- May 2, 2022
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
BTC and altcoins are holding at their current support levels, but this week’s comments from the Federal Reserve could be a determining factor in short-term price action.
The U.S. equity markets opened on a tentative note on May 2 but a minor positive is that the crypto markets led by Bitcoin (BTC) are holding above their immediate support levels. The price action over the next few days will be dictated by the outcome of the Federal Open Markets Committee (FOMC) on May 4.
If the Fed springs a negative surprise, the markets could react with a knee-jerk reaction to the downside. On the other hand, if the policy meets market expectations, the equity and crypto markets could attempt a recovery.
If history were to repeat itself, Bitcoin could witness a large move in the month of May. According to data from on-chain analytics platform Coinglass, Bitcoin rose more than 50% in May on two occasions in the past nine years, once in 2019 and another in 2017.
In comparison, the worst fall was in 2021 when Bitcoin plunged by more than 35%. Considering the increased volatility since 2017, traders should be ready for a possible roller-coaster ride.
Could Bitcoin and altcoins sustain the recovery? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin bounced off the support line of the ascending channel on May 1, indicating that the bulls are buying the dips to this level. The buyers will now attempt to push the price above the 20-day exponential moving average (EMA)($39,824).
If they manage to do that, it will suggest that the bears may be losing their grip. The positive divergence on the relative strength index (RSI) also suggests that the bearish momentum may be reducing.
Above the 20-day EMA, the BTC/USDT pair could rally to the 50-day simple moving average (SMA) ($41,970). A break and close above this level could clear the path for a rally to the 200-day SMA ($47,154).
Conversely, if the price once again turns down from the 20-day EMA, it will suggest that bears continue to sell on every minor rally. That could enhance the prospects of a break below the channel.
If that happens, the selling momentum could increase and the pair could plummet to $34,300 and later to $32,917.
ETH/USDT
Ether (ETH) started a recovery on May 1 but the bears are in no mood to let go of their advantage. The long wick on May 2’s candlestick suggests that bears continue to sell near the 20-day EMA ($2,939).
The bears will now try to sink the price to the uptrend line. This is an important level to keep an eye on because a break and close below it could clear the path for a possible decline to the next support at $2,450.
Conversely, if the price turns up from the current level or rebounds off the uptrend line, it will suggest that the bulls are trying to keep the ascending triangle pattern intact. A break and close above the 50-day SMA ($3,059) could open the doors for a possible up-move to the 200-day SMA ($3,451).
BNB/USDT
BNB turned down from the 50-day SMA ($411) on April 29 and broke below the support at $391 on April 30. The buyers attempted to push the price back above $391 on May 1 but are facing selling at higher levels.
If the price turns down from the current level or the 20-day EMA ($401), it will suggest that the sentiment remains negative and traders are selling near overhead resistance levels. That could clear the path for a possible drop to the strong support at $350.
This negative view could invalidate in the short term if the bulls push and sustain the price above the 50-day SMA. If they do that, the BNB/USDT pair could rally to $431 and later attempt an up-move to the 200-day SMA ($469).
SOL/USDT
Solana (SOL) broke below the support line of the ascending channel on April 29, invalidating the pattern. The selling continued on April 30 and the price dipped to $82.
The buyers attempted to push the price back into the channel on May 1 but the long wick on the day’s candlestick suggests that bears sold at higher levels.
If the price fails to climb back into the channel, the SOL/USDT pair could decline to the strong support at $75. This is an important level for the bulls to defend because the failure to do so may resume the downtrend.
On the upside, a break and close above the 50-day SMA ($103) will suggest that the bears may be losing their grip.
XRP/USDT
Ripple (XRP) plummeted below the $0.62 support on April 29 and the bears extended the decline to $0.56 on April 30. The price rebounded on May 1 indicating buying at lower levels.
The bulls are currently trying to push the price above the breakdown level at $0.62. If they succeed, the recovery could reach the 20-day EMA ($0.68).
