Risky assets have had an impressive performance in the first quarter of 2024. The S&P 500 Index (SPX) saw a 10.2% increase, marking its best first-quarter performance since 2019. Meanwhile, Bitcoin (BTC) rallied by almost 69%. The question now is whether this rally will continue into the second quarter or if it’s time to take 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 are helping to maintain a bullish sentiment.
However, traders need to exercise caution after the strong performance in Q1, as nothing goes up in a straight line. Bull markets are known for their sharp corrections that shake out late entrants. Nevertheless, these dips present a low-risk buying opportunity for long-term investors.
Now, let’s analyze the charts to determine the important support levels to watch out for in Bitcoin and altcoins.
S&P 500 Index:
The S&P 500 Index has bounced off the support of the ascending channel pattern and reached a new all-time high on March 28, indicating that the uptrend is still intact. While the upsloping moving averages suggest that the bulls are in control, the negative divergence on the relative strength index (RSI) raises the possibility of a correction or consolidation in the short term. The first sign of weakness would be a break below the 20-day exponential moving average (5,176), which could lead to a drop to the 50-day simple moving average (5,055). To maintain control, buyers will need to push the price above the channel, potentially triggering an upward move towards 5,450.
U.S. dollar Index:
The U.S. dollar Index has been gradually rising and has now reached a crucial overhead resistance level at 105. The upsloping moving averages and the RSI near overbought territory indicate that the bulls have the upper hand. If buyers can overcome the obstacle at 105, the index may continue to rise towards 106 and eventually 107. Conversely, if the price turns down from 105, the index could decline to the 20-day EMA (104), and a break below the moving averages could open the door to a possible fall to 102.50.
Bitcoin:
Bitcoin is struggling to break above $71,770, and the recent correction indicates that bears are still holding strong. The tight-range trading suggests an imminent breakout, but it’s difficult to predict the direction with certainty. 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, a breakout above the $71,770 to $73,777 zone could signal the start of the next leg of the uptrend, with the pair potentially rallying towards $80,000.
Ether:
Ether has been facing difficulties in surpassing the immediate resistance at $3,679, indicating that bears are trying to gain control. If they succeed in breaking below the 50-day SMA ($3,386), selling could intensify, and the ETH/USDT pair may decline to $3,250 and subsequently to the critical support at $3,056. To prevent a decline, bears will need to push the price above $3,679, potentially leading to a retest of $4,000. However, this level may act as a significant hurdle, and only if bulls prevail, the pair could reach $4,500.
BNB:
BNB turned down from $620 on March 29, suggesting profit booking by short-term traders. The 20-day EMA ($562) is an important support level to watch out for, as a break below it could push the BNB/USDT pair to $496. On the other hand, if the price rebounds off the 20-day EMA, it would indicate positive sentiment and buying the dips, potentially leading to another attempt to push the price to $645. 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, indicating aggressive selling. The pair could reach the 20-day EMA ($180), a crucial support level to watch. If the price bounces off the 20-day EMA, it would suggest that bulls continue to buy the dips, enhancing the prospects of a break above $205 and a potential rally towards $267. However, if the price continues to decline and breaks below the 20-day EMA, it could signal that bulls are exiting, potentially leading to a drop to the 50-day SMA ($147).
XRP:
XRP has formed a symmetrical triangle pattern, indicating indecision between bulls and bears. The flattish 20-day EMA and the RSI just below the midpoint do not provide a clear advantage to either buyers or sellers. To suggest an up move, bulls will need to push the price above the triangle, potentially targeting the