Bitcoin and altcoins sold off sharply on August 19, leading technical traders to predict a possible fall to New Year’s lows.

bitcoin
BTC

way down
$16,934

and most of the major altcoins experienced a sharp sell-off on August 19, but there does not seem to be a specific trigger for the sudden drop. Over the past 24 hours, the sharp decline has resulted in over $551 million worth of liquidations, according to Coinglass data.

Other formations often take time, other than a V-bottom, to complete as buyers and sellers try to gain the upper hand. This tends to cause a few random movements in the variables, which can be handy for short-term traders, but long-term traders should avoid the noise.

Daily indicators of the cryptocurrency market. Source: Coin360
Glassnode data shows that investors who bought bitcoin in or before 2017 simply held their positions. The percentage of bitcoin supply that has been dormant for at least five years hit an all-time high of 24,351% on August 18, indicating that owners are not panicking and are not ready to sell for a small profit.

Will Bitcoin and most altcoins be able to challenge the June lows, or will the bulls buy into the current dip? Let’s examine the charts of the top 10 cryptocurrencies to find out.

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Bitcoin/US dollar
The main trend of Bitcoin is bearish, but the bulls are trying to break the bottom. The price has been growing inside the ascending channel for the last few days. The inability of the bulls to push the price above the channel resistance line may have prompted short-term traders to take profits. This pulled the price below the moving averages.

BTC/USDT daily chart. Source: Trading View
When the BTC/USDT pair falls towards a channel support line and the price is trading in an up channel, traders will usually fall into the support lines and try to sell near the resistance line.

Therefore, the probability of going beyond the support line is high. If this happens, buyers will try to push the pair above the moving averages. A break and close above the 20-day exponential moving average (EMA) ($23,265) could open the doors for a possible rally towards the resistance line.

This positive view can be invalidated if the price breaks out and stays below the channel. Such a move could open the doors to a possible drop to $18,626.

ETH/USDT
Ether
Ethereum

way down
$1249

On August 19, it broke below the 20-day EMA ($1,771), the first sign that the recovery may be losing momentum. The key level to look out for on the downside is $1,700 as it acts as strong support during the August 6-10 period.

Daily ETH/USDT chart. Source: Trading View
If the price rebounds strongly from $1,700, it will show that the bulls are trying to turn this level into support. The ETH/USDT pair could then rise to $1960 and then to $2030. A break above this level may indicate a resumption of the uptrend. Then the pair may rise to the downtrend line.

Contrary to this assumption, if the price breaks and stays below $1,700, it would mean that traders who may have been buying lower are aggressively exiting their positions. This could push the pair towards the 50-day Simple Moving Average (SMA) ($1,519).

BNB/USDT
BNB fell below the 20-day EMA ($304) on August 17, indicating that short-term traders may be taking profits. The fall continued, and on August 19, the price dropped to the 50-day SMA ($272). This is an important level that bulls must defend if they want to keep the recovery going.

BNB/USDT daily chart. Source: Trading View
If the price rises from the current level and rises above the 20-day EMA, BNB/USDT could rise towards the upper resistance at $338. This could create an inverted head and shoulders pattern that ends on a breakout and closes above $338.

Conversely, if the price drops below the 50-day SMA, the pair could drop to $240. This move suggests the pair could be stuck in a wide range of $183 to $338 for a while.

XRP/USDT
On August 17, the bulls failed to push Ripple (XRP) above the $0.39 upper resistance level, indicating that the bears continue to defend the level vigorously.

Daily XRP/USDT chart. Source: Trading View
Usually in a range, traders buy near support and sell near resistance, which is what happened with the XRP/USDT pair.

Bulls can now wait for the price to drop to the $0.30 support before buying. If the price bounces off $0.30, this indicates that the range move could continue for a few more days.

The next directional movement will occur after

Source: CoinTelegraph

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