A recovery in U.S. stocks appears to have been the catalyst for a rally in Bitcoin and select altcoins.
Bitcoin (BTC) remains anchored below $27,000, with weakness over the past few days adding to analyst calls for a drop to the low $20,000s. While anything is possible, it is unlikely that the bulls will abandon the $25,000 support without a fight.
In a May 24 comment, Checkmate, Glassnode’s lead on-chain analyst, said that the sell-side risk ratio indicator shows that “sellers are exhausted on both sides,” suggesting a big move “is coming.” The last time the sell-side risk ratio was this low was in late 2015, which kicked off a bull run to $20,000 in December 2017.
Daily cryptocurrency market performance. Source: Coin360
Another short-term positive was that market watchers expected a debt ceiling agreement, which boosted US stock prices on May 26. If risk-on sentiment persists, it could boost demand for bitcoin and some altcoins.
What are the key resistance levels for Bitcoin and major altcoins that need to be broken to begin a sustained recovery? Let’s examine the charts of the top 10 cryptos to find out.
Bitcoin Price Analysis
Bitcoin rebounded from $25,871 on May 25, approaching the strong support zone of $25,811 to $25,250. The bulls will attempt to push the price above the 20-day exponential moving average ($27,173).
BTC/USDT daily chart. Source: TradingView
This level could again attract strong selling from the bears. If the price turns down from the 20-day EMA, it will indicate negative sentiment for bears to sell on rallies.
The key level to watch on the downside is $25,250. The bulls are expected to defend this support with all their might, as if this level collapses, the BTC/USDT pair could drop to $24,000 and eventually $20,000.
Conversely, if the bulls break above the overhead resistance at the 20-day EMA, the pair could rise to the resistance line. Buyers will have to overcome this hurdle to signal that the correction may be over.
Ethereum Price Analysis
Ether (ETH) has been trading inside a falling wedge pattern for the past few days. On May 25, the bears attempted to pull the price down to the support line of the wedge, but as seen by the long tail of the candlestick, the bulls aggressively bought the dip.
ETH/USDT daily chart. Source: TradingView
The bulls are attempting to push and sustain the price above the 20-day EMA ($1,829). If they succeed, the ETH/USDT pair could rise to the resistance line. This is an important level to watch closely, as a break above it will increase the odds of a rally to $2,000.
If the price turns down from the current level or the resistance line, it will indicate that the bears remain active at higher levels. This could keep the pair inside the wedge for a few more days.
BNB price analysis
BNB (BNB) dipped near the $300 horizontal support on May 26, but the long tail on the candlestick showed bullish buying.
BNB/USDT daily chart. Source: TradingView
The 20-day EMA ($311) remains a key resistance to watch on the upside. If the price turns down again from this level, it will increase the chances of a break below $300. If this level gives way, the BNB/USDT pair could slip to the support line of the descending channel pattern.
Conversely, if the price rises and breaks above the 20-day EMA, it will indicate strong demand at lower levels. The pair may then try to bounce back to the resistance line. Buyers must clear this hurdle to signal a rally to $350.
Ripple Price Analysis
On May 24 and 25, the bears pulled Ripple (XRP) below the 20-day EMA ($0.45), but were unable to sustain lower levels. This suggests that market sentiment has turned positive, with traders buying dips at the 20-day moving average.
XRP/USDT daily chart. Source: TradingView
The price is still stuck between the moving averages, indicating indecision between bulls and bears. A breakout and close above the 50-day simple moving average ($0.47) will tip the edge in favor of the bulls. Then, the XRP/USDT pair could start a northerly journey to $0.54 and then to $0.58.
Alternatively, if the price breaks and sustains below the 20-day EMA, it will indicate that the bears are back. The pair could then drop to the critical support level of $0.40.
Cardano Price Analysis
Cardano (ADA) is witnessing an intense race between bulls and bears near the rising trendline. The bears are attempting to sink the price below the rising trend line, but the bulls are defending this level fiercely.
