Risky assets have been on a roll in the first quarter of 2024. The S&P 500 Index (SPX) rose 10.2% to record its best first-quarter performance since 2019, while Bitcoin (BTC) rallied nearly 69%. Will the rally continue into the second quarter, or is it time for profit booking?
Investors remain upbeat on Bitcoin’s prospects for the second quarter. Expectations of a pick up in institutional demand for spot Bitcoin exchange-traded funds and Bitcoin’s halving is helping maintain the bullish sentiment.
Traders need to be careful after the strong Q1 performance because nothing goes up in a straight line. Bull markets are known for their sharp corrections, which shake out the late entrants. However, the dips offer a low-risk buying opportunity to the long-term investors.
What are the important support levels to watch out for in Bitcoin and altcoins? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index bounced off the support of the ascending channel pattern and made a new all-time high on March 28, indicating that the uptrend remains intact.
While the upsloping moving averages indicate that the bulls are in control, the negative divergence on the relative strength index (RSI) cautions of a possible correction or consolidation in the short term.
The first sign of weakness on the downside will be a break and close below the 20-day exponential moving average (5,176). If that happens, the stops of several traders may get hit, and the index could plummet to the 50-day simple moving average (5,055).
Buyers will have to kick the price above the channel if they want to maintain control. That could start an up move toward 5,450.
U.S. dollar Index price analysis
The U.S. dollar Index (DXY) has been gradually moving higher and has reached the crucial overhead resistance of 105.
The upsloping moving averages and the RSI near the overbought territory show that the bulls have the upper hand. If buyers overcome the obstacle at 105, the index could start an up move to 106 and eventually to 107.
On the contrary, if the price turns down from 105, the index could slip to the 20-day EMA (104). If the price rebounds off the 20-day EMA, the possibility of a rise above 105 increases, but if the index breaks below the moving averages, it will open the doors for a possible fall to 102.50.
Bitcoin price analysis
The bulls are finding it difficult to push Bitcoin above $71,770, and today's correction proves that bears are not ready to let go.
The tight-range trading is likely to break out soon, but it is difficult to predict the direction of the breakout with certainty. If the price slumps below the 20-day EMA, the short-term traders may book profits, pulling the BTC/USDT pair to the 50-day SMA ($62,430).
On the other hand, if the price turns up and breaks above the $71,770 to $73,777 zone, it will signal the start of the next leg of the uptrend. The pair could then resume its march toward $80,000.
Ether price analysis
Ether (ETH) has been struggling to rise and maintain above the immediate resistance at $3,679, indicating that the bears are trying to gain the upper hand.
The bears will try to take advantage of the situation and sink the price below the 50-day SMA ($3,386). If they do that, the selling is likely to pick up, and the ETH/USDT pair could skid to $3,250 and subsequently to the critical support at $3,056.
If bears want to prevent the decline, they will have to propel the price above $3,679. That could open the doors for a possible retest of $4,000. This level may again act as a significant hurdle, but if the bulls prevail, the pair could reach $4,500.
BNB price analysis
BNB (BNB) turned down from $620 on March 29 and fell to the 20-day EMA ($562) on April 1, suggesting profit booking by the short-term traders.
The 20-day EMA is an essential support to watch out for because a break and close below it could sink the BNB/USDT pair to $496. Buyers are expected to aggressively defend this level.
Contrary to this assumption, if the price rebounds off the 20-day EMA, it will indicate that the sentiment remains positive and traders are buying the dips. The bulls will then make another attempt to push the price to $645. A break above this level could catapult the price to $692.
Solana price analysis
Solana (SOL) once again turned down from the overhead resistance of $205 on April 1, indicating aggressive selling at the level.
The SOL/USDT pair could reach the 20-day EMA ($180), an essential support to watch. If the price rebounds off the 20-day EMA, it will suggest that the bulls continue to buy the dips. That will enhance the prospects of a break above $205. If that happens, the pair may resume the uptrend and rally toward $267.
Instead, if the price continues lower and plunges below the 20-day EMA, it will signal that the bulls are rushing to the exit. The pair may then drop to the 50-day SMA ($147).
XRP price analysis
XRP’s (XRP) price action of the past several days has formed a symmetrical triangle pattern, indicating indecision between the bulls and the bears.
The flattish 20-day EMA and the RSI just below the midpoint do not give a clear advantage either to the buyers or the sellers. The bulls will have to shove the price above the triangle to suggest the start of an up move to the formidable resistance at $0.74.
Alternatively, if the price continues lower and breaks below the triangle, it will indicate that the bears are trying to take charge. The selling could pick up below the uptrend line, and the XRP/USDT pair could dive to $0.52.
Related: Here’s what happened in crypto today
Dogecoin price analysis
The bulls are trying to flip Dogecoin’s (DOGE) $0.19 level into support but are struggling to push the price above $0.23.
The bears will try to exploit the situation and sink the DOGE/USDT pair below the 20-day EMA ($0.18). If they do that, the selling could pick up, and the pair may plunge to the next significant support at the 50-day SMA ($0.14).
On the contrary, if the price turns up and breaks above $0.23, it will suggest that the bulls are trying to resume the uptrend. The pair could then attempt a rally to $0.30, where they may again face resistance from the bears.
Cardano price analysis
Cardano’s (ADA) failure to rise above the $0.68 resistance in the past few days shows that the bears are active at higher levels.
The bears pulled the price below the immediate support at $0.63 and will try to extend the decline to the solid support at $57. If the price rebounds off $0.57, it will suggest that the ADA/USDT pair may remain range-bound between $0.57 and $0.68 for a while.
The pair will complete a bearish head-and-shoulders pattern if the price plummets below the critical support at $0.57. That may signal the start of a deeper correction to $0.46. The bulls will have to kick the price above $0.68 to be back in the driver’s seat.
Avalanche price analysis
The bulls managed to keep Avalanche (AVAX) above the 20-day EMA ($53) in the past few days but failed to start a strong rebound. This suggests a lack of aggressive buying by the bulls.
The selling picked up on April 1, and the bears pulled the AVAX/USDT pair to the $50 support. This is a crucial level to watch out for because a break below it could accelerate selling and pull the pair to $42.
This negative view will be invalidated in the near term if the price turns up and breaks above the downtrend line. The pair could rise to $60 and thereafter attempt a rally to the overhead resistance at $65.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
