Bitcoin (BTC) slipped below the $40,000 support on Jan. 22, but the bears could not sustain the lower levels. The price has risen above $40,000 again, but some analysts expect the bleeding to continue. Chris Burniske, partner at crypto venture capital firm Placeholder, said in a post on X (formerly Twitter) that he would not be surprised to see Bitcoin drop to mid-to-high 20,000 levels before a bottom is made.
One of the major reasons for Bitcoin’s recent fall has been the massive liquidations in the Grayscale Bitcoin Trust (GBTC). However, JPMorgan analysts said in a Jan. 25 market report that the bulk of the profit taking in GBTC has “happened already,” meaning “most of the downward pressure on Bitcoin from that channel should be largely behind us.”
Every bull market has its share of corrections, which helps shake out the weak hands and allow the stronger hands to buy at lower levels. During a correction, waiting for a support level to be established before buying is generally a good strategy.
What are the important support levels in Bitcoin and altcoins that may hold? Let’s analyze the charts of the top 10 cryptocurrencies to find out.
Bitcoin price analysis
The bulls purchased Bitcoin’s dip near $37,980 on Jan. 23, pushing the price to the 20-day exponential moving average ($41,904) on Jan. 26.
The BTC/USDT pair is likely to face a stiff battle between the bulls and the bears near the moving averages. If the pair ascends the 50-day simple moving average ($42,904), the next stop could be $44,700. The bulls may again face stiff opposition from the bears at this level.
If the price turns down from the current level or the overhead resistance, the pair may remain range-bound between $44,700 and $37,980 for a while. A slide below the $37,980 could start the downward move to $34,800.
Ether price analysis
The long tail on Ether’s (ETH) Jan. 25 strategy shows that the bulls are trying to protect the nearby support at $2,168.
The ETH/USDT pair will attempt to pull back to the downtrend line, which is likely to act as a stiff barrier. If the price turns down from the overhead resistance, it will signal that the sentiment remains negative and traders are selling on rallies. That could enhance the prospects of a drop to $2,100. Buyers are expected to fiercely defend the level.
Conversely, a rise above the moving averages will be the first indication that the selling pressure is reducing. The bullish momentum may pick up on a rally above $2,400.
BNB price analysis
BNB (BNB) has bounced off the strong support at $288, indicating that the bulls are aggressively buying at this level.
The 20-day EMA ($304) is flattening out, and the RSI is near the midpoint, indicating a balance between supply and demand. If the price rises above the 20-day EMA, the BNB/USDT pair could rise to the downtrend line. This is the key level to watch out for because a break above it could drive the pair to $338.
Instead, if the price turns down from the 20-day EMA or the downtrend line, it will suggest that the pair may remain inside the descending triangle pattern for a few more days. A break below $288 will complete the bearish setup, which has a target objective of $238.
Solana price analysis
The bears pulled Solana (SOL) below the 61.8% Fibonacci retracement level of $87 on Jan. 22 but could not capitalize on this strength.
The bulls have pulled the price toward the moving averages, which are likely to act as a stiff resistance. But if buyers shove the price above the downtrend line, it will suggest that the corrective phase may be over. The SOL/USDT pair could first rise to $107 and thereafter attempt a rally to $117.
Instead, if the price turns down from the downtrend line, it will signal that the bears hold the edge. Sellers will have to sink the price below $79 to open the doors for a possible drop to $64.
XRP price analysis
The bulls are trying to arrest XRP’s (XRP) decline at $0.50, but the weak recovery suggests a lack of demand at higher levels.
Both moving averages are sloping down, and the RSI is near the oversold zone, indicating that the bears are in the driver’s seat. If the price turns down from the 20-day EMA ($0.55), sellers will try to tug the price below $0.50 and challenge the next support at $0.46.
On the upside, a rise above the 20-day EMA will be the first sign that the bears are losing their grip. The XRP/USDT pair will then try to climb to the downtrend line, where the bulls are likely to face stiff resistance from the bears.
Cardano price analysis
Cardano (ADA) bounced off the support line of the descending channel pattern on Jan. 23, and after a brief hesitation, the bulls are trying to extend the relief rally to the 20-day EMA ($0.51) on Jan. 26.
The downsloping 20-day EMA and the RSI in the negative zone indicate that the bears have the upper hand. They will try to halt the rally at the 20-day EMA. If they manage to do that, the ADA/USDT pair may retest the channel’s support line. If this level gives way, the selling could intensify, and the pair may plummet to the next support at $0.35.
If bulls want to prevent the downside, they will have to drive the price above the 20-day EMA. If they do that, the pair is likely to climb to the downtrend line, where the bears are expected to mount a strong defense.
Avalanche price analysis
Avalanche (AVAX) has started a relief rally, and the bulls have pushed the price above the overhead resistance at $31.
The recovery is likely to hit a wall at the 20-day EMA ($33.81), which is sloping down. If the price turns down sharply from the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on rallies. The AVAX/USDT pair may then retest the low at $27.24. A break below this level could risk a drop to $24.
Instead, if bulls drive the price above the 20-day EMA, it will suggest strong demand at lower levels. The pair could then climb to the overhead resistance at $38.
Dogecoin price analysis
Dogecoin (DOGE) has been facing selling at the downtrend line, but the bears have not been able to sink the price below the $0.07 support.
The bulls will again try to defend the $0.07 level with vigor. If the price rebounds off $0.07, the DOGE/USDT pair could climb to the downtrend line. Buyers will have to overcome this barrier to indicate that the correction may be over. The pair could then attempt a rally to the $0.10 to $0.11 resistance zone.
Meanwhile, the bears are likely to have other plans. They will try to yank the price below the strong support of $0.07. If they do that, the pair could move downward to $0.06.
Polkadot price analysis
Polkadot (DOT) completed a head-and-shoulders pattern with a close below the neckline on Jan. 22. The bears tried to start a down move, but the bulls purchased the dip on Jan. 23, and the price recovered to the neckline of the pattern.
If the price climbs back above the neckline, it will suggest that lower levels are attracting solid buying by the bulls. The 20-day is likely to act as a strong hurdle, but if the bulls overcome it, the DOT/USDT pair may pick up momentum and climb to $8.50.
Contrarily, if the price turns down from the neckline or the 20-day EMA, it will suggest that the bears are active at higher levels. A drop below $5.97 could start the next leg of the downtrend to $4.80.
Chainlink price analysis
Chainlink (LINK) has been consolidating inside the $12.85 to $17.32 range for several days, indicating indecision between the buyers and sellers about the next directional move.
It is difficult to predict the direction of the breakout of a range with certainty. Hence, it is better to wait for the breakout to happen before taking directional bets. Until then, traders generally buy the dips to the support and sell near the resistance of the range.
The price may dip to $12.85, where buying is likely to pick up. A break above the moving averages will increase the likelihood of a rally to $17.32. This view will be invalidated if the LINK/USDT pair turns down sharply and plunges below $12.85. That will signal the start of a downward move to $10.50.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.