Equity markets across Europe are closed in the red, and US markets are also facing strong selling pressure as investors fear the rise in COVID-19 cases will stall a fragile economic recovery. This intensification of negative sentiment also pushed the price of gold and bitcoin (BTC) higher, while the US dollar index rose.
Bitcoin has mostly functioned as a nasty asset in 2020, except for short periods when it followed the S&P 500 or gold. Therefore, investors should look to the long term and not panic over short term fluctuations.
A grayscale study shows that the number of investors familiar with bitcoin has grown from 53% in 2019 to 62% this year. The poll also showed that around 55% of respondents showed interest in Bitcoin investment products this year, up from 36% in 2019.
With an increase in the participation of both individual and institutional investors, crypto markets can become less vulnerable to manipulation, and this, in turn, can attract more investment.
When an asset goes into a correction, you know what strong support levels can help traders make a more informed decision. So let’s examine the cards of the top 10 cryptocurrencies to determine the critical levels that can attract buyers.
Bitcoin / US dollar
Bitcoin (BTC) plummeted below the critical total resistance of $ 13,973.50, indicating gains from short-term traders and a possible short entry by aggressive bears.
If the price closes below $ 13,041.5, the BTC / USD pair will form a bearish immersive candlestick, which is a warning sign that the trend may reverse. The first stop in the back is the 20-day exponential moving average ($ 12,289).
A break below this support would indicate weakening bullish momentum, and this could lead to intensified selling, pushing the price back to the 50-day moving average ($ 11,238).
However, with the moving average moving up and the RSI correcting towards overbought levels, the bulls are likely to buy the fall to the 20-day moving average.
A strong rebound from this support will indicate a bullish sentiment when traders buy on a dip.
ETH / USD
The rebound of the 20-day moving average ($ 385) on October 26 failed to hold the higher levels on October 27 as the bears were selling on the rally. This resulted in Ether (ETH) being well below its 20-day moving average today.
If the bears keep the price below the 20-day EMA, it is likely to fall to the uptrend line. A break during this support could pull ETH / USD to the next support at $ 333 and then to $ 308,096.
However, if the price rebounds from the current level and rises above the $ 400-420 resistance zone, it will indicate an advantage for the bulls. At over $ 420, a couple can start their journey at $ 450 and then at $ 488,134.
XRP / US dollar
XRP continues to trade within a range as the moving averages and the RSI indicator just below the midpoint indicate a balance between supply and demand. If the bears manage to pull back and keep the price below the 50-day SMA ($ 0.245), the entire currency could drop to $ 0.2295.
A break below the support zone of $ 0.2295 to $ 0.2197 could tip into a bear-favoring advantage. However, if the price bounces off the support zone, the XRP / USD pair could extend its stay in this zone for a few more days.
Contrary to this assumption, if the pair bounces off the 50-day simple moving average and rises above the $ 0.26 resistance level, it would indicate that the bulls are in control. Above $ 0.26, the pair may start an upward movement to $ 0.30.
BCH / USD
On Oct 26, Bitcoin Cash (BCH) bounced off the 20-day EMA ($ 256) and the bulls are currently trying to push the price above the $ 280 overall resistance and then $ 326.30.
Bullish moving averages and an RSI above 62 indicate that the bulls are in control. However, the RSI has formed a negative divergence and a potentially symmetrical triangle.
If the RSI breaks above the triangle, it will increase the likelihood of an upward movement in the Bitcoin Cash / USD pair. Conversely, if the RSI breaks below the triangle, it will indicate the beginning of a decline.