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Bitcoin and several altcoins took a beating on reports that the SEC filed a suit against Binance in U.S. district court.
Bitcoin and altcoins witnessed a sharp sell-off on the news that the United States Securities and Exchange Commission (SEC) filed a suit against Binance in U.S. district court for unregistered securities operations.
This lawsuit could delay the recovery in Bitcoin (BTC) and most major altcoins, as traders could prefer to remain on the sidelines for a few days until some clarity emerges. Another upcoming event that could keep the investors at bay is the Federal Reserve’s meeting on June 14.
Daily cryptocurrency market performance. Source: Coin360
Although the short-term picture is uncertain, Glassnode data shows that the largest cohort of Bitcoin whales, owning at least 10,000 Bitcoin, has been on an accumulation spree for the past few days. On the other hand, all the other major cohorts have been in a distribution phase.
What are the important support levels that could start a recovery in Bitcoin and the major altcoins? Let’s study the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index (SPX) broke and closed above the overhead resistance of 4,200 on May 26, completing the bullish ascending triangle pattern.
SPX daily chart. Source: TradingView
The bears tried to trap the aggressive bulls on May 30 and May 31, but the bulls aggressively purchased the dip to the 20-day exponential moving average (EMA) at 4,183. The up move resumed on June 1, and the bulls built upon it on June 2.
There is minor resistance at 4,325, where the bears will try to stall the rally. On the way down, if bulls do not allow the price to slide below 4,200, it will enhance the prospects of an up move to the 4,500 to 4,600 zone.
Contrary to this assumption, if the price turns down and breaks below the 50-day simple moving average (SMA) at 4,128, it will suggest that the recent breakout may have been a bull trap. The index may then dive to the uptrend line.
U.S. Dollar Index price analysis
The U.S. Dollar Index (DXY) rebounded off the 20-day EMA (103) on June 2, indicating that the sentiment has turned positive and bulls are buying the dips.
DXY daily chart. Source: TradingView
The bulls will try to push the price above the immediate resistance at 104.70. If they succeed, the index could reach the overhead level of 106. This is an important level to watch for because a break above it could start a new up move.
If the price turns down from 106 and breaks below the 20-day EMA, it will suggest that the index may extend its stay inside the range for a few more days. The bears will have to pull the price below 100.82 to complete the bearish head-and-shoulders pattern.
Bitcoin price analysis
Bitcoin has been trading inside the descending channel pattern for the past several days. The bulls pushed Bitcoin above the 20-day EMA ($27,083) on June 4, but the long wick on the candlestick shows that the bears sold the rally.
BTC/USDT daily chart. Source: TradingView
The price turned down on June 5 and plummeted below the immediate support at $26,500. The selling picked up momentum, and the BTC/USDT pair dropped into the crucial support zone between $25,800 and $25,250.
Buyers are expected to guard this zone with all their might because a break below it may result in long liquidation. The pair could then descend toward $20,000.
The first of strength will be a break and close above the descending channel. That could indicate the end of the corrective phase. The pair may then soar to $31,000.
Ether price analysis
Ether (ETH) broke above the falling wedge pattern on May 28 and successfully held the retest on June 1, but the bulls failed to start a new up move.
ETH/USDT daily chart. Source: TradingView
This gave an opportunity to the bears to make a comeback. Sellers tugged the price below the moving averages on June 5, which accelerated the selling. The ETH/USDT pair tumbled below the resistance line of the wedge pattern. If this level fails to hold, the next stop could be $1,740 and then the support line.
This negative view will invalidate in the near term if the price turns up and breaks above $1,928. The pair could then surge to $2,000 and eventually to $2,200, where the bears may again mount a strong defense.
BNB price analysis
BNB’s (BNB) narrow range trading resolved to the downside on June 5. The sharp selling pulled the price below $300 and the next support at $280.
BNB/USDT daily chart. Source: TradingView
The BNB/USDT pair could drop to $265, which is an important level to keep an eye on. If the price turns up from $265 and rises above $280, it will indicate strong buying at lower levels. The pair may then rise to the 20-day EMA ($306), where the bulls are likely to encounter aggressive selling by the bears.
On the downside, a break and close below the $265 support could start a new downtrend. The pair may plunge to $240 and then to $220.
XRP price analysis
XRP (XRP) has been oscillating inside a large range between $0.56 and $0.30 for the past several months. Generally, in such a well-defined range, traders buy at the support and sell close to the overhead resistance.
XRP/USDT daily chart. Source: TradingView
The XRP/USDT pair turned down from the overhead resistance on June 4, indicating profit-booking by the bulls and short positions by the aggressive bears.
If the price turns up from the 20-day EMA ($0.49), it will suggest that the sentiment has turned positive and traders are buying on dips. The bulls will then make one more attempt to clear the overhead hurdle.
Alternatively, if the price dips below the moving averages, it will suggest that the pair may remain stuck inside the range for a while longer.
Cardano price analysis
The long wick on Cardano’s (ADA) June 4 candlestick shows that the bears successfully halted the relief rally at the 50-day SMA ($0.38).
ADA/USDT daily chart. Source: TradingView
The ADA/USDT pair turned down sharply on June 5 and plummeted below the uptrend line of the ascending channel pattern. This move invalidated the bullish setup, and the pair may next descend toward the critical support at $0.30.
If bulls want to prevent the downward move, they will have to quickly push the price back into the channel. Such a move will suggest that the pair has rejected the lower levels. The upside momentum could pick up on a break above $0.39.
Dogecoin price analysis
The bulls repeatedly failed to push Dogecoin (DOGE) above the 20-day EMA ($0.07) in the past few days, indicating that the bears are fiercely guarding the level.
DOGE/USDT daily chart. Source: TradingView
The selling picked up momentum on June 5, and the bears yanked the price below the immediate support at $0.07. That may have hit the stops of several traders, opening the gates for a further fall to $0.06. This level may attract strong buying by the bulls.
On the upside, the $0.07 level may now act as a strong resistance during relief rallies. The bulls will have to propel and sustain the price above the breakdown level of $0.07 to signal the start of a potential recovery.
Solana price analysis
Solana (SOL) broke above the 50-day SMA ($21.54) on June 4, but the bulls could not sustain the positive momentum. This indicates that demand dries up at higher levels.
SOL/USDT daily chart. Source: TradingView
The bears sensed an opportunity and pulled the price below the moving averages. That may have trapped the aggressive bulls, resulting in a sharp drop to the strong support at $18.70. This is an important level to keep an eye on because a break and close below it will open the doors for a potential drop to $15.28.
If the SOL/USDT pair rebounds off $18.70, the bulls will again try to clear the overhead hurdle at the moving averages. A break and close above $22.30 may tilt the advantage in favor of the bears.
Polygon price analysis
The bulls have been trying to push Polygon (MATIC) above the 20-day EMA ($0.89) for the past few days, but the bears held their ground.
MATIC/USDT daily chart. Source: TradingView
The selling intensified on June 5, and the bears pulled the price to the vital support at $0.82. Buyers are expected to defend this level aggressively. A strong bounce off this support will suggest that the pair may remain stuck between $0.82 and $0.94 for some more time.
Contrarily, if the support at $0.82 crumbles, the MATIC/USDT pair could start a decline toward the next major support at $0.69. The bulls will have to push and sustain the price above the moving averages to signal the start of a sustained recovery.
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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.