This is an important level to keep an eye on because if the price turns down from this level, it will suggest that the bears are active at higher levels. The pair may then drop to the strong support at $0.55. A break below this support could open the doors for a drop to $0.50.
Alternatively, if bulls drive the price above the 20-day EMA, the pair could rise to the 50-day SMA ($0.76). Such a move will suggest that the XRP/USDT pair could consolidate in a large range between $0.55 and $0.91 in the near future.
LUNA/USDT
Terra’s LUNA token bounced off the strong support at $75 on May 1, indicating that the bulls are trying to defend this level. However, the bears are unlikely to surrender easily as they will try to stall the recovery at the downtrend line.
If the price turns down from the downtrend line, the bears will make another attempt to pull the LUNA/USDT pair below $75. If they succeed, the pair could complete a bearish head and shoulders pattern.
The bulls will attempt to arrest the decline at the 200-day SMA ($70) but if this support cracks, the selling could pick up momentum and the pair may plummet to $50.
On the contrary, a break and close above the downtrend line could suggest that the bears may be losing their grip. That could clear the path for a possible rally to the psychological resistance at $100.
ADA/USDT
Cardano (ADA) dropped to the strong support at $0.74 on April 30, signaling that bears remain under control. The price rebounded off the support on May 1 but the bulls are struggling to sustain the higher levels.
This suggests that bears are selling on every minor rally. The bears will now try to sink and sustain the price below the strong support at $0.74. If they manage to do that, the selling could accelerate and the ADA/USDT pair may resume its downtrend. The next support on the downside where buying may emerge is $0.68.
Contrary to this assumption, if the price turns up from the current level or rebounds off $0.74, the bulls will try to push the pair above the 20-day EMA ($0.87). If that happens, the pair could attempt a rally to $1.
Related: XRP price rebounds after worst month since June 2021 — major recovery ahead?
DOGE/USDT
Dogecoin (DOGE) slipped below the 50-day SMA ($0.13) on April 29 but the bears could not challenge the strong support at $0.12. This suggests that bulls continue to buy at lower levels.
The buyers attempted to push the price above the 50-day SMA on May 1 but the bears were not willing to relent. This suggests that the DOGE/USDT pair could oscillate between the 20-day EMA ($0.13) and $0.12 for a few days.
If bears sink the price below $0.12, the pair could drop to the psychological support at $0.10. The bulls are expected to defend this level with vigor. Alternatively, if bulls drive the price above the 20-day EMA, the possibility of a rally to $0.17 increases.
AVAX/USDT
Avalanche (AVAX) broke below the strong support at $65 on April 29 and followed that up with another down move on April 30. The buyers started a recovery on May 1 and are currently attempting to push the price back above the breakdown level at $65.
The sellers will attempt to flip the $65 level into resistance. If they do that, the AVAX/USDT pair could extend the decline to the strong support at $51.
This is an important level for the bulls to defend because a break and close below it may intensify selling. The pair may then resume its downtrend and plummet to the next major support at $32.
Conversely, if bulls push the price above $65, the pair may rise to the 20-day EMA ($70). A break and close above this level will suggest that the selling pressure may be reducing. That could keep the pair range-bound between $51 and $99 for some time.
DOT/USDT
Polkadot (DOT) plunged below the $16 support on April 30 and reached the critical support at $14. A minor positive is that the price bounced off $14 on May 1, indicating buying by the bulls.
The rebound is facing selling at the breakdown level of $16 as the bears are trying to flip the previous support into resistance. If the price fails to rise above $16, the possibility of a break below $14 increases. If that happens, the DOT/USDT pair could resume its decline and plunge to the psychological level at $10.
To invalidate this view, the bulls will have to push and sustain the price above the 20-day EMA ($17). If they manage to do that, the pair may rise to $19 where the bears may again pose a strong challenge.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
