The Bitcoin (BTC) price has adjusted in recent days, and traders are curious to see if this is a smaller drawdown or the start of a deeper decline. The problem is that no one has a crystal ball and analysts can only indicate critical support levels that can be based on historical data and evidence.
However, in a bearish phase, the price tends to fall below key support levels as traders panic and sell out of fear, similar to the way the price exceeds growth targets during a bullish wave bought by traders due to FOMO.
March has historically been a weak month for Bitcoin, indicating that seasonal traders prefer to wait and watch rather than quick shopping in the fall. This lack of demand could be one of the reasons why Grayscale Bitcoin Trust’s premium has dropped over the past week.
However, not all data are bearish. On February 26, Moskovski Capital CEO Lex Moskovsky indicated that Bitcoin miner jobs were positive on February 26, for the first time since December 27. Additionally, CryptoQuant CEO Ki Yong Joo said the massive influx of money on Coinbase in recent days indicates that institutions are still building up at lower levels.
This data appears to be incomprehensible and does not provide an immediate indication of whether the bulls or bears are winning. Let’s take a look at the 5 biggest cryptocurrency cards that could outperform in the next few days.
Bitcoin / USD
Bitcoin broke below the 20-day exponential moving average ($ 47,441), the first sign of the start of a deeper correction. The next important support is the 50 day SMA at $ 41,066. The price hasn’t closed below this support since Oct 9th, so the level becomes important.
Bulls will likely defend strongly from the 50 day simple moving average. If the price bounces back from this support and rises above the 20-day moving average, it means that the sentiment is still bullish and traders are buying on dips.
However, the flat moving averages and the Relative Strength Index (RSI) just below the midpoint indicate that the bulls are losing their grip.
If the bears push the price below the 50 day simple moving average, this means that supply is outstripping demand, and traders are quick to take profits. Such a move could push the price down to its lowest level on Feb 8th at $ 38,000.
A breakout through this support would be extremely negative as the next support would be $ 32,000 followed by $ 28,850.
The decline in the 20-EMA and the RSI in negative territory indicate that the bears are in control. The price is now approaching the critical support level at $ 41,959.63.
If price returns from this support, the bulls will try to push the price above the 20-EMA. If they succeed, it will indicate that the bulls are gathering dips aggressively. Then the BTC / USD pair could go up to the 50 SMA and then to $ 52,000.
On the contrary, if support collapses at $ 41,559.63 and bears turn it against resistance, a deeper correction is likely to occur.
BNB / USD
Binance coin (BNB) has been in a correction phase since February 20, indicating that traders are taking profits after the sharp rise on February 19. However, since February 25, the rate of decline has been gradual, indicating that traders are not panicking.
The price has now dropped to the 20-day moving average ($ 194), which buyers can enter. If the price bounces back from this support and breaks the descending line, the BNB / USD pair may once again attract buying from short-term traders. That might push the price down to $ 280 and then go as high as $ 300.
The 20 day moving average has flattened and the RSI indicator is just above its midpoint, indicating an equilibrium between supply and demand. However, if the bears drop and keep the price below the 20 day EMA, that would indicate that the supply is outstripping demand. The pair can then correct to $ 167.3691, then $ 118.
The 4 hours chart shows the descending triangle formation that completed on the break and closed below $ 189. If that happens, this would indicate that the top is in place and the pair could drop to $ 118.
Conversely, if the bulls defend the support at $ 189, this indicates that sentiment remains positive as bulls buy when they drop to strong support levels.