Bitcoin started March on a positive note, but historically the month has recorded mediocre gains, which could be an early warning sign for crypto investors.
Bitcoin (BTC) was marginally positive in February even though the S&P 500 index (SPX) fell by 2.61%. On the first day of March, Bitcoin has started on a positive note while the United States equities markets are struggling. This shows that Bitcoin is trying to decouple from the U.S. equities markets.
A positive sign is that retail traders seem to have made the most of the crypto bear market. Instead of panicking and selling their holdings, traders have purchased at lower levels. Glassnode data shows that wallets holding at least one Bitcoin have consistently risen and are nearing the 1 million mark for the first time ever.
Historically, March has been a mediocre month for Bitcoin. Coinglass data shows that Bitcoin closed the month of March with double digit gains only twice in the past ten years, in 2013 and in 2021. Therefore, the possibility of continued consolidation in March remains high.
What are the critical levels that may act as major roadblocks for the recovery in Bitcoin and altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin’s $22,800 level has been acting as a solid support in the past few days, which is a positive sign. This indicates that the sentiment remains bullish and traders are viewing the dips as a buying opportunity.
The bulls have cleared the first hurdle at the 20-day exponential moving average ($23,435) and will next try to push the price toward the crucial resistance at $25,250. This is an important level for the bears to defend because a break and close above it may attract huge buying. The pair could then skyrocket to $31,000 as there are no major resistances in between.
On the contrary, if the price turns down from $25,250, it will suggest that the pair may remain range-bound for a few days. A consolidation near the local highs is a bullish sign as it shows that buyers are not rushing to the exit. The bears will have to sink and sustain the price below $22,800 to dent the bullish sentiment. That may start a correction toward $20,000.
Even after repeated attempts, the bears have failed to sink Ether (ETH) below the 50-day SMA ($1,600). This indicates that the bulls are buying the dips to the 50-day SMA.
Buyers will try to strengthen their position by catapulting the price above the overhead resistance zone between $1,680 and $1,743. If they did that, the ETH/USDT pair may start a rally to $2,000. The bears may pose a strong challenge at $1,800 but this level is likely to be crossed.
The first sign of weakness will be a break and close below the 50-day SMA. If that happens, the short-term bulls may be tempted to book profits. The pair could then drop to the support near $1,500.
The price action of the past few days has formed a symmetrical triangle pattern in BNB (BNB). This indicates indecision among the buyers and sellers.
The bulls purchased the dip to the support line on March 1 but the long wick on the day’s candlestick shows that bears are fiercely guarding the moving averages. If the price breaks below the triangle, the BNB/USDT pair may slump to $280.
On the contrary, if buyers push the price above the moving averages, the pair may reach the resistance line of the triangle. This remains the key level to watch out for in the near term because a break above it may start an up-move to $340 and thereafter to the pattern target of $371.
Even after repeated attempts, the bears could not pull XRP (XRP) to the strong support at $0.36. This suggests that the selling pressure is reducing.
The bulls will now try to drive the price above the resistance line of the descending channel. If they succeed, the XRP/USDT pair may rise to the overhead resistance at $0.43. Buyers will have to pierce this resistance to clear the path for a possible rally to $0.52.
The bears are likely to have other plans. They will again try to stall the recovery at the resistance line of the channel. If the price turns down from it, the possibility of a break below $0.36 increases. The pair may then slide to $0.33.
Cardano (ADA) is attempting a bounce off the strong support near $0.34. The recovery could face resistance at the 20-day EMA ($0.37) as the bears will try to switch this level into resistance.
If the price turns down from the 20-day EMA, the bears will try to tug the ADA/USDT pair below the $0.34 support. If they do that, the pair may start a deeper correction to $0.32 and then to $0.30.
Instead, if bulls thrust the price above the moving averages, it will suggest aggressive buying at lower levels. The pair may then attempt a rally to the neckline of the developing inverse head and shoulders (H&S) pattern.
The bulls successfully defended the support near $0.08 for the past few days but they have failed to achieve a strong rebound in Dogecoin (DOGE). This suggests that demand dries up at higher levels.
The price action of the past few days has formed a bearish descending triangle pattern, which will complete on a break and close below the support near $0.08. This negative setup has a target objective at $0.06.
Conversely, if buyers drive the price above the moving averages, it will invalidate the bearish setup. That may result in short covering by the aggressive bears. The DOGE/USDT pair may then attempt a rally to $0.10.
The sharp correction in Polygon (MATIC) is finding support at the 50-day SMA ($1.17). The bulls are trying to start a recovery but the long wick on the day’s candlestick shows that the bears are selling the rallies to the 20-day EMA ($1.28).
If the price continues lower, the bears will make one more attempt to yank the MATIC/USDT pair below the 50-day SMA. If they manage to do that, the pair could tumble to the vital support at $1.05. This level is likely to attract solid buying by the bulls.
Contrarily, a break above $1.30 could embolden the bulls. They will then try to push the price toward the overhead resistance at $1.57. The rally could also face roadblocks at $1.42 and again at $1.50.
Related: Ethereum price resistance at $1,750 could reflect traders’ anxiety over the Shanghai upgrade
Solana (SOL) turned down from the 20-day EMA ($23.02) on Feb. 27, indicating that bears are trying to turn this level into a resistance.
However, the bulls have not given up and are again trying to push the price above the 20-day EMA. The repeated retest of a resistance within a short period tends to weaken it. If buyers kick the price above the 20-day EMA, the SOL/USDT pair could reach the resistance line.
This remains the key level to watch out for in the near term because a break and close above it will signal a potential trend change. If bears want to gain the upper hand, they will have to sink the pair below the support at $19.68.
Polkadot (DOT) broke below the 50-day SMA ($6.43) on Feb. 28 but the bears failed to build upon this advantage. This suggests that buyers are trying to trap the aggressive bears.
The 20-day EMA ($6.68) is the important level to keep an eye on in the near term. If buyers thrust the price above this level, it will suggest that the short-term corrective phase may be over. The bulls will then try to propel the price toward the neckline of the developing inverse H&S pattern.
Alternatively, if the DOT/USDT pair once again turns down from the 20-day EMA, it will suggest that bears have flipped the level into resistance. That will increase the likelihood of a drop to $5.50.
Litecoin’s (LTC) pullback found strong support at the 50-day SMA ($92). This suggests that lower levels continue to attract buyers.
The bulls pushed the price back above the 20-day EMA ($95) on March 1, opening the gates for a possible rally to the overhead resistance at $106. This level may act as a solid barrier but if bulls overcome it, the LTC/USDT pair may rise to $115 and thereafter to $130.
The important support to watch on the downside is the area between the 50-day SMA and $88. If this zone cracks, the selling could pick up momentum and the pair may slide to $81 and then to $75.
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