Price analysis 10/27: BTC, ETH, BNB, ADA, SOL, XRP, DOT, DOGE, SHIB, LUNA
Bitcoin (BTC) has broken back below the psychological support at $60,000. While this seems to be negative in the short term, the price action has continued to mirror its movement in 2017. If the similarity continues for the remainder of the year, Bitcoin bulls may be in for a party.
PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, recently proclaimed in a tweet that the second leg of Bitcoin’s bull market has begun. If Bitcoin’s price action continues to follow the S2F model, the analyst believes a rally to $100,000 to $135,000 may be possible by the end of the year.
Although Bitcoin garners the lion’s share of attention, cryptocurrency exchange Okcoin said in a recent report that institutional investors’ appetite for non-Bitcoin crypto assets has been growing. The report said that 53% of the purchases done in September by institutional investors were in altcoins.
Is the current fall in Bitcoin a buying opportunity or the start of a deeper correction? How are the altcoins expected to react? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin failed to retest the overhead resistance zone at $64,854 to $67,000 on Oct. 25, which may have prompted short-term traders to book profits. That has pulled the price down to the strong support at the 20-day exponential moving average ($58,948).
A break and close below the 20-day EMA will be the first sign that the bullish momentum may be weakening. If bulls fail to reclaim the level quickly, the selling could accelerate and the BTC/USDT pair could slide to $52,920.
The relative strength index (RSI) has dropped to the midpoint and the 20-day EMA is flattening out, suggesting a balance between supply and demand.
This advantage will tilt in favor of the bears if the pair slides and sustains below the 50-day simple moving average ($51,556). On the other hand, a breakout to a new all-time high will indicate that bulls are back in command.
The bulls tried to resume the uptrend in Ether (ETH) on Oct. 26 and 27 but could not sustain the price above $4,200. This suggests that bears are active at higher levels.
The sellers have pulled the price to the 20-day EMA ($3,869), which is an important support to keep an eye on. A strong bounce off the 20-day EMA will suggest that the sentiment remains positive and traders are buying the dips. The bulls will then again try to resume the uptrend.
On the contrary, if the 20-day EMA cracks, it will signal that traders may be booking profits and supply exceeds demand. The bears will then try to pull the price to the 50-day SMA ($3,488).
Binance Coin (BNB) turned down from the overhead resistance and broke below the 20-day EMA ($462) today. This is the first sign that the bullish sentiment could be weakening.
The long tail on today’s candlestick shows that bulls are attempting to defend the neckline of the inverse head and shoulders pattern.
If they succeed, the BNB/USDT pair could again try to rally to the overhead resistance at $518.90. A break and close above this resistance could signal the resumption of the uptrend.
Conversely, a close below the neckline could pull the price to the 50-day SMA ($423). If this support is breached, the next stop could be $392.20. The flattish moving averages and the RSI near the midpoint do not indicate a clear advantage either to bulls or bears.
Cardano’s (ADA) tight range trading between the 20-day EMA ($2.15) and the support line of the symmetrical triangle resolved to the downside today. This suggests that bears have asserted their supremacy.
The sellers pulled the price below $1.87 today but the long tail on the candlestick suggests that bulls are attempting to defend the support. The recovery attempt is likely to face strong resistance at the 20-day EMA.
If the price turns down from the 20-day EMA, the bears will again try to break the $1.87 support. If that happens, the ADA/USDT pair could resume the down move toward the pattern target at $1.58.
The bulls will have to push and sustain the price above the resistance line of the triangle to invalidate the negative view.
Solana (SOL) broke above the overhead resistance at $216 on Oct. 25 but the bulls could not sustain the breakout. This may have attracted profit-booking by short-term traders, pulling the price to the 20-day EMA ($177).
The long tail on today’s candlestick suggests that sentiment remains positive and bulls are buying on dips to the 20-day EMA. The buyers will now again try to push the price above the overhead resistance.
If they succeed, the SOL/USDT pair could resume the uptrend with the next target objective at $239.83. Contrary to this assumption, if bears pull the price below $171.47, the pair could extend the drop to the trendline. A break below this support will signal a possible trend change.
The bulls pushed XRP above the downtrend line on Oct. 26 but could not sustain the higher levels as seen from the long wick on the day’s candlestick. This may have trapped the aggressive bulls, resulting in strong selling today.
A close below the $1 support will complete a descending triangle pattern that could pull the price down to the strong support zone at $0.88 to $0.85. If this zone fails to arrest the decline, the XRP/USDT pair could extend the slide to the pattern target at $0.77.
The 20-day EMA ($1.08) is flat but the RSI has dropped into the negative zone, indicating that the bears are attending a strong comeback. This negative view will invalidate if bulls push and sustain the price above the downtrend line. That could clear the path for a possible rally to $1.24.
Polkadot’s (DOT) failure to rise above the overhead resistance at $46.39 on Oct. 26 may have prompted selling by short-term traders. This pulled the price down to the strong support at $38.77 today.
The long tail on today’s candlestick shows that bulls are defending the support with vigor. If buyers push the price above $46.39, the DOT/USDT pair could resume its up-move and challenge the all-time high at $49.78.
Alternatively, if bulls fail to clear the overhead hurdle, the pair may consolidate between $46.39 and $38.77 for a few days. A break and close below $38.77 could signal the start of a deeper correction to the 50-day SMA ($35.14).
Related: Shiba Inu could surpass Dogecoin after a 700% SHIB price rally in October
Dogecoin (DOGE) turned down from $0.28 on Oct. 24, indicating that traders are liquidating positions on rallies. The bulls again tried to push the price above the $0.27 overhead resistance on Oct. 26 but failed.
The selling accelerated today after bears pulled the price below the 20-day EMA ($0.24). This resulted in a decline close to the strong support zone at $0.21 to $0.19. The long tail on the day’s candlestick suggests that traders continue to defend the support zone.
The 20-day EMA has flattened out and the RSI is just below the midpoint, suggesting a possible range-bound action in the near term. The next trending move could start on a break above $0.28 or a close below $0.19.
SHIBA INU (SHIB) is in a strong uptrend. The long wick on the Oct. 24 candlestick shows that bears tried to stall the up-move at $0.00004465 but they could not sustain the selling pressure. Buying resumed on Oct. 25 and the meme coin resumed its northward march.
The strong up-move has pushed the RSI near the 90 level, which suggests that the rally may be overextended in the short term. However, this does not guarantee the start of a correction because the RSI had reached above 93 on Oct. 6 before a pullback happened.
The bulls have pushed the SHIB/USDT pair above the 161.8% Fibonacci extension level at $0.00006531. If the price sustains above this level, the next stop could be the 200% extension level at $0.00007586.
Vertical rallies are rarely sustainable and they usually end with waterfall declines. Therefore, chasing prices higher after the recent rally may be risky.
Terra protocol’s LUNA token broke above the overhead resistance at $45.01 on Oct. 26 but the bulls could not sustain the higher levels as seen from the long wick on the day’s candlestick.
The bears sensed an opportunity and pulled the price below the $39.75 support today, but a minor positive is that bulls bought the dip to the 50-day SMA ($38.16). If the price sustains above $39.75, the bulls may again try to push the LUNA/USDT pair toward $45.01.
Conversely, if the price breaks below the 50-day SMA, the pair could drop to the strong support zone at $34.86 to $32.50. This is an important zone for the bulls to defend because a break below it could accelerate selling.
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.
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