The US Dollar Index (DXY) has broken through its March 2020 highs and may next test the January 2017 multi-year highs. Bitcoin (BTC) generally moves in the opposite direction to the DXY. As long as the dollar continues its strong upward trend, a meaningful rally in bitcoin could be difficult.
Although bitcoin has yet to find a bottom, institutional investors are starting to buy at the lower levels. The Purpose Bitcoin ETF bought 1,132 BTC, according to data analytics platform Coinglass. Behavioral analytics service Santiment also noted that investor interest in buying the drop is at its highest level in six weeks.
The crypto sector is under pressure so far in 2022. However, venture capital activity has not diminished in various blockchain sectors. In the first quarter of 2022, over $14.6 billion in venture capital was invested in the blockchain industry. This corresponds to 48% of all venture capital investments in 2021. This shows the long-term growth potential of the industry.
Can Bitcoin and Altcoins bounce off their support levels? Let’s look at the charts for that.
BTC/USDT
Bitcoin’s April 26 rally stalled at the 20-day EMA at $40,618. This suggests sentiment remains negative and traders are selling on rallies. On the positive side, however, the price recovered from the support of the bullish channel on April 27, signaling that the bulls are trying to defend this level.
If the rally continues, the bulls will again attempt to push the price above the 20-day EMA and 50-day SMA at $42,038. If successful, BTC/USDT could stay in the channel for a few more days.
However, if the price declines from the current levels or the 20-day EMA and breaks below the channel, it will indicate that the bears have the upper hand. The pair could then drop to $34,300 and then $32,917.
ETH/USDT
Ether (ETH) again turned down the 20-day EMA at $3,014 on April 26, indicating that the bears continue to sell rallies. The bears will now try to drive the price down to the uptrend line.
If the bears cause the price to drop below the uptrend line, ETH/USDT could slide towards $2,450. The bulls will attempt to stop the decline at this level. However, if they fail, the selling could intensify and the pair could drop to $2,159.
However, if the price recovers from its current levels, the buyers will again try to push the pair above the 20-day EMA. If they succeed, the pair could climb to $3,200. Then, the 200-day SMA will be approached at $3,470.
BNB/USDT
BNB closed below immediate support at $391 on April 26, suggesting near-term weakness. The bulls are currently trying to push the price back above the neck line.
If successful, the price might rally to the 20-day EMA ($408). This is an important resistance to watch because if the bulls overcome this hurdle, the BNB/USDT pair could rise to $431 and later attempt a rally to $460.
Contrary to this assumption, if the bears tip the $391 level into resistance, the BNB/USDT pair could resume its downtrend and drop towards the strong support at $350. The 20-day EMA is down and the RSI is in oversold territory. This shows that the path of least resistance is down.
XRP/USDT
The long tail of Ripple (XRP) on the April 25th candlestick shows strong buying at lower levels. However, the bulls were unable to hold the price above $0.70 on April 26, leading to further selling.
The 20-day EMA is falling and the RSI is in the negative zone. This suggests that the bears have the upper hand. If the price breaks below the immediate support at $0.62, the XRP/USDT pair could drop to the strong support at $0.55.
Contrary to this assumption, if the price rebounds from the current level, the bulls will make another attempt to push and hold the pair above the breakdown level at $0.69. If successful, it might rally to the 50-day SMA ($0.77).
SOL/USDT
The bulls have been defending the rising channel support for the past couple of days, failing to push Solana (SOL) above the 20-day EMA at $103. This shows that there are fewer and fewer buyers at the higher levels.
The 20-day EMA is falling and the RSI is below 44. This signals an advantage for sellers. If the price declines from the current levels or the 20-day EMA, the likelihood of a drop below the bullish channel increases. If that happens, SOL/USDT could slide towards its strong support at $75.
However, if the price recovers from the current levels and breaks out of the 20-day EMA, it will indicate a buy at the support. The pair could then rally to $110. A breakout and close above this level will signal that the pair could stay in the channel for a few more days.
LUNA/USDT
Terra’s LUNA token has been swinging above and below the 20-day EMA ($91) for the past few days. The bulls were able to move the price above the 50-day SMA at $94 on April 25, but failed to sustain the uptrend.
The bears took the price back below $26 on March 20. If the price slips and holds below $86, the LUNA/USDT pair could continue to slide towards the strong support at $75. The bulls are likely to defend this level very fiercely.
If the price rises from the current level and breaks above the 50-day SMA, the bulls will once again attempt to propel the pair above the psychological resistance at $100. If successful, the pair could hit the all-time high at $119.
The flat 20-day EMA and the RSI just below the midpoint do not give a clear advantage to either the bulls or the bears.
ADA/USDT
After repeatedly failing to break above the psychological level at $1, Cardano (ADA) gradually fell towards the strong support at $0.74.
The downward sloping 20-day EMA ($0.93) and the RSI near the oversold territory indicate an advantage for the bears. The sellers will now attempt to sink the ADA/USDT pair below the strong support at $0.74. If successful, the pair could resume the downtrend.
Contrary to this assumption, if the price rises from the current level or the $0.74 support, the bulls will attempt to push the pair above the 20-day EMA. If they do, the pair could rise to $1. A break and close above this resistance could allow a rally to $1.26 and then to $4.86.
In this context: Former BitMEX CEO Explains How Bitcoin Will Hit $1 Million by 2030
AVAX/USDT
It has ranged from $65 to $99 in recent days. Price has gradually drifted towards range support where buyers are expected to mount a strong defense.
If the price bounces off the current level, the bulls will attempt to push the AVAX/USDT pair above the 20-day EMA ($76). If they succeed, it would be a first sign that the bears are fading. A break and close above the 200-day SMA ($85) could open the doors for a potential rally to $99.
Alternatively, if the price declines from the current level or the 20-day EMA and breaks below $65, it could open the way down to $51. The 20-day EMA is down and the RSI is in oversold territory. This shows that the path of least resistance is down.
Dogecoin (DOGE) climbed to overhead resistance at $0.17 on April 25, but the bulls were unable to overcome this barrier. Failure to do so may have attracted profit booking by short-term traders, which pushed the price back below the 20-day EMA ($0.14) on April 26.
The 20-day EMA is flat and the RSI is near the midpoint, suggesting limited short-term action. If the price breaks below the 50-day SMA ($0.13), the DOGE/USDT pair could drop to $0.12. The bulls will likely defend this level vigorously, but if they fail to stop the decline, the next stop could be the psychological level at $0.10.
The next trend move could begin after the bulls push and hold the pair above $0.17 or the bears lower the price below the support at $0.10. Until then, a volatile range-bound action is likely to continue.
DOT/USDT
Polkadot (DOT) has been stuck in a range between $23 and $16 for several days. This means that traders buy the dips up to the support of the range and sell on the rallies up to the resistance level.
The price has recovered from the support and the bulls are now trying to move the ONE/USDT pair above the 50-day SMA ($19.39). If successful, it will suggest that the pair could extend its stay inside the range for a few more days.
Conversely, if the price slips and holds below $16, it will indicate that the supply exceeds the demand. The pair could then fall to the critical support at $14. This is an important level for bulls to defend, as a break below could signal a resumption of the downtrend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every stage of investing and trading involves risk. Research well before making a decision.
Market data comes from HitBTC-stock Exchange.