Traders tend to lighten up positions before important events because they hate uncertainty. The United States Federal Reserve’s policy decision is on Feb. 1, where the central bank is expected to hike rates by 25 basis points.
Market observers will keenly watch for any hints about how high the rates could go. That could be one of the reasons for the profit-booking in Bitcoin (
Blockware Solutions head analyst Joe Burnett believes that Bitcoin will not break above its all-time high of $69,000 until the next Bitcoin halving which is scheduled to occur in March 2024. Burnett anticipates Bitcoin’s next bull market top to be between $150,000 to $350,000, which isa massive increase from the current levels.
What are the important support levels to watch out for in Bitcoin and the altcoins? Let’s study the charts to find out.
SPX
After several failed attempts, the S&P 500 closed above the downtrend line on Jan. 26. However, the bears are not willing to surrender without a fight.
The sellers are trying to halt the recovery at 4,101, but the up-sloping 20-day exponential moving average (3,972) and the relative strength index (RSI) in positive territory indicates that the path of least resistance is to the upside. If buyers thrust the price above 4,101, the index could start its journey toward 4,325.
Alternatively, if the bears yank the price below the moving averages, several aggressive bulls may get trapped and the index could then tumble to 3,764.
DXY
The U.S. dollar index (DXY) is falling inside a descending broadening wedge pattern but the bulls are trying to protect the support at 101.29.
The bounce could face selling at the 20-day EMA (102.63) because bears defended this level during downtrends. If the price turns down from the 20-day EMA, the likelihood of a break below 101.29 increases. That could tug the index to the psychologically crucial level of 100.
On the contrary, if the index rises above the 20-day EMA, it will suggest strong demand from the bulls. The index could then rise toward the resistance line of the wedge. The bulls will have to clear this hurdle to suggest that the short-term downtrend may have ended.
BTC/USDT
Bitcoin rose above the resistance at $23,816 on Jan. 29 but the bulls could not build upon the momentum on Jan. 30. That may have tempted short-term traders to book profits and the price has dropped down toward $22,800.
If the price rebounds off $22,800, it will suggest that bulls have flipped the level into support. That could increase the likelihood of a rally to $25,211. Sellers are likely to guard this level with all their might because if $25,211 is conquered, the BTC/USDT pair could dash toward the $30,000 to $32,000 zone.
On the other hand, if bears pull the price below $22,800, the correction could deepen to the 20-day EMA ($21,716) and then to the psychological support at $20,000.
ETH/USDT
Ether (ETH) once again reached near the overhead resistance at $1,680 but the bulls could not overcome this obstacle. That means the price remains stuck between the 20-day EMA ($1,540) and $1,680.
If the price rebounds off the 20-day EMA, it will suggest strong buying on dips. The bulls will then again try to thrust the price above $1,680. If they succeed, the ETH/USDT pair could rally toward $2,000 with a brief stop near $1,800.
Contrary to this assumption, if the price turns down and tumbles below the 20-day EMA, it could attract profit-booking by the short-term bulls. The pair could then decline to the 50-day SMA ($1,365), which may act as a strong support.
BNB/USDT
BNB (BNB) touched the strong resistance of $318 on Jan. 29 but the bulls could not overcome this barrier. This indicates that bears are fiercely defending the level.
The immediate support on the downside is the 20-day EMA ($298). Although the upsloping 20-day EMA suggests advantage to buyers, the negative divergence on the RSI indicates that the positive momentum could be weakening. The selling could accelerate on a break below the 20-day EMA and the BNB/USDT pair could slide to $280.
Contrarily, if the price turns up from the 20-day EMA, the bulls will again attempt to drive the pair above $318. If they manage to do that, the pair could soar to $360.
XRP/USDT
XRP’s (XRP) price is getting squeezed between the 20-day EMA ($0.40) and the overhead resistance at $0.42.
Usually, a tight consolidation near the overhead resistance gives an edge to the buyers but when the bulls fail to surpass the hurdle even after repeated attempts, some traders may book profits.
That could start a deeper correction and in this case, a break below the 20-day EMA could open the doors for a drop to the 50-day SMA ($0.37).
If bulls want to maintain their dominance, they will have to quickly kick the XRP/USDT pair above the $0.42 to $0.44 resistance zone. That could start a rally to $0.51.
DOGE/USDT
The bears are not allowing Dogecoin (DOGE) to sustain above $0.09 and the bulls are not letting it dip below the 20-day EMA ($0.08).
If the price turns up from the current level, the bulls will again try to force the DOGE/USDT pair above $0.09. If they can pull it off, the pair could soar to $0.11 where the bears may again mount a strong defense.
Conversely, if the price breaks below the 20-day EMA, the next stop could be the 50-day SMA ($0.08). This level could act as a minor support but if bears sink the price below it, the pair could collapse to the critical support near $0.07.
Related: Bitcoin price pares weekend gains as another CME ‘gap’ lurks below $20K
ADA/USDT
After trading above the $0.38 resistance for three days, Cardano (ADA) dropped below the breakout level on Jan. 30. This indicates that bears are active at higher levels.
The rising 20-day EMA ($0.36) indicates advantage to buyers but the negative divergence on the RSI warns that the bulls may be losing their grip. The bears will try to yank the price to the 20-day EMA, which is an important level to keep an eye on in the near term.
If the price plummets below the 20-day EMA, the selling could increase and the ADA/USDT pair may fall to $0.32.
Contrarily, if buyers want to maintain their dominance, they will have to quickly thrust the price above $0.40. The pair could then travel to $0.44.
MATIC/USDT
Polygon’s (MATIC) up-move met with heavy selling near $1.20 on Jan. 29. The price could retest the breakout level of $1.05, which is an important level to keep an eye on.
If the price springs back from $1.05, it will signal that bulls have flipped the level into support. The buyers will then try to propel the price above $1.20 and challenge the strong resistance near $1.30.
On the other hand, if the price dives below the 20-day EMA ($1.02), it will suggest that the breakout above $1.05 may have been a bull trap. The MATIC/USDT pair could then tumble to the 50-day SMA ($0.89).
DOT/USDT
Polkadot (DOT) has been struggling to sustain above the resistance line for the past few days, which indicates that bears are fiercely defending this level.
The sellers will try to pull the price back below the 20-day EMA ($6). If they manage to do that, it could tilt the near-term advantage in favor of the bears. The DOT/USDT pair could then decline to $5.50 and later to the 50-day SMA ($5.20).
Conversely, if the price bounces off the 20-day EMA, the bulls will try to clear the overhead zone between the resistance line and $6.84. If that happens, the pair could rally toward $8. There is a minor support at $7.42 but that is likely to be crossed.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
