Bitcoin has entered the oversold area of the market as its price struggles to break through the $28,000 resistance level. Buyers are beginning to get in the oversold area, causing a slight upward correction.
If BTC is rejected at the $28,000 high, significant selling pressure may push the largest cryptocurrency lower. On April 21, Bitcoin dropped to a low of $27,155. But it was still above the 50-day simple moving average (SMA).
If BTC falls below the 50-day SMA, it may enter a bearish trend until it reaches a low of $26,169. However, if the 50-day SMA holds, BTC may continue ranging between $27,000 and $28,000, potentially leading to a breakout or rebound.
In the first four months of 2023, Bitcoin has outperformed traditional assets with a 72 percent quarterly growth in market capitalization, according to CoinGecko. This marks a positive start to the year for the cryptocurrency ecosystem. BTC has surpassed assets like gold and the Nasdaq index, which had gains of 15.7 percent and 8.4 percent, respectively, during the same period.
The CoinGecko report also highlights improvements in other major asset groups, except for crude oil, which fell by 6.1 percent in Q1 this year, attributed to U.S. inflation data, the banking crisis and a decline in oil consumption.
Bitcoin correction continues as bears hold slight edge
As buyers attempt to halt Bitcoin’s correction at the 50-day SMA, the 20-day exponential moving average (EMA) at $28,606 is turning downwards. The relative strength index (RSI) is also in the negative zone. These indicators signal that bears have a slight edge in the market.
Traders are closely watching the support level at $25,250, as a breakdown below this level could lead to a sharp decline to $20,000. Buyers must push and sustain the price above the 20-day EMA to signal a potential reversal. If this happens, it could attract more buying interest and potentially drive the price to the $31,000 to $32,500 resistance zone.
In recent trading sessions, the BTC/USDT pair bounced off the $27,125 level and reached the 20-day EMA, the first hurdle that bulls need to overcome for a strong recovery. The next key level to watch is the 50-day SMA, where bears are expected to have a lot of selling pressure.
Other altcoins analysis
In the analysis of other altcoins, Binance Coin (BNB) is facing resistance above $338, with bulls defending the 50-day SMA at $316. A successful break above $338 could lead a rally to $346 and potentially $400, supported by the 20-day EMA at $325 and positive RSI.
For Cardano’s ADA, it has turned down below the neckline of an inverse head-and-shoulders pattern, indicating bearish pressure. However, buyers are defending the 50-day SMA at $0.37. The 20-day EMA at $0.40 is sloping down and RSI is below the midpoint, suggesting sellers’ control. A break below the 50-day SMA could take ADA to $0.30, while a break above the neckline could trigger buying toward $0.46.
Also with an inverse head-and-shoulders pattern, Monero (XMR) has seen a minor dip in price, but aggressive buying on dips has pushed it above the 20-day EMA on the daily chart. If XMR breaks above the neckline and reaches $185, it could complete a bullish setup with a target of $199. However, a break below $149 may indicate bears taking control and pushing the price lower.
Toncoin (TON) has formed a bearish descending triangle pattern, but there are signs of a potential bullish reversal. If the price breaks above the resistance line, it could result in an up-move to $2.64 and $2.90. However, a break below $2.20 would invalidate this view.