Turmoil in China, concerns over the global economy and BlockFi’s filing for bankruptcy are putting pressure on Bitcoin, DOGE and other cryptocurrencies this week. Crypto analyst Rakesh Upadhyay assesses how market developments are affecting the technical outlook.
An overview of the cryptocurrency market
As you follow on Kriptokoin.com, China has witnessed an increase in Covid-19 cases. This has resulted in strict lockdown restrictions in various parts of the country. This triggered widespread protests in China and likely drove global stock markets lower.
Adding to the turmoil in China, cryptocurrency markets, already in the grip of a bear market, are reeling under the pressure of BlockFi and its subsidiaries’ Chapter 11 bankruptcy filing. Bitcoin is heading towards its worst November performance since 2018, down 21% in November.
Daily cryptocurrency market performance / Source: Coin360The sharp drop in Bitcoin’s price has greatly reduced the number of wallets holding more than $1 million in Bitcoin. On November 8, 2021, there were 112,898 millionaire wallets. However, Glassnode data shows that as of November 25, only 23,245 wallets have Bitcoin balances of $1 million or more. Now it’s time for analysis…
BTC, ETH, BNB and XRP analysis
Bitcoin (BTC)
Bitcoin’s relief rally failed to even reach the 20-day EMA of $16,972. This shows that traders are hesitant to buy at higher levels. Sellers will now try to push the price down to the critical support at $15.476.
BTC is forming a descending triangle pattern that will complete on a break and close below $15,476. This downside setup has a target target of $13,330. The downward sloping moving averages point to an advantage for the bears. However, the bullish divergence on the RSI indicates that the bearish momentum is likely to weaken. The negative setup is invalidated if the price rises and breaks above the downtrend line. It is possible that this could open the doors for a possible rally to the overhead resistance of $17,622. Buyers will have to push the price above this level to signal the end of the downtrend.
Ethereum (ETH)
ETH reached the 20-day EMA of $1,233 on November 26. However, the bulls failed to push the price above that. This shows that the bears continue to fiercely defend the 20-day EMA.
Sellers are likely to try to pull the price towards the support line of the descending channel pattern, which is close to the psychologically critical level of $1,000. Buyers will probably defend this level with all their might. However, they will need to break through the overall hurdle at the 20-day EMA to start a sustainable recovery. It is possible for ETH to rise to the 50-day SMA of $1,337 and then the resistance line. On the downside, a break and close below the channel is likely to boost selling. Thus, it is possible to pull ETH to the June low of $881.”
Binance Coin (BNB)
BNB’s recovery fell from $318 on November 26. Thus, it dropped below the $300 breakout level on Nov. 28.
The bears will try to consolidate their positions by pulling the price below the moving averages. If they are successful, it will indicate that a break above $300 will likely be a bull trap. BNB is likely to drop to $275 and then $258 later. If the price moves higher from the moving averages, it indicates that lower levels are attracting buyers. It is possible for BNB to rally again to $318 later. If the bulls push the price above this resistance, BNB could rise to $338.
Ripple (XRP)
XRP broke above the overhead resistance of $0.41 on Nov. 25. However, the bulls failed to hold higher as seen from the long wick on the day’s candlestick.
It is possible that this attracted bears selling, which pushed the price below the 20-day EMA of $0.39 on Nov. 28. Thus, the price went down from the symmetrical triangle to the breakout level. This is an important level to follow. Because a break below this will likely indicate that XRP will extend its stay in the $0.30 to $0.41 range for a few more days. The flattening 20-day EMA and RSI near 45 suggest that the bullish momentum is weakening in the near term. Buyers will have to push and sustain the price above $0.41 to signal the start of a fresh upward move.
ADA, DOGE, MATIC and DOT analysis
Cardano (ADA)
ADA’s relief rally failed to even reach the 20-day EMA of $0.33. This indicates a lack of demand at higher levels.
Bears will try to improve their advantage. It will also continue the downtrend by pulling ADA below the support near $0.30. If they do, it is possible for ADA to fall to the support line, where buyers can step in and stop the decline. This downside view is likely to be invalidated in the near term if the price breaks out of the support near $0.30 and spikes above the 20-day EMA. ADA may then attempt a rally to the downtrend line. It also indicates that the bears may be losing their grip.
Dogecoin (DOGE)
DOGE broke above the psychological level of $0.10 on Nov. 27. However, the bulls failed to sustain higher levels. Taking profits pushed DOGE price back into range on Nov. 28.
The 20-day EMA of $0.09 is gradually rising. Also, the RSI is in the positive territory. This shows that DOGE receivers have a slight advantage. If the price rises from the 20-day EMA, the bulls will attempt to continue the upward move by pushing the DOGE above $0.11. If DOGE succeeds, the rally is possible to reach the 61.8% Fibonacci retracement level of $0.12. On the contrary, if DOGE price turns down and breaks below the moving averages, a break above the range will suggest a bull trap. DOGE could then decline to the $0.07 support.
Polygon (MATIC)
Buyers are struggling to push MATIC above the $0.88 20-day EMA. This shows that the bears see the relief rallies as a selling opportunity.
It is possible for MATIC to fall back to the uptrend line. This level served as a strong support in the previous four situations. Therefore, the bulls will try to aggressively defend it again. If the price bounces off the uptrend line, MATIC is likely to rise to the 50-day SMA at $0.90. A break above this level will indicate that the bulls are making a comeback. It is possible for MATIC to rally to $0.97 later. Conversely, if the price breaks below the uptrend line, MATIC is likely to drop to the key support at $0.69.
Polkadot (DOT)
DOT is in a strong downtrend. Attempts by the bulls to start a recovery failed at $5.53 on November 24. This shows that the mood remains negative and traders are selling in the rallies.
The bears pulled the price near the critical support at $5. This is an important level for the bulls to defend. Because if they fail to do so, DOT is likely to continue its downtrend. It is possible for the DOT to drop to $4.06 later. Alternatively, if the price rises from the current level or $5, it indicates lower demand. Buyers will again try to push the price above the 20-day EMA of $5.57 and extend the relief rally. The DOT is likely to rally to $6.50 later.
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