JPMorgan Chase has emerged as the winner in the auction to acquire the deposits and a “substantial majority of assets” of the troubled bank First Republic, marking the failure of the third regional bank in the United States since March and exposing the vulnerabilities in the legacy banking system. This news comes as Bitcoin (BTC) has risen for four consecutive months from January through April, a feat it last achieved in 2013.
The recovery in Bitcoin is facing a stiff hurdle above $30,000, indicating that the bulls are wary of buying at higher levels. This could be due to the upcoming Fed’s meeting on May 2 and 3, which is known to cause an increase in short-term volatility. It remains to be seen whether the recovery will extend in May, as historical data does not give a clear advantage either to the bulls or the bears in May. The performance is split right in the middle with five positive and five negative monthly closes in May, according to Coinglass data.
Looking at the top-10 cryptocurrencies, what are the levels that the bulls need to defend on Bitcoin and select altcoins if they want to keep the chances alive for the continuation of the up-move? Let’s study the charts.
The S&P 500 index (SPX) bounced off the 50-day simple moving average (4,035) on April 26 and has reached the overhead resistance of 4,200 on May 1. However, the bears are expected to mount a strong defense in the zone between 4,200 and 4,325. If the price turns down from the overhead zone but does not fall below the moving averages, it will suggest that the sentiment is turning positive and traders are buying the dips. That will increase the likelihood of a break above 4,325. If that happens, the index could accelerate toward 4,500 and then 4,650. If bears want to gain the upper hand, they will have to quickly yank the price below the 50-day SMA, which could sink the index to the uptrend line.
After trading between the 100.82 support and the 20-day exponential moving average (101.93) for the past few days, the U.S. dollar index (DXY) is trying to break out of the range. The relative strength index (RSI) has been gradually rising toward the center, indicating that the selling pressure is reducing. If buyers sustain the price above the 20-day EMA, the index could rally to the 50-day SMA (103.05). Such a move will suggest that the index may extend its stay inside the 100.82 to 106 range for a few more days. If bears want to strengthen their position further, they will have to tug the price below 100.82. That will complete a bearish head and shoulders pattern, starting a possible downtrend toward 97.50.
The long wick on Bitcoin’s April 30 candlestick shows that the bears are aggressively defending the overhead resistance at $30,000. The price turned down and slumped on May 1 but a minor positive is that the bulls are fiercely protecting the 50-day SMA ($28,146). This suggests that the BTC/USDT pair may swing between $26,942 and $30,000 for a while. Usually, a tight-range trading is followed by a range expansion. If the price continues lower and plunges below $26,942, the pair may decline to the crucial support at $25,250. On the contrary, if the range expands above $30,000, the pair is likely to rise to $31,000 and thereafter to $32,400. A break above this level will signal a pick-up in momentum.
The bulls are struggling to push and sustain the price above the 20-day EMA ($1,896) in Ethereum (ETH), indicating that the bears are trying to flip this level into resistance. The 20-day EMA has started to turn down gradually and the RSI has dipped below 45, indicating that bears have a slight edge. If bears sink and sustain the price below $1,785, the ETH/USDT pair could drop to the 61.8% Fibonacci retracement level of $1,663. Contrary to this assumption, if the price turns up from the current level, the bulls will again try to propel the pair above the psychological level of $2,000. If they succeed, the pair can rally to the stiff overhead resistance of $2,200.
BNB (BNB) rebounded off the 50-day SMA ($323) on April 30, indicating that the bulls continue to guard this level with full force. The price action of the past few days has formed a symmetrical triangle pattern, indicating indecision among the buyers and sellers. The 20-day EMA ($328) is sloping up gradually and the RSI is just above the midpoint, indicating a minor advantage to the bulls. If buyers drive the price above the triangle, it will signal the start of a new up-move. The BNB/USDT pair could then rally to the pattern target of $380 and subsequently to $400. The bears are likely to have other plans. They will try to sink the pair below the support line of the triangle and deepen the correction to $280.
XRP’s (XRP) recovery hit a wall at the 20-day EMA ($0.47) on April 29, which suggests that the sentiment is negative and traders are selling on rallies. The bears will try to pull the price to the strong support at $0.43. This is an important level to keep an eye on because if it cracks, the XRP/USDT pair may collapse to the next major support at $0.36. The first sign of strength will be a break and close above the 20-day EMA. Such a move will suggest that the bears are losing their grip. That could open the doors for a possible rally to the resistance line. If bulls overcome this barrier, the pair could surge toward $0.56.
Buyers are finding it difficult to push Cardano (ADA) above the 20-day EMA ($1.27), which suggests that bears are selling on rallies. The 20-day EMA is sloping down gradually and the RSI is in the negative territory, indicating that bears have the upper hand. If bears sink the price below $1.15, the ADA/USDT pair could drop to the next support at $1. On the other hand, if the price turns up from the current level, the bulls will again try to push the pair above the 20-day EMA. If they succeed, the pair could rally to the overhead resistance at $1.48.