Bitcoin (BTC) is on course to end the week with a sharp drop of around 9%. This suggests that some traders may book profits amid fears of a resumption of the downtrend. Analysts expect bitcoin to reach the $26,600-$25,000 zone where buying interest could increase.
When an asset emerges from a bear market, it attempts to make higher lows on the way up. These levels act as strong support on subsequent corrections. The current pullback could end up forming a higher bottom for Bitcoin that could serve as a launch pad for the next rally.
Daily crypto market data view. Source: Coin360
If long-term investors think a bottom has been reached, then panicking and selling every correction is not a good strategy. Rather, each decline could be an opportunity to build a portfolio.
Bitcoin’s correction has dragged several altcoins lower. Only a handful of major cryptocurrencies are holding out and looking strong on the charts. Let’s study the charts of five cryptocurrencies that could outperform on the way up.
Bitcoin price analysis
Buyers are attempting to halt bitcoin’s correction at the 50-day simple moving average ($26,983), but the slight bounce suggests the bears are not ready to give up.
BTC/USDT daily chart. Source: TradingView
The 20-day exponential moving average ($28,606) has started turning down and the Relative Strength Index (RSI) is in negative territory, suggesting the bears have a slight advantage. Selling could pick up further if the 50-day SMA breaks.
The BTC/USDT pair could then drop to the $25,250 breakout level. This is an important level to watch because if this support breaks, the pair could drop to $20,000.
Buyers need to push and hold the price above the 20-day EMA to signal a comeback. That could attract buyers and propel the price towards the $31,000-$32,500 resistance zone.
BTC/USDT 4 hour chart. Source: TradingView
The pair rebounded from $27,125 and hit the 20-EMA. This is the first hurdle the bulls must clear to initiate a strong recovery. The pair could then reach the 50-SMA where the bears will once again attempt to mount strong defenses.
If the price turns down from the current level and falls below $27,125, it will indicate that sentiment remains negative with traders selling on any small rallies. That will increase the chances of a drop to $26,500 and eventually $25,250.
BNB price analysis
BNB (BNB) is witnessing an uphill battle between bulls and bears. Sellers are active above $338 while the bulls are fiercely defending the 50-day SMA ($316).
BNB/USDT daily chart. Source: TradingView
The BNB/USDT pair rebounded from the 50-day SMA on April 21 and the bulls are attempting to scale the $338 barrier. If successful, it will increase the prospects of a rally above $346. The pair could then rise towards $400. The gradual rising 20-day EMA ($325) and the RSI in the positive territory suggest that the bulls have a slight advantage.
If bears want to prevent the upward move, they need to pull the price back below the 50-day SMA. That could accelerate the selling and take the pair down to $300 and then $280.
BNB/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows that the price has recovered from the support near $316 and has reached the 50-SMA. If the bulls clear this obstacle, the pair will attempt to scale to $338 and then $346. A break above this level could witness increasing bullish momentum.
The first support to watch on the downside is the 20-EMA. If this support gives way, it will suggest that the pair could consolidate between $315 and $335 for some time. The advantage will tip in the bears’ favor if the $315 support gives way.
Cardano price analysis
Cardano (ADA) turned lower and plunged back below the neckline of the inverse H&S pattern on April 20. This suggests that the bears are trying to trap the aggressive bulls. A small advantage in favor of buyers is that they are attempting to protect the 50-day SMA ($0.37).
ADA/USDT daily chart. Source: TradingView
The 20-day EMA ($0.40) has turned down and the RSI is just below the midpoint, suggesting that the sellers are trying to take control. If the price breaks below the 50-day SMA, it will indicate that the bears are in the driver’s seat. The ADA/USDT pair could then break down to $0.30.
Conversely, if buyers are to maintain their supremacy, they must quickly push the price back above the neckline. If they succeed, the pair could see solid buying. The pair could then rally to $0.46.
ADA/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows that the bears have pulled the price below the uptrend line and are attempting to reverse the level into resistance on a retest. The falling 20-EMA and the RSI in the negative territory indicate that the bears have the upper hand. If the price drops below $0.38, selling could intensify and the pair could drop to $0.34.
This negative view will be invalidated in the short term as buyers push the price back above the uptrend line. Such a move suggests the recent collapse may have been a bear trap. The recovery is likely to gain momentum after buyers pushed the price above the 50-SMA.
Related: Chinese city officials will start receiving digital yuan salaries from May
Monero price analysis
Monero (XMR) turned down from the neckline of the developing inverse H&S pattern, but the sharp rebound from lower levels suggests aggressive buying on dips.
XMR/USDT daily chart. Source: TradingView
Buyers have pushed the price back above the 20-day EMA ($157) and will again attempt to challenge the neckline. If this level scales, it will complete the bullish setup and pave the way for a possible move to $185 and thereafter the $199 pattern target.
When the price turns down from the current level or the neckline, it signals that bears are selling on rallies. A break and a close below $149 will signal that the bears have taken control. The XMR/USDT pair could then drop to $145 and later to $140.
XMR/USDT 4 hour chart. Source: TradingView
The pair is trading within a descending channel pattern on the 4-hour chart. The snapback from the channel’s support line shows solid buying at lower levels. If buyers sustain the price above the 50-SMA, the pair could rally to the channel’s resistance line.
Conversely, if the price continues to decline and breaks below the 20-EMA, it will suggest that the pair could remain stuck in the channel for some time. The bears will gain the upper hand on a break below the channel.
Toncoin price analysis
Toncoin (TON) has formed a bearish descending triangle pattern, but a positive sign in favor of buyers is that the price has been trading near the triangle’s resistance line for the past few days.
TON/USDT daily chart. Source: TradingView
The bulls will try to push the price above the resistance line and sustain it, which will invalidate the bearish setup. A breakdown of a negative pattern usually leads to upward movement as aggressive traders who may have gone short in anticipation of a pullback cover their positions.
Additionally, bullish traders who have been on the sidelines due to the negative setup are jumping in to buy. Above the resistance line, the TON/USDT pair could rally to $2.64 and $2.90 thereafter.
This bullish view will be invalidated in the short term if the price turns down and falls below $2.20.
TON/USDT 4 hour chart. Source: TradingView
The 4 hour chart shows the pair rising within an ascending channel pattern. In the short-term, the bears are trying to protect the $2.33 level, but the bulls continue to attack the level vigorously.
If the $2.33 level gives way, the pair could start its journey towards the channel’s resistance line near $2.45. If the price turns down from $2.33 again, the bears will attempt to sink the pair to the channel support line.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
This article is for general informational purposes and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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