Concerning news from Silvergate Bank and FTX may have influenced investors’ decision to press the sell button, but the potential for further downside could be limited.
Bitcoin (BTC) is leading the cryptocurrency markets lower and the matter is being exacerbated by Silvergate Banks' ongoing issues. This week the cryptocurrency-focused bank said that it needed additional time to file its annual 10-K report and warned that it may not be able to operate for another 12 months. Reacting to this news, several cryptocurrency companies announced that they were reducing or canceling their partnerships with Silvergate Bank.
The uncertainty regarding the future of the bank and its overall impact on the cryptocurrency sector may have caused a knee-jerk reaction. However, if the contagion does not spread, the downside may be limited.Daily cryptocurrency market performance. Source: Coin360
Another positive for the cryptocurrency markets is that the United States equities markets are attempting to start a recovery. This suggests that traders continue to add risk to their portfolios at lower levels. This risk-on sentiment may limit the downside in Bitcoin and select altcoins.
What are the important levels on the downside that may act as a support and start a recovery in Bitcoin and the major altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.
The failure to rise above the $24,000 level may have tempted traders to book profits. The selling accelerated on March 3 and the bears pulled the price below the immediate support at $22,800.BTC/USDT daily chart. Source: TradingView
The 20-day exponential moving average ($23,332) is still flat but the relative strength index (RSI) has plunged below 44, indicating that the short-term momentum has turned bearish. The next crucial support to watch on the downside is $21,480.
Buyers are expected to defend this level with all their might because a break and close below it could open the doors for a retest of the psychologically important level of $20,000.
Alternatively, if the price rebounds off $21,480, the bulls will try to clear the overhead hurdle at $22,800. If they do that, it will indicate that the BTC/USDT pair may remain stuck between $21,480 and $25,250 for a few more days.
Ether (ETH) once again turned down from the overhead resistance of $1,680 on March 2, indicating that bears are defending the level with vigor.ETH/USDT daily chart. Source: TradingView
The traders seem to have sold aggressively on March 3, which broke the support at the 50-day SMA ($1,607). The ETH/USDT pair may next drop to the critical support at $1,461 where the buyers may try to arrest the pullback.
If the price rebounds off $1,461 with strength, it will suggest that the pair may stay inside a range for a few days. The bulls will be back in the game if they push and sustain the price above $1,680. On the contrary, if the price slips below $1,461, the correction could deepen to $1,352.
The symmetrical triangle pattern in BNB (BNB) resolved to the downside on March 3, indicating that the bears overpowered the bulls.BNB/USDT daily chart. Source: TradingView
The BNB/USDT pair could plummet to the strong support at $280. This is an important level to keep an eye on because if it cracks, the pair will complete a bearish head and shoulders pattern. This negative setup has a target objective of $245.
If bears want to prevent the sharp decline, they will have to fiercely guard the $280 level. If the price rebounds off this level, the pair may oscillate between $280 and $318 for some more time. The pair could turn bullish above $338.
The bulls pushed XRP (XRP) to the 20-day EMA ($0.38) on March 1 but could not clear the overhead barrier. This suggests that the sentiment remains negative and traders are selling on rallies.XRP/USDT daily chart. Source: TradingView
The bears turned the price down on March 2 and increased the selling pressure on March 3. This pulled the price below the strong support at $0.36. If the price sustains below this level, the decline may extend to the support line of the descending channel pattern.
If bulls want to gain the upper hand in the near term, they will have to push the price back above the resistance line of the channel. If they do that, the XRP/USDT pair may start an upward march to $0.43.
Cardano (ADA) tried to rebound off $0.34 on March 1 but the bears sold at higher levels and yanked the price below the support on March 3.ADA/USDT daily chart. Source: TradingView
The long tail on the day’s candlestick shows that the bulls are trying to project the support at $0.32. Buyers will have to propel the price back above $0.34 if they want to strengthen their position. The ADA/USDT pair could then rise to the 20-day EMA ($0.37) where the bulls may face stiff resistance from the bears.
If the price turns down from the overhead resistance and dives below $0.32, it will suggest that bears have taken control. The pair could then start the next leg of the slide to $0.27.
Dogecoin (DOGE) plunged below the $0.08 support on March 3, which completed the bearish descending triangle pattern.DOGE/USDT daily chart. Source: TradingView
The DOGE/USDT pair could first drop to the support near $0.07. Buyers are expected to guard this level aggressively. If the price turns up from this level, the rebound could reach $0.08. This is where the bulls and the bears are likely to have a tough battle for supremacy.
If the price turns down from $0.08, it will suggest that bears have flipped the level into resistance. That may increase the possibility of a drop to the pattern target of $0.06. On the other hand, if buyers thrust the price above $0.08, the pair may rally to $0.10.
Polygon (MATIC) jumped from the 50-day SMA ($1.18) on March 1 but the bulls could not clear the overhead hurdle at the 20-day EMA ($1.27).MATIC/USDT daily chart. Source: TradingView
The selling picked up momentum on March 3 and the bears sent the price tumbling below the 50-day SMA. If the price sustains below the 50-day SMA, the MATIC/USDT pair could slide to the strong support at $1.05.
Another possibility is that the price recovers ground and closes above the 50-day SMA. If that happens, it will signal solid buying at lower levels. The bulls will then again try to overcome the barrier at $1.30 and gain the upper hand.
Related: Bitcoin price settles at $22.4K as daily RSI retraces 2023 bull run
The bulls once again failed to push Solana (SOL) above the 20-day EMA ($22.77) on March 1. That attracted further selling and pulled the price near $19.68.SOL/USDT daily chart. Source: TradingView
The 20-day EMA has started to turn down and the RSI has slipped near 43, indicating that bears have a slight edge. The SOL/USDT pair could reach the important support at $19.68, which may attract solid buying by the bulls.
If the price rebounds off $19.68 with strength, the bulls will again try to push the pair above the 20-day EMA and challenge the resistance line. Conversely, if the $19.68 support cracks, the pair may witness aggressive selling which could sink the price to $15.
The bulls pushed Polkadot (DOT) back above the 50-day SMA ($6.47) on March 1 but they could not surmount the 20-day EMA ($6.60). This indicates that bears are selling on minor rallies.DOT/USDT daily chart. Source: TradingView
The price turned down on March 2 and once again broke below the 50-day SMA. That may have caught the aggressive bulls off guard. The selling picked up momentum on March 3 and the bears are trying to sink the DOT/USDT pair to the strong support at $5.50. The bulls are expected to fiercely defend this level.
The 20-day EMA remains the key resistance to watch out for on the upside. A break above it will be the first indication that the selling pressure may be reducing.
Litecoin (LTC) bounced off the 50-day SMA ($93) on Feb. 28 and soared above the 20-day EMA ($94) on March 1. However, the bulls could not sustain the higher levels.LTC/USDT daily chart. Source: TradingView
The price turned down from $98 on March 2 and broke below the moving averages on March 3. This may have triggered stops of several short-term buyers, pulling the LTC/USDT pair down toward the first support near $85. If this level fails to hold, the pair may dive to $81 and thereafter to $75.
The important resistance levels to watch on the upside are the moving averages and then $98. Buyers will have to demolish both these barriers if they want to signal a comeback.
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