ADA/USDT daily chart. Source: TradingView
The downsloping 20-day EMA ($0.37) and the RSI near 42 suggest that bears have the upper hand. Sellers must pull the price below $0.35 to start the next leg down to $0.30.
If the bulls want to take control, they will have to push the ADA/USDT pair higher and hold it above the moving averages. This would open the door for a possible rally to the overhead resistance at $0.44, where the bears could mount a strong defense again.
Dogecoin Price Analysis
On May 25, the bears pulled Dogecoin (DOGE) below the $0.07 support level, but the long tail on the candlestick shows that the bulls are trying to protect the level.
DOGE/USDT daily chart. Source: TradingView
If the bulls want to stop the bears from attacking again, they will have to maintain their buying pressure and push the price above the 20-day EMA ($0.07). Another hurdle is $0.08, but if it breaks, the DOGE/USDT pair could start a move up to $0.10.
Conversely, if the price turns down from current levels or from the 20-day EMA, it will suggest that bears sold on every small increase. This will increase the chances of a break below $0.07 and the pair could drop to $0.06.
Polygon price analysis
Polygon (MATIC) declined from the 20-day EMA ($0.89) on May 25, but the bears were unable to sustain the lower levels. Strong buying by the bulls took the price above the 20-day moving average on May 26.
MATIC/USDT daily chart. Source: TradingView
Buyers attempted to extend the relief rally above the 50-day SMA ($0.98), but the long wicks on the day’s candlestick indicated that bears were active at higher levels. If the buyers can turn the 20-day EMA into support, the MATIC/USDT pair could make another attempt to touch the downtrend line.
Conversely, if the price pulls back and breaks below the 20-day EMA, it will indicate oversupply. The pair could then drop to the important support level of $0.82. If this level gives way, a drop to $0.69 cannot be ruled out.
Bitcoin hits ‘decision point’ – 4 BTC price indicators to watch
Solana Price Analysis
The bulls managed to protect the $18.70 support on May 24 and 25, but they were unable to initiate a strong rally in Solana (SOL). This indicates a lack of demand at the top.
SOL/USDT daily chart. Source: TradingView
Time is running out for the bulls. If they don’t start recovering quickly, the bears will try to further consolidate their positions by pulling the price below the $18.70 support. If they do, the SOL/USDT pair could start its journey south towards $16.
The first sign of strength will be a breakout and close above the downtrend line. The pair could then move up to the 50-day SMA ($21.65). A break above this level will indicate the start of a move up to $27.12.
Polkadot Price Analysis
Polkadot (DOT) rebounded slightly from strong support at $5.15 on May 25 and 26, indicating a lack of aggressive buying by the bulls. The bears will try to take advantage of this opportunity and use it to their advantage.
DOT/USDT daily chart. Source: TradingView
If the price breaks below $5.15, the DOT/USDT pair may pick up momentum and drop to the next major support at $4.22.
If the bulls want to arrest the decline, they will have to push the price above the 20-day EMA ($5.40) quickly. If they manage to do so, it would suggest buyers are attempting to form higher lows at $5.15.
The pair may first rise to the 50-day SMA ($5.82) before heading towards the downtrend line. A break above this level will indicate that the corrective phase may be over.
Litecoin Price Analysis
Litecoin (LTC) has fluctuated between $96 and $75 for the past few days. Price action within this range can be random and volatile.
LTC/USDT daily chart. Source: TradingView
The bulls started to recover on May 25, having touched the moving averages. If the price turns down from current levels, the next stop could be the ascending trendline. If the price turns back from the ascending trendline, it will indicate that the LTC/USDT pair is attempting to form a symmetrical triangle pattern.
If the price breaks above the moving averages, it would indicate that short-term sentiment is improving. The pair may then attempt a rally towards $96, where the bears may encounter strong resistance again.
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