Traders have a preference for a trending market rather than one that is range-bound. Currently, there is uncertainty about the next directional move for Bitcoin (BTC), leading traders to step to the sidelines. Research firm Santiment suggests that “fear and indecision” could be the factors behind the drop in Bitcoin’s on-chain activity, although this does not necessarily mean that Bitcoin will fall further.
Bitcoin’s consolidation phase is providing opportunities for investors to accumulate more Bitcoin. Japanese investment firm Metaplanet has made a “strategic shift” in its treasury management strategy by adopting a Bitcoin-only approach due to a sustained decline in the Japanese yen. Metaplanet recently announced the purchase of 117.7 Bitcoin at an average price of $65,000.
When a consolidation phase occurs near a lifetime high, it is generally seen as a positive sign, indicating that traders are holding onto their positions in anticipation of the uptrend continuing. However, if the overhead resistance level is not breached despite repeated attempts, traders may begin to sell their positions, leading to a sharp pullback.
The question now is whether the bulls will defend the essential support levels in Bitcoin and select altcoins. Let’s analyze the charts to find out.
The S&P 500 Index continues to move upwards towards its all-time high, indicating strong demand from the bulls. The 20-day exponential moving average (EMA) is sloping upwards, and the relative strength index (RSI) has entered positive territory, giving a slight advantage to the buyers. If the index surpasses the 5,265 level, it may continue its upward journey towards 5,500. However, the bears are likely to put up a fight at 5,265, potentially leading to a range-bound movement between 5,265 and 4,950.
The U.S. Dollar Index (DXY) broke below the 20-day EMA on May 9, indicating aggressive selling by the bears on every minor rally. The bears will attempt to push the price down to the 50-day simple moving average (SMA), which has acted as strong support in the past. If the price bounces off the 50-day SMA, the index may make another attempt to rise above the 20-day EMA and rally to 106.50. On the other hand, if the price breaks below the 50-day SMA, it will suggest that the bears are in control, and the index may drop to the support line, attracting buying interest from the bulls.
Bitcoin is struggling to stay above the 20-day EMA, indicating that the bears are exerting pressure. The flat 20-day EMA and the RSI near the midpoint suggest that the range-bound action may continue for a few more days. If buyers can maintain the price above the 20-day EMA, the BTC/USDT pair could rise to the 50-day SMA, which may act as a strong resistance. If the bulls manage to surpass this level, the pair may climb to $73,777. However, if the price turns down from the 50-day SMA, it will indicate bearish activity at higher levels, and the pair may drop to the critical support zone between $59,600 and $56,500.
Ether (ETH) is currently trading within a descending channel pattern, indicating bearish control. The price is attempting to bounce off the $2,850 level, which is an important level for the bulls to defend. If this level breaks down, the ETH/USDT pair may continue its downtrend towards the channel’s support line. To regain control, the bulls need to initiate a recovery and drive the price above the resistance line. If successful, the pair may rise to $3,357 and later to $3,730.
BNB has been trading between the downtrend line and the moving averages, indicating indecision between the bulls and bears. If the price falls below the moving averages, it will favor the bears, and the BNB/USDT pair may move downwards to $536 and later to the crucial support at $495. On the other hand, if the price breaks above the downtrend line, it will suggest that the bulls have the upper hand. The buyers will then aim to push the price above $635 and resume the uptrend.
Solana broke below the $140 support level on May 13 but did not reach the pivotal support at $126. The flat 20-day EMA and the RSI near the midpoint do not provide a clear advantage for either the bulls or the bears. If the price turns up and rises above the 20-day EMA, it will indicate strong buying at lower levels, potentially leading the pair to face stiff resistance at $162. Conversely, if the price turns down from the 20-day EMA and breaks below $137, it will signal bearish activity, and the SOL/USDT pair may drop to $126, where the bulls are expected to provide support.
XRP has been trading below the 20-day EMA, but the bears have been unable to push the price to the essential support at $0.46. The downsloping 20-day EMA and the RSI near 43 suggest that the bears have the upper hand. Any recovery attempt is likely to face selling pressure at the 20-day EMA. If the price turns down from this level, the XRP/USDT pair may drop to $0.46, where buyers are expected to defend the level. A strong rebound from $0.46 and a rise above the 20-day EMA will indicate a continuation of the range-bound action.
Toncoin has been gradually moving higher towards the overhead resistance of $7.67, indicating demand from the bulls. If the bulls can hold their ground at this resistance level, it will increase the chances of an upside breakout. The TON/USDT pair may then rally towards $9. Conversely, if the price sharply turns down from the overhead resistance, it will indicate that the bears are not willing to give up. The pair may then drop to the moving averages, which should provide strong support.
Dogecoin has been consolidating between the 50-day SMA and the horizontal support at $0.12. Buyers are trying to maintain the price above the 20-day EMA, which could lead to a rise towards the 50-day SMA. This level is crucial for the bears to defend, as a breakout above it may open the doors for a rally to the overhead resistance zone between $0.21 and $0.23. On the other hand, a break below $0.12 will complete a bearish head-and-shoulders pattern, potentially leading to a drop to the strong support at $0.08.
Cardano bounced off the support line on May 13, an important level for the bulls to defend in the short term. The downsloping 20-day EMA and the RSI in the negative zone suggest that the path of least resistance is to the downside. If the price breaks and stays below the support line, the next stop could be $0.40. Conversely, if the price continues to rise and breaks above the 20-day EMA, it will indicate that the bulls are still buying on dips. The ADA/USDT pair may then rise to the 50-day SMA and eventually to $0.57.
This article is for informational purposes only and does not constitute investment advice or recommendations. Readers should conduct their own research before making any investment decisions.