High-risk assets performed excellently in the first quarter of 2024. The S&P 500 index (SPX) rose 10.2%, recording its best first-quarter performance since 2019, while Bitcoin (BTC) saw an increase of almost 69% . Will the rally continue into the second quarter, or is it time to take profits?
Investors remain optimistic about Bitcoin’s prospects for the second quarter. Expectations of an increase in institutional demand for spot Bitcoin exchange-traded funds and the Bitcoin halving are helping to maintain bullish sentiment.
Traders need to be careful after the strong first quarter performance as nothing goes up in a straight line. Bull markets are known for their sharp corrections, which weed out late entrants. However, dips offer a low-risk buying opportunity for long-term investors.
What are the important support levels to watch for Bitcoin and altcoins? Let’s analyze the graphs to find out.
S&P 500 Index Price Analysis
The S&P 500 Index bounced from ascending channel pattern support and reached a new all-time high on March 28, indicating that the uptrend remains intact.
Although the rising moving averages indicate that bulls are in control, the negative divergence in the relative strength index (RSI) warns of a possible correction or consolidation in the near 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 this happens, multiple traders’ stops could be triggered and the index could fall to the 50-day simple moving average (5,055).
Buyers will have to push the price above the channel if they want to maintain control. This could start an upward move towards 5,450.
US Dollar Index Price Analysis
The US Dollar Index (DXY) has been gradually rising and has reached important resistance above 105.
The rising moving average and the RSI close to overbought territory show that the bulls have the upper hand. If buyers clear the hurdle at 105, the index could begin a rally to 106 and eventually 107.
On the other hand, if the price drops from 105, the index could fall back to the 20-day exponential moving average (104). If the price recovers from the 20-day moving average, it increases the possibility of a rally above 105, but if the index breaks below the moving averages, it opens the way for a possible drop to 102.50.
Bitcoin Price Analysis
Bulls are finding it difficult to take Bitcoin above $71,770, and today’s correction proves that bears are not ready to relent.
Trading in a narrow range will likely result in a breakout soon, but it is difficult to predict the direction of the breakout with certainty. If the price falls below the 20-day EMA, short-term traders can take profits, taking BTC/USDT to the 50-day SMA ($62,430).
On the other hand, if the price rises and breaks the zone between $71,770 and $73,777, it will signal the start of the next leg of the uptrend. The pair could then resume its march towards $80,000.
Ether price analysis
Ether (ETH) has struggled to rise and hold above the immediate resistance at $3,679, indicating that 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 achieve this, selling will likely increase, and the ETH/USDT pair could fall to $3,250 and subsequently critical support at $3,056.
If the bears want to avoid the drop, they will have to push the price above $3,679. This could open the door for a possible retest of $4,000. This level could once again act as a significant obstacle, but if the bulls prevail, the pair could reach $4,500.
BNB Price Analysis
BNB (BNB) retreated from $620 on March 29 and fell to the 20-day EMA ($562) on April 1, suggesting that short-term traders are taking profits.
The 20-day Exponential Moving Average is a key support to watch as a break and close below it could see BNB/USDT fall to $496. Buyers are expected to aggressively defend this level.
Contrary to this assumption, if the price recovers from the 20-day Exponential Moving Average, it will indicate that sentiment remains positive and traders are buying the dips. The bulls will then make another attempt to push the price towards $645. A break above this level could catapult the price towards $692.
Solana Price Analysis
Solana (SOL) once again pulled back from the $205 upper resistance on April 1, indicating aggressive selling at the level.
SOL/USDT price action could reach the 20-day Exponential Moving Average ($180), an important support to watch. If the price recovers from the 20-day Exponential Moving Average, it will suggest that bulls continue to buy the dips. This will increase the prospects of a break above $205. If this happens, the pair could resume the uptrend and shoot towards $267.
Instead, if the price continues to fall and dips below the 20-day Exponential Moving Average, it will signal that the bulls are rushing to exit. The pair may then fall to the 50-day Simple Moving Average ($147).
XRP Price Analysis
XRP (XRP) price action over the past few days has formed a symmetrical triangle pattern, indicating indecision between bulls and bears.
The practically flat 20-day Exponential Moving Average and the RSI slightly below the midpoint do not give a clear advantage to either buyers or sellers. Bulls will have to push the price above the triangle to suggest the start of a rally towards formidable resistance at $0.74.
Alternatively, if the price continues to fall and breaks below the triangle, it will indicate that the bears are trying to take control. Selling could increase below the uptrend line, and XRP/USDT could fall to $0.52.
Dogecoin Price Analysis
Bulls are trying to turn Dogecoin’s (DOGE) $0.19 level into support but are having difficulty pushing the price above $0.23.
The bears will try to take advantage of the situation and sink the DOGE/USDT pair below the 20-day Exponential Moving Average ($0.18). If they achieve this, the selling could increase, and the pair could plummet to the next significant support at the 50-day SMA ($0.14).
On the other hand, if the price recovers 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 it could face resistance from the bears once again.
Cardano Price Analysis
Cardano’s (ADA) failure to rise above the $0.68 resistance in recent days shows that bears are active at higher levels.
The bears have pulled the price below immediate support at $0.63 and will attempt to extend the decline to solid support at $0.57. If the price recovers from $0.57, it would suggest that ADA/USDT could remain within a range 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. This could signal the start of a deeper correction towards $0.46. Bulls will have to push the price above $0.68 to regain control.
Avalanche Price Analysis
Bulls managed to keep Avalanche (AVAX) above the 20-day EMA ($53) in recent days, but were unable to initiate a strong recovery. This suggests a lack of aggressive buying by bulls.
Selling increased on April 1, and bears pulled the AVAX/USDT pair towards support at $50. This is a crucial level to watch, as a break below it could accelerate selling and take the pair to $ 42.
This negative view will be invalidated in the short term if the price recovers and breaks the downtrend line. The pair could rise to $60 and then attempt a rally to resistance above at $65.
This article does not contain investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research when making a decision.
