Cryptocurrency prices have fallen below their respective support levels, raising concerns that the bulls may be losing their grip. This has led to profit booking by traders, leaving long-term investors wondering whether this is an opportunity to build their portfolios or a sign of a trend reversal. Bollinger Bands creator John Bollinger has advised traders to pay attention to this development, as Bitcoin has turned down from the upper Bollinger Band and reached the middle bank near its breakout level.
Bitcoin fell below the 20-day exponential moving average ($28,869) on April 19, indicating weakness. Although buyers tried to stage a recovery on April 20, they could not overcome the barrier at the 20-day EMA, suggesting that the bears are trying to flip the level into resistance. The BTC/USDT pair may next slip to $26,500 and thereafter to the neckline of the inverse head and shoulders (H&S) pattern at $25,250. If the price rebounds off $25,250, it will indicate that the neckline is acting as a higher floor, and the bulls will then try to propel the price back above the 20-day EMA.
Ether (ETH) has also fallen below the 20-day EMA ($1,942) on April 21, and the bears have maintained their selling pressure. The first support on the downside is the 38.2% Fibonacci retracement level of $1,846, which is likely to attract strong buying by the bulls. If the price turns up from this level, it improves the prospects for a rally to $2,200. Contrary to this assumption, if the price continues lower and breaks below $1,846, the ETH/USDT pair could tumble to the 50% retracement level of $1,755 and thereafter to the 61.8% retracement level of 1,663.
BNB (BNB) rebounded off the $318 support on April 21 and rose above the 20-day EMA ($324), suggesting that the bulls are making a strong effort to arrest the decline at $318. The flattish 20-day EMA and the relative strength index (RSI) just above the midpoint do not give a clear edge either to the bulls or the bears. If bulls thrust the price above the $338 to $350 resistance zone, the BNB/USDT pair may pick up momentum and soar toward $400. On the contrary, if the price once again turns down and breaks below $318, it will suggest that the bears remain active at higher levels, and the pair may then slump to the 200-day simple moving average ($295), an important level for the bulls to defend.
XRP (XRP) has been trading inside a large range between $0.56 and $0.30 for a while, and the bulls have been unable to push the price above the 20-day EMA ($0.49) on April 19 and 20. The bears maintained their selling pressure and pulled the price below the 50% Fibonacci retracement level of $0.47, suggesting that the XRP/USDT pair may next drop to the 200-day SMA ($0.41). If the price rebounds off the 200-day SMA, the pair may trade in the upper half of the range while a break below it may keep the pair stuck in the lower half.
Cardano (ADA) has fallen back below the neckline of the inverse H&S pattern on April 20, suggesting that the bears are making a comeback. If bears pin the price below the neckline, it will signal that the breakout on April 13 may have been a bull trap, leading to long liquidation that may extend the decline to the 200-day SMA ($0.35), which is likely to attract solid buying by the bulls. The flattish 20-day EMA ($0.40) and the RSI near the center do not give a clear advantage either to the bulls or the bears. If bulls want to come out on top, they will have to sustain the price above the neckline, and the ADA/USDT pair may then rise to $0.46.
Dogecoin (DOGE) has witnessed hugely volatile moves on April 19 and 20, with the bulls trying to hold the 200-day SMA ($0.08) but facing stiff resistance from the bears. If the price turns down from the 20-day EMA ($0.09), it will suggest that the bears are selling on every minor rally, increasing the risk of a collapse below the 200-day SMA. If that happens, the DOGE/USDT pair may dive to the crucial support at $0.07. However, this negative view will be invalidated if the price turns up from the current level and soars above $0.10, indicating solid buying near the 200-day SMA, and the pair may then reach $0.11 where the bulls may again face formidable resistance from the bears.
In conclusion, the recent pullback in cryptocurrency prices has left traders wondering whether to buy or sell. While short-term traders may be worried about the correction, long-term investors see it as an opportunity to build their portfolios with cryptocurrencies of their choice. It is important to avoid buying on the way down and wait for the price to stop falling before resuming purchases. Traders should also pay attention to the support levels of each cryptocurrency, as they may act as strong support or resistance levels.
