Risky assets have had a remarkable performance in the first quarter of 2024. The S&P 500 Index (SPX) achieved its best first-quarter performance since 2019, rising 10.2%. Likewise, Bitcoin (BTC) rallied nearly 69%. The question now is whether the rally will continue into the second quarter or if it’s time for investors to book profits.
Investors remain optimistic about Bitcoin’s prospects for the second quarter. The expectation of increased institutional demand for spot Bitcoin exchange-traded funds and the upcoming Bitcoin halving contribute to the positive sentiment.
However, traders must exercise caution after the strong performance in the first quarter. Bull markets are known for their sharp corrections, which can shake out late entrants. Nevertheless, these dips can also present low-risk buying opportunities for long-term investors.
To determine the important support levels to watch for in Bitcoin and altcoins, let’s take a closer look at the charts.
S&P 500 Index:
The S&P 500 Index rebounded from the support of the ascending channel pattern and reached a new all-time high on March 28, indicating that the uptrend remains intact. While the upsloping moving averages suggest that the bulls are in control, the negative divergence on the relative strength index (RSI) suggests a possible correction or consolidation in the short term. The first sign of weakness would be a break and close below the 20-day exponential moving average (5,176), potentially leading to a decline to the 50-day simple moving average (5,055). Buyers will need to push the price above the channel to maintain control and potentially start an upward move towards 5,450.
U.S. Dollar Index:
The U.S. Dollar Index (DXY) has been gradually rising and has reached a crucial overhead resistance level at 105. The upsloping moving averages and the RSI near the overbought territory indicate that the bulls have the upper hand. If buyers overcome the obstacle at 105, the index could rise to 106 and eventually 107. On the other hand, if the price turns down from 105, it could fall to the 20-day EMA (104). Rebounding off the 20-day EMA would increase the likelihood of a rise above 105, while breaking below the moving averages could lead to a possible decline to 102.50.
Bitcoin:
Bitcoin is struggling to break above $71,770, and the recent correction suggests that bears are not ready to give up. A breakout of the tight-range trading is imminent, but the direction of the breakout remains uncertain. If the price falls below the 20-day EMA, short-term traders may book profits, causing the BTC/USDT pair to drop 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 would signal the start of the next leg of the uptrend, with the pair potentially reaching $80,000.
Ether:
Ether has been struggling to rise and maintain above the immediate resistance at $3,679, indicating bearish pressure. Bears may try to sink the price below the 50-day SMA ($3,386), leading to increased selling and a potential drop to $3,250 and $3,056. To prevent this decline, bulls will need to push the price above $3,679, potentially opening the doors for a retest of $4,000. However, this level may act as a significant hurdle, and only if the bulls prevail can the pair reach $4,500.
BNB:
BNB turned down from $620 on March 29 and fell to the 20-day EMA ($562) on April 1, indicating profit booking by short-term traders. The 20-day EMA is a crucial support level to watch, as a break below it could lead to a drop to $496. However, if the price rebounds off the 20-day EMA, it would indicate positive sentiment and aggressive buying by traders. The bulls would then attempt to push the price to $645, and a break above this level could propel the price to $692.
Solana:
Solana once again turned down from the overhead resistance of $205 on April 1, suggesting aggressive selling at that level. The pair could reach the 20-day EMA ($180), an important support level to monitor. If the price bounces off the 20-day EMA, it would indicate continued buying by the bulls, enhancing the prospects of a break above $205. This could resume the uptrend and push the pair towards $267. However, if the price continues to fall below the 20-day EMA, it would suggest bearish sentiment, potentially leading to a drop to the 50-day SMA ($147).
XRP:
XRP has formed a symmetrical triangle pattern in its price action, indicating a period of indecision between the bulls and bears. The flattish 20-day EMA and the RSI just below the midpoint do not provide a clear advantage for either side. To suggest an upward move to the significant resistance at $0.74, the bulls must push the price above the triangle. Conversely, if the price breaks below the triangle, it would indicate bearish control, potentially leading to a drop to $0.52.
Dogecoin:
The bulls are attempting to establish support at Dogecoin’s $0.19 level but are struggling to push the price above $0.23. Bears may try to sink the price below the 20-day EMA ($0.18), leading to increased selling and a potential drop to the 50-day SMA ($0.14). On the other hand, if the price breaks above $0.23, it would suggest that the bulls are attempting to resume the uptrend, with the pair potentially rallying to $0.30.
Cardano:
Cardano’s failure to rise above the $0.68 resistance indicates bearish activity at higher levels. The bears have pulled the price below the immediate support at $0.63 and may attempt to extend the decline to the solid support at $0.57. If the price rebounds off $0.57, it would suggest a range-bound market between $0.57 and $0.68. However, a plunge below the critical support at $0.57 would complete a bearish head-and-shoulders pattern, potentially leading to a deeper correction to $0.46. Bulls will need to push the price above $0.68 to regain control.
Avalanche:
Avalanche has remained above the 20-day EMA ($53) but has struggled to start a strong rebound, indicating a lack of aggressive buying by bulls. The recent selling led the AVAX/USDT pair to the $50 support level, which is crucial to watch. Breaking below it could accelerate selling and push the pair to $42. This negative view would be invalidated if the price turns up and breaks above the downtrend line, potentially leading to a rise to $60 and the overhead resistance at $65.
This article is for informational purposes only and does not constitute investment advice or recommendations. Readers should conduct their own research before making any investment decisions.