During strong trends, it is best to buy when there is a significant dip, as profits are generated when the price quickly returns from oversold conditions. This appears to be exactly what happened on April 18th, when traders jumped into the opportunity to buy bitcoin and altcoins at low levels.
However, no market can continue to move in a straight line, and periodic adjustments and consolidation phases are needed as they keep out speculators who jump in and use significant influence only when they feel the opportunity to get rich quick.
The spike in Dogecoin (DOGE) price and the massive addition of subscribers to Dogecoin and other cryptocurrency sub-loans in the past week indicate an influx of beginners looking to make little fortune.
Daily performance in the cryptocurrency market. Source: Coin360
Usually this category of traders is the last to enter the trend, and irrational buying usually results in a sudden rally that ends with a short-term peak, as smart money sees this as a profit spread signal. The inexperienced trader continues buying his way down, and as losses increase, he eventually sells the entire position at the bottom.
On the other hand, long-term veteran investors wait patiently for the surplus to be removed from the system and then to start buying. Traders should be looking for the right opportunity to participate, not engage in trades out of fear of fear.
Let’s examine the top 10 cryptocurrency charts to identify critical support and resistance levels that might signal the start of the next trend.
BTC / USDT
Bitcoin (BTC) strong recovery from $ 50,447.50 on April 18th shows that traders are aggressively buying the decline. However, the drop in prices holding above the 50-day SMA ($ 56,486) today does not mean that they are reluctant to buy at higher levels.
Daily chart BTC / USDT. Source: TradingView
The 20-day exponential moving average ($ 58,775) is declining and the Relative Strength Index (RSI) is in negative territory, indicating that the bears are trying to return. The longer the price trades below the moving average, the more likely it is to take a new test at $ 50,460.
If price returns from support of $ 50,460, the BTC / USDT pair may remain in the range for several days. On the other hand, if the bears drop below $ 50,460, the sell-off could intensify as the bulls who bought the fall of April 18th may be forced to close their positions. The pair could then drop to $ 43,006.77.
On the contrary, the first sign of strength would be the breach of the 20 day moving average. Such a move would improve the odds of a new all-time high of $ 64,849.27.
ETH / USDT
Ether (ETH) fell near the 50-day SMA ($ 1,899) on April 18th, but the bulls bought the decline aggressively, triggering a rebound that pushed the price back above the 20-day moving average ($ 2154). ).
ETH / USDT daily chart. Source: TradingView
However, the bulls are struggling to build on the recovery as the bears attempt once again to push the price below the 20 day EMA. If successful, the ETH / USDT pair could drop to $ 2,040.77 and then to the 50-day moving average. A breakout below the 50 day SMA could lead to a sell-off, which might drop as low as $ 1542.
Contrary to this assumption, if the pair bounces off the current level, this would indicate strong bearish buying. The bulls will then attempt to push the price to a permanent high of $ 2545.84. Overcoming this resistance could initiate the next phase of withdrawal.
BNB / USDT
In a strong trend, the bulls usually buy when they dip into the 20-day moving average ($ 454), which happened on April 18th.
BNB / USDT daily chart. Source: TradingView
However, the long wick of the day’s candle indicates that the bears are aggressively defending the $ 550 resistance. If the price falls and breaks the $ 428 support level, the drop may continue to $ 348.69.
Conversely, if the price comes back from the 20-day moving average and the buyers push the price above $ 550, the BNB / USDT pair might rise to $ 600 and then $ 638.56. Breaking this resistance could initiate the next stage of the trend, which may reach $ 832.75.
XRP / USDT
XRP returned below its 20-day moving average ($ 1.23) on April 18 as bulls gathered at lower levels. However, it is difficult for today’s buyers to extend the recovery period, indicating sales in the collections.
XRP / USDT daily chart. Source: TradingView
If the bears dip below the 20-day moving average, they might drop to the 61.8% Fibonacci retracement level at $ 1.10. A break below this level could lead to a sell-off and push the XRP / USDT pair towards the 78.6% Fibonacci retracement at $ 0.86.
Contrary to this assumption, if the bulls were to raise the price above $ 1.56, the pair might rise to 1.8