The opening of US stock markets on May 2 was not spectacular. On the bright side, crypto markets are holding above their immediate support levels, led by Bitcoin (BTC). How the price will move in the next few days depends on the outcome of the May 4 FOMC meeting.
If the Fed were to surprise negatively, the markets could react with an instinctive correction. On the other hand, if the result is in line with general expectations, the stock and crypto markets could attempt a recovery.
Looking back, Bitcoin could see a big move in May. According to data from on-chain analytics platform Coinglass, Bitcoin jumped more than 50% twice in the past nine years in May. It was once in 2019 and once in 2017.
In comparison, the biggest drop in May came in 2021, when Bitcoin fell more than 35%. With increased volatility since 2017, traders should be prepared for the ups and downs.
Can Bitcoin and Altcoins continue the recovery? Let’s look at the charts for that.
BTC/USDT
Bitcoin rallied to the support line of the rising channel on May 1, signaling that the bulls are buying the dips at this level. The buyers will now try to push the price above the 20-day EMA at $39,824.
If they succeed, it indicates that the bears are beginning to lose their power. The RSI is in positive territory, also indicating that the bearish momentum is weakening.
If BTC/USDT moves above the 20-day EMA, the pair could rally to the 50-day SMA at $41,970. A break and close above this level could set the stage for a rally towards the 200-day SMA at $47,154.
However, if the price declines from the 20-day EMA, this will indicate that the bears will continue to sell on any rally, no matter how small. It also increases the likelihood that the price will fall below the channel.
If that happens, the sell-off could rise and the pair could drop to $34,300 and then to $32,917.
ETH/USDT
Ether (ETH) gradually recovered on May 1, but the bears continue to fight back. The long wick on the May 2 candle suggests that the bears will continue to sell at the 20-day EMA at $2,939.
The bears will now attempt to drive the price down towards the uptrend line. This level is definitely a watch to watch as a drop and close below could open the door to the next support at $2,450.
On the other hand, if the price moves up from its current level or recovers from the uptrend line, it signals that the bulls are trying to keep the ascending triangle intact. A breakout and close of the 50-day SMA at $3,059 could allow a rally towards the 200-day SMA at $3,451.
XRP/USDT
Ripple (XRP) broke below the $0.62 support on April 29 and the bears were able to take advantage of the decline, sending the price down to $0.56 on April 30. The price rallied on May 1, suggesting buying at lower levels.
The bulls are currently attempting a rally above the falling $0.62 level. If successful, the price could rally to the 20-day EMA at $0.68.
This level should be watched because if the price drops from this level, it will signal that the bears are activating at the higher levels. The pair could then fall to the strong support at $0.55. A break below this support could trigger a drop to $0.50.
On the other hand, if the bulls can move the price above the 20-day EMA, the pair might rally to the 50-day SMA at $0.76. Such a rise would signal that XRP/USDT could settle in a wide range of $0.55 to $0.91.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and every transaction involves risk. Research well before making a decision.
Market data comes from the crypto exchange HitBTC.
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