Price analysis 1/31: BTC, ETH, BNB, ADA, SOL, XRP, LUNA, DOGE, DOT, AVAX
Bitcoin (BTC) started the 2022 on a losing note, dropping about 20% to its worst performance in January since 2018 when the price plunged 26.61%, according to on-chain analytics resource Coinglass.
Now, all eyes turn to February, which has historically favored the bulls. The only two negative closes in February were in 2020 and 2014.
One positive sign during the recent price decline has been that the long-term hodlers have not panicked. Glassnode data shows that the number of coins that last moved between five and seven years ago surged to a new all-time high.
Daily cryptocurrency market performance. Source: Coin360El Salvador's President Nayib Bukele projected a “gigantic price increase” for Bitcoin. Bukele’s prediction is based on the fact that if the millionaires of the world, who are more than 50 million in number, want to buy at least one Bitcoin, there isn’t enough supply to fulfill that demand.
Could Bitcoin and the major altcoins end the month on a strong note? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin has pulled back in a strong downtrend. In a sliding market, the sentiment is to sell on rallies rather than buy the dips as traders make more money on the downside.
BTC/USDT daily chart. Source: TradingViewThe first sign of a change in sentiment will be a break and close above the 20-day exponential moving average ($39,318). Such a move will indicate that demand exceeds the supply near the 20-day EMA resistance. The BTC/USDT pair could then march toward the 50-day simple moving average ($43,791).
Conversely, if the price turns down from the current level or the 20-day EMA, it will suggest that bears are defending this level aggressively. The pair could then dip to $35,507.01. If this support cracks, the selling could pick up and the price could retest the Jan. 24 low at $32,917.17.
This is an important level for the bulls to defend because if it cracks, the pair could plummet to the strong support at $30,000.
ETH/USDT
Ether (ETH) is facing resistance near the breakdown level at $2,652 but a minor positive is that bulls have not given up much ground. This suggests that traders are buying the dips as seen from the long tail on today’s candlestick.
ETH/USDT daily chart. Source: TradingViewThe bulls will now again try to push the price above $2,652 and the critical resistance at the 20-day EMA ($2,802). If they succeed, it will suggest that the selling pressure could be reducing. The bulls will then see an opening and attempt to push the pair to the resistance line of the channel.
Contrary to this assumption, if the price turns down from the current level or the 20-day EMA, the bears will attempt to pull the ETH/USDT pair to the $2,300 to $2,159 support zone. The bears will have to sink and sustain the price below this zone to clear the path for a further decline to $1,700.
BNB/USDT
Binance Coin (BNB) re-entered the channel on Jan. 25, but the recovery faltered near $400. This suggests that the bears have not yet given up and are selling on rallies.
BNB/USDT daily chart. Source: TradingViewIf bears sink and sustain the price below the channel, the BNB/USDT pair could again retest the critical support zone at $330 to $320. The downsloping moving averages and the RSI in the negative territory indicate that sellers hold the edge.
The pair could plummet to $250 if the $320 support gives way as several traders are likely to panic and rush to the exit. This negative view will invalidate in the short-term on a break and close above the 20-day EMA. The pair could then rise to the resistance line of the channel.
ADA/USDT
The failure of the bulls to secure a meaningful rebound off the psychological support at $1 indicates a lack of aggressive buying at this level. The bears will now attempt to build upon their advantage and sink Cardano (ADA) below $1.
ADA/USDT daily chart. Source: TradingViewBoth moving averages are sloping down and the RSI is in the negative zone, indicating that the bears are in command. A break and close below $1 could signal the start of the next leg of the downtrend.
The ADA/USDT pair could first drop to $0.80 and then to the support line of the channel. The bulls will have to push and sustain the price above the resistance line of the channel to signal a change in trend.
SOL/USDT
Solana (SOL) has been consolidating in a tight range between $80.83 and $104.82 for the past few days. The bulls tried to push the price above the range but failed and now the bears will try to grab the opportunity and attempt to pull the altcoin below $80.83.
