US stocks extended losses from the week of June 13. The S&P 500 hit a new year-to-date low and slipped into bear market territory, down more than 20% from its all-time high set on Jan. 1. 4.
Crypto markets are tracking stocks lower and selling pressure has intensified amid rumors of a liquidity crisis at major lending platform Celsius and the possibility that traders could sell positions to meet margin calls. This puts the total cryptocurrency market cap below $1 trillion.
The sharp decline has led some analysts to forecast extremely pessimistic targets. While anything is possible in the market and it’s hard to call a bottom, a capitulation usually begins to form. Traders may prepare their buy lists and consider building up in stages after prices stop falling.
What are the important levels that could stop Bitcoin (BTC) and major altcoins from falling? Let’s study the chart of the top 10 cryptocurrencies to find out.
Bitcoin fell below immediate support at $28,630 on June 11. This accelerated the sell-off, with the bears pulling the price below key support at $26,700 on June 12. This indicates that the downtrend has resumed.
The bears maintained selling pressure on June 13 and sent the BTC/USDT pair to an intraday low $22,600. The sharp decline over the past few days has pulled the Relative Strength Index (RSI) into oversold territory. This points to a possible rally or consolidation in the coming days.
Any recovery could face a sell-off in the $26,700 to $28,630 range. If the bears turn this area into resistance, it will indicate that market sentiment remains negative. The trader can then try again to resume the downtrend. A break below $22,600 could take the pair towards the psychological level of $20,000.
The bulls will have to push and sustain the price above $28,630 to suggest that the bears may be losing control.
Ethereum (ETH) broke below the important support level of $1,700 on June 10, indicating that the bears are in control. This marks the start of the next downtrend.
Selling momentum picked up on June 11, with bears pulling prices below strong support at $1,300. This shows that traders are gripped by fear and are selling their positions.
Aggressive selling over the past three days has pulled the RSI below 22. Historically, the ETH/USDT pair started to rally when the RSI fell close to 21. This suggests that the pair may try to rally towards the $1,700 breakdown level.
Alternatively, if the bears maintain selling pressure, the pair could drop to the psychological support at $1,000.
The failure of the bulls to push BNB back into the triangle may have attracted strong selling from the bears on June 11. Selling momentum has picked up and the price has fallen near strong support at $211.
If the price bounces off $211, it would indicate accumulation at lower levels. Buyers will then try to push the price above the 20-day exponential moving average ($289). If successful, it would suggest that the BNB/USDT pair could remain range-bound between $211 and $350 for a few days.
Conversely, if the bears sink the price below $211, it will signal the start of the next downtrend. The psychological level of $200 is likely to provide minor support, but if that level gives way, the next level of support could be at $186.
Cardano (ADA) dipped below the 20-day EMA ($0.56) on June 10 and the bulls attempted to push the price back above the June 11 levels, but encountered a strong sell-off at higher levels.
The bears have pulled the price to a strong support area between $0.44 and $0.40. This area is likely to attract strong buying from the bulls, as a break below it could signal a resumption of the downtrend. The ADA/USDT pair can then start heading south towards the next major support at $0.30.
Alternatively, if the price rises from current levels, the bulls will try to push the pair above the 50-day simple moving average (SMA ($0.61). If this happens, the pair is likely to trade between $0.74 and $0.40 A few days in between.
Ripple (XRP) broke and closed below support at $0.38 on June 11. This completes a bearish descending triangle pattern, indicating that sellers have the upper hand.
Selling gained momentum, with bears pulling prices below key support at $0.33 on June 13. This indicates the start of the next downtrend. Short-term bears are likely to profit near the $0.30 pattern target.
If they do, the XRP/USDT pair may start to rally, possibly reaching the $0.33 and $0.38 breakdown levels. Alternatively, if the bears sink the price below $0.30, the pair could drop to the next strong support at $0.24.
Solana (SOL) has been hovering between the 20-day EMA ($40) and $35 for a few days. This uncertainty resolved the downtrend on June 11 as bears pulled prices below support.
This accelerated the sell-off, with the bears pulling the price below immediate support at $30. The next support on the downside is $22, followed by $20.
The sharp sell-off over the past few days has pushed the RSI into oversold territory. This suggests a relief rally or consolidation is likely in the short-term. The bulls will try to push the price above the $35 breakdown level and the 20-day EMA. If they are successful, it will suggest that the current collapse could be a bear trap.
Dogecoin (DOGE) traded in a narrow range extending to the downside on June 10. The bears pulled the price below the May 12 intraday low of $0.07 on June 11, indicating that the downtrend has resumed.
Selling momentum gained further, with bears pulling the DOGE/USDT pair to psychological support at $0.05. This level can act as short-term support, as the severely oversold level of the RSI suggests a possible relief rally.
On the upside, the bears will try to stall the recovery at the $0.07 breakdown level. If the price turns down from this resistance, the bears will try to resume the downtrend and sink the pair to $0.04. The first sign of strength will be a breakout and close above the 20-day EMA ($0.08).
Related: How to Survive a Bear Market?Tips for Beginners
The failure of the bulls to push Polkadot (DOT) back into the symmetrical triangle attracted aggressive selling by the bears on June 10. This started a downward move that dragged the price below the key support at $7.30.
The bulls are attempting to push the price back above the $7.30 breakdown level. If they manage to do so, it would suggest that a break below $7.30 could be a bear trap. The DOT/USDT pair could then rise to the 20-day EMA ($9.17).
Alternatively, if the price fails to rise above $7.30, it will indicate that the bears have reversed this level as resistance. This could resume the downtrend, with the next stops at the psychological $5 level, followed by the pattern target at $4.23.
UNUS SED LEO (LEO) has been trading within a descending channel for the past few weeks. Bears challenged around $5.60 but found it difficult to sink the price below the 20-day EMA ($5.24).
If the price bounces off the current levels and rises above $5.60, the LEO/USD pair is likely to gradually rise towards the resistance line of the channel. The bears are likely to aggressively defend this level.
If the price turns down from the resistance line, the bears will try to sink the pair below the 20-day EMA. If this happens, the pair may gradually decline towards the support line. Such a move would suggest that the pair may extend its stay inside the channel.
The next trend may begin after the bulls push the price above the resistance line or the bears sink the price below the support line.
A narrow trade in Avalanche (AVAX) between the 20-day EMA ($24) and key support at $21 resolved the downtrend on June 11. This indicates the resumption of the downtrend.
On June 12, the selling momentum picked up and broke the $18 support. There is a small support level at $15, but if this level breaks, the AVAX/USDT pair could drop to the next strong support level at $13.
While the downward sloping moving averages suggest favoring sellers, oversold levels on the RSI suggest that the short-term sell-off may be overdone. This could lead to a rally to the $21 breakdown level. The bulls will have to push the price above the 20-day EMA to signal that the bears may be losing control.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading action involves risk. You should do your own research when making a decision.
Market data is provided by the HitBTC exchange.