Risky assets have had a successful first quarter in 2024, with the S&P 500 Index (SPX) experiencing a 10.2% increase, its best performance since 2019, and Bitcoin (BTC) rallying by nearly 69%. The question now is whether this rally will continue into the second quarter or if it’s time for investors to take profits.
Investors are optimistic about Bitcoin’s prospects in the second quarter. They anticipate an increase in institutional demand for spot Bitcoin exchange-traded funds and believe that Bitcoin’s halving will help maintain a bullish sentiment.
However, traders need to exercise caution after the strong performance in the first quarter. Bull markets are known for their sharp corrections, which can shake out late entrants. Nevertheless, these dips present a low-risk buying opportunity for long-term investors.
So, what support levels should traders watch out for in Bitcoin and altcoins? Let’s analyze the charts to find out.
When it comes to the S&P 500 Index, it has bounced off the support of the ascending channel pattern and reached a new all-time high on March 28, indicating that the uptrend remains intact. While the upsloping moving averages suggest that the bulls are in control, the negative divergence on the relative strength index (RSI) suggests a possible correction or consolidation in the short term. A break and close below the 20-day exponential moving average (5,176) could trigger a sharp decline to the 50-day simple moving average (5,055). On the other hand, buyers will need to push the price above the channel to maintain control and potentially start an upward move towards 5,450.
Moving on to the U.S. dollar Index (DXY), it has been gradually rising and has reached a crucial overhead resistance at 105. The upsloping moving averages and the RSI near the overbought territory indicate that the bulls have the upper hand. If buyers overcome the obstacle at 105, the index could rise to 106 and eventually to 107. Conversely, if the price turns down from 105, it could drop to the 20-day EMA (104). A rebound from this level would increase the possibility of a rise above 105, while a break below the moving averages could lead to a fall to 102.50.
As for Bitcoin, the bulls are struggling to push the price above $71,770, and the recent correction indicates that bears are not ready to give up. A breakout from the tight-range trading is imminent, but it’s difficult to predict the direction of the breakout with certainty. If the price falls below the 20-day EMA, short-term traders may book profits, causing the BTC/USDT pair to drop to the 50-day SMA ($62,430). On the other hand, if the price turns up and breaks above the $71,770 to $73,777 zone, it will signal the start of the next leg of the uptrend, potentially pushing the pair towards $80,000.
Ether has been struggling to rise and maintain above the immediate resistance at $3,679, indicating bearish pressure. If bears manage to sink the price below the 50-day SMA ($3,386), selling could intensify, and the ETH/USDT pair may decline to $3,250 and subsequently to the critical support at $3,056. However, if the price breaks above $3,679, it could retest $4,000, with $4,500 as the next potential hurdle.
BNB turned down from $620 on March 29, indicating profit booking by short-term traders. The 20-day EMA ($562) is an important support level to watch out for, as a break below it could push the BNB/USDT pair to $496. However, if the price rebounds from the 20-day EMA, it would indicate positive sentiment and buying on dips. The bulls would then attempt to push the price to $645, and a break above this level could lead to a rally to $692.
Solana also turned down from the overhead resistance of $205, suggesting aggressive selling. The pair could reach the 20-day EMA ($180), an important support level to monitor. If the price rebounds from the 20-day EMA, it would indicate continued bullish sentiment and enhance the prospects of a break above $205, potentially pushing the pair towards $267. However, if the price drops below the 20-day EMA, it would signal bearish sentiment, and the pair may decline to the 50-day SMA ($147).
XRP has formed a symmetrical triangle pattern, indicating indecision between the bulls and bears. The flattish 20-day EMA and the RSI just below the midpoint do not provide a clear advantage to either side. To suggest an upward move, the bulls would need to push the price above the triangle, targeting the resistance at $0.74. On the other hand, if the price breaks below the triangle, it would indicate bearish control, with a potential drop to $0.52.
Dogecoin is struggling to break above the $0.23 resistance level, and bears are attempting to sink the price below the 20-day EMA ($0.18). If successful, selling could intensify, and the DOGE/USDT pair may drop to the 50-day SMA ($0.14). Conversely, a break above $0.23 would suggest a bullish trend and a potential rally to $0.30.
Cardano’s failure to rise above the $0.68 resistance indicates bearish activity at higher levels. The bears have pushed the price below the immediate support at $0.63 and may attempt to extend the decline to the solid support at $0.57. If the price rebounds from $0.57, the ADA/USDT pair may remain range-bound between $0.57 and $0.68. However, if the price falls below $0.57, it may signal a deeper correction to $0.46. To regain control, the bulls would need to push the price above $0.68.
Lastly, Avalanche has managed to stay above the 20-day EMA ($53) but hasn’t seen a strong rebound. The recent selling brought the AVAX/USDT pair to the $50 support level, which is crucial as a break below it could accelerate selling and push the pair to $42. A break above the downtrend line would invalidate the negative view and potentially lead to a rise to $60 and then to the overhead resistance at $65.
It’s important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their own research before making any decisions.