SOL/USDT daily chart. Source: TradingViewIf they succeed, the SOL/USDT pair could resume its downtrend. The pair could first drop to the support line of the channel where the bulls may attempt to arrest the decline. If they fail in their endeavor, the pair could plunge to $66.03.
On the contrary, if the price rebounds off $80.83, the pair may extend its stay inside the range for a few more days. The buyers may gain strength if they push and sustain the pair above the breakdown level at $116.
XRP/USDT
Ripple (XRP) has been consolidating between $0.54 and $0.65 for the past few days. After failing to cross above the overhead resistance, the price could now drop to the support of the range.
XRP/USDT daily chart. Source: TradingViewThe downsloping moving averages and the RSI in the oversold territory indicate advantage to bears. The critical level to watch on the downside is $0.54 because if it cracks, the XRP/USDT pair could drop to $0.50.
This level is likely to act as a strong support as a break and close below it could lead to panic selling. On the upside, a break and close above the 20-day EMA ($0.66) will be the first sign that bulls are on a comeback.
LUNA/USDT
Terra’s LUNA token is struggling to sustain the rebound off the support line of the descending channel. This indicates that sentiment is negative and demand dries up at higher levels.
LUNA/USDT daily chart. Source: TradingViewIf the bounce again fails to sustain the higher levels, the sellers may smell an opportunity and try to sink the LUNA/USDT pair below the channel. If they succeed, the pair could drop to $37.50 which may act as a strong support.
If the current rebound sustains, the bulls will try to start a relief rally, which could reach the 20-day EMA ($63). If the price turns down from this resistance, the pair could again turn toward $37.50. Alternatively, if bulls push the pair above the 20-day EMA, the rally could reach the downtrend line of the channel.
Related: Ethereum price risks dropping to $2K on ‘bear flag’ setup
DOGE/USDT
Dogecoin (DOGE) has been consolidating between $0.13 and $0.15 for the past few days. This suggests that bulls are buying near the support but have not succeeded in pushing the price above the overhead resistance.
DOGE/USDT daily chart. Source: TradingViewA minor positive is that the RSI has formed a bullish divergence indicating that the selling pressure may be reducing. However, if buyers fail to drive the price above $0.15, the bears may regroup and again attempt to pull the DOGE/USDT pair below the support.
A close below $0.13 could result in further selling, driving the pair to the psychological level at $0.10. The bulls will have to push and sustain the price above the 50-day SMA ($0.16) to ward off the short-term threat from the bears.
DOT/USDT
Polkadot’s (DOT) weak rebound off the strong support at $16.81 indicates a lack of buying at current levels. The downsloping moving averages and the RSI near the oversold territory indicate the path of least resistance is to the downside.
DOT/USDT daily chart. Source: TradingViewIf bears sink and sustain the price below the $16.81 to $15.83 support zone, it will indicate the resumption of the downtrend. The DOT/USDT pair could then drop toward the strong support at $10.37.
Contrary to this assumption, if the price rises from the current level, the bulls will make one more effort to propel the pair above the 20-day EMA ($20.98). If they succeed, the pair could rise to the breakout level at $22.66 where the bears may pose a strong challenge.
AVAX/USDT
Avalanche (AVAX) is facing stiff resistance at the breakdown level at $75.50, which suggests that the sentiment remains negative and bears are selling on rallies. The downsloping moving averages and the RSI in the negative territory indicate that bears have the upper hand.
AVAX/USDT daily chart. Source: TradingViewThe sellers will now try to sink the price below the immediate support at $61.06. If they manage to do that, the AVAX/USDT pair could drop to the strong support zone at $51.04 to $47.66. The bulls are likely to defend this zone with vigor.
A strong bounce off the support zone could brighten the prospects of a bottoming formation with the price remaining stuck between $47.66 and $75.50 for a few days.
The first sign of strength will be a break and close above $75.50. Alternatively, a drop below $47.66 could signal the 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 investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.