at $45,821. The price fell to the moving average, which is an important support to look for.
BTC/USDT daily chart. Source: Trading View
If the price bounces off the moving averages, this means that the bulls are buying in the fall. The bulls will then attempt to push the price above the upper resistance area of $45,821 and the ascending channel resistance line. If it succeeds, BTC/USDT could rise towards the next major resistance of $52,088.
Contrary to this assumption, if the price falls below the moving averages, this means that the traders are selling at higher levels. This could open the door to a possible drop to $37,000 and then to the channel’s support line.
The 20-day exponential moving average (EMA) ($40,899) and the relative strength index (RSI) near their midpoint indicate several days of range action.
ETH / USDT
Ether (ETH) broke out to close above the 50-day simple moving average (SMA) ($2,838) on February 28, but the bears defended the psychological $3,000 level. This could lead to short-term selling of the traders, causing the price to fall below the moving average.
ETH/USDT daily chart. Source: Trading View
ETH/USDT can now dip to the symmetrical triangle guide. This is an important support to protect the bulls, because if this level is broken, sales may increase. If the price remains below the triangle, the downtrend can be resumed. The pair could then decline to $2,300 as the bulls are expected to provide support.
Alternatively, if the price breaks from the guide, the bulls will attempt to push the pair above the upper $3,000 resistance level and challenge the triangle resistance line.
BNB / USDT
Although the bulls pushed BNB above the 50-day simple moving average ($403), they failed to hold onto the higher levels. This indicates that the bears are struggling to defend the level.
BNB/USDT daily chart. Source: Trading View
Sellers are trying to lower the price and keep it below the 20-day moving average ($391). If they do, BNB/USDT could drop to the strong $350 support.
Alternatively, if the price rebounds from the current level, there is an increased chance of an outbreak and a close above the 50 day simple moving average. This could open the door to a potential rally against the overhead resistance at $445.
The 20-day fixed exponential moving average and the RSI near its midpoint indicate that the movement will be range-limited in the short term.
XRP / USDT
Ripple (XRP) has reversed from the downtrend line and fell to the 50-day simple moving average ($0.73), indicating that the bears are yet to surrender.
XRP/USDT daily chart. Source: Trading View
If the price jumps from the 50-day SMA, the buyers will once again try to push the XRP/USDT pair while holding above the descending trend line. If they do, the buying momentum may increase and the pair could rise to $0.91.
On the other hand, if the price stays below the 50-day SMA, the bears will try to push the pair to $0.62. Flat moving averages and RSI near the middle do not offer any clear advantage to bulls or bears.
