Bitcoin (BTC) and altcoins witnessed a sharp sell-off following news that the United States Securities and Exchange Commission (SEC) had filed a lawsuit against Binance in US courts for unregistered securities trading.
This demand could set back the recovery of Bitcoin and most major altcoins, as traders might prefer to stay on the sidelines for a few days until some clarity emerges. Another upcoming event that could keep investors at bay is the Federal Reserve meeting on June 14.
Although the near-term picture is uncertain, data from Glassnode shows that the largest cohort of Bitcoin whales, owning at least 10,000 Bitcoin, have been in an accumulation stage for the past few days. On the other hand, all other large cohorts have been in a distribution phase.
What are the important support levels that could start a rally in Bitcoin and major altcoins? Let’s study the graphs to find out.
S&P 500 Index Price Analysis
The S&P 500 Index (SPX) broke out and closed above the 4200 overhead resistance on May 26, completing the bullish ascending triangle pattern.
The bears tried to catch the aggressive bulls on May 30-31, but the bulls aggressively bought the dip to the 20-day exponential moving average (4.183). The up move resumed on June 1 and the bulls built on it on June 2.
There is minor resistance at 4.325 where the bears will try to stop the rally. On the way down, if the bulls do not allow the price to fall below 4,200, it will improve the prospects for an up move to the 4,500-4,600 zone.
Contrary to this assumption, if the price turns down and breaks below the 50-day SMA (4.128), it will suggest that the recent break may have been a bull trap. The index may then dip to the uptrend line.
US Dollar Index Price Analysis
The US Dollar Index (DXY) has rallied from the 20-day EMA (103) on June 2, indicating that sentiment has turned positive and bulls are buying dips.
The bulls will try to push the price above the immediate resistance at 104.70. If they succeed, the index could reach towards the 106 level overall. This is an important level to watch because a break above could start a new move higher.
If the price turns down from 106 and breaks below the 20 day EMA, it will suggest that the index can extend its range stay for a few more days. The bears will have to pull the price below 100.82 to complete the bearish head and shoulders pattern.
Bitcoin Price Analysis
Bitcoin has been trading within the descending channel pattern for the past few days. The bulls pushed Bitcoin above the 20-day EMA ($27,083) on June 4, but the long wick of the candle shows that the bears sold the rally.
The price turned lower on June 5 and crashed below the immediate support at $26,500. The selling gained momentum and the BTC/USDT pair fell to the crucial support zone between $25,800 and $25,250.
Buyers are expected to protect this area with all their might because a break below it can result in a long selloff. The pair could then drop towards $20,000.
The first force will be a break and close above the descending channel. That could signal the end of the corrective phase. The pair can then skyrocket to $31,000.
Ether Price Analysis
ether(ETH) broke out of the falling wedge pattern on May 28 and successfully retested on June 1, but the bulls failed to initiate a new upward move.
This gave bassists a chance to come back. Sellers pulled the price below the moving averages on June 5, which accelerated the selling. The ETH/USDT pair fell below the resistance line of the wedge pattern. If this level fails to hold, the next stop could be $1,740 and then the support line.
This negative view will be invalidated in the short term if the price rises above $1,928. The pair could then rally to $2,000 and eventually $2,200 where the bears can mount a strong defense again.
BNB Price Analysis
BNB narrow range trading (BNB) was resolved downward on June 5. The strong selling took the price below $300 and the next support at $280.
The BNB/USDT pair could drop to $265, which is an important level to watch. If the price rises from $265 and rises above $280, it will indicate strong buying at the lower levels. The pair can then rally to the 20-day EMA ($306), where the bulls are likely to find aggressive selling by the bears.
On the downside, a break and close below the $265 support could start a new downtrend. The pair can drop to $240 and then $220.
XRP Price Analysis
XRP (XRP) has been oscillating within a wide range between $0.56 and $0.30 for the past few months. Typically, in such a well-defined range, traders buy at support and sell near upper resistance.
The XRP/USDT pair turned down above resistance on June 4, indicating profit booking by bulls and short positions by aggressive bears.
If the price turns higher from the 20-day EMA ($0.49), it will suggest that sentiment has turned positive and traders are buying on dips. Then the bulls will make one more attempt to clear the upper hurdle.
Alternatively, if the price falls below the moving averages, it will suggest that the pair may remain range bound for a while longer.
Cardano Price Analysis
The long wick of the Cardano June 4 candle (ADA) shows that the bears successfully stopped the relief rally at the 50-day SMA ($0.38).
The ADA/USDT pair turned down sharply on June 5, breaking below the uptrend line of the rising channel pattern. This move invalidated the bullish setup and the pair may turn down towards the critical support at $0.30 next.
If the bulls want to prevent the move lower, they will have to quickly push the price back into the channel. Such a move will suggest that the pair has rejected the lower levels. Bullish momentum could pick up on a break above $0.39.
Dogecoin Price Analysis
The bulls repeatedly failed to push Dogecoin (DOGE) above the 20-day EMA ($0.07) over the past few days, indicating that the bears are fiercely protecting the level.
The selling gained momentum on June 5, and the bears pulled the price below the immediate support at $0.07. That may have affected a number of traders, opening the doors for a further drop to $0.06. This level may attract strong buying by the bulls.
To the upside, the $0.07 level can now act as strong resistance during relief rallies. The bulls will have to push and hold the price above the breakout level of $0.07 to signal the start of a potential rally.
Solana Price Analysis
sunny (SUN) broke above the 50-day SMA ($21.54) on June 4, but the bulls were unable to maintain the positive momentum. This indicates that demand is drying up at higher levels.
The bears sensed an opportunity and pulled the price below the moving averages. That may have trapped the aggressive bulls, resulting in a sharp drop to the strong support at $18.70. This is an important level to watch because a break and close below will open the doors for a potential drop to $15.28.
If the SOL/USDT pair bounces off $18.70, the bulls will try again to clear the upper hurdle at the moving averages. A break and close above $22.30 may tilt the advantage in favor of the bears.
Polygon Price Analysis
The bulls have been trying to push Polygon (MATIC) above the 20-day EMA ($0.89) over the past few days, but the bears held their ground.
The selling intensified on June 5 and the bears pushed the price to life support at $0.82. Buyers are expected to defend this level aggressively. A strong bounce off this support will suggest that the pair may remain stuck between $0.82 and $0.94 for longer.
Conversely, if the support at $0.82 breaks down, the MATIC/USDT pair could start a slide towards the next major support at $0.69. The bulls will have to push and hold the price above the moving averages to signal the start of a sustained rally.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should do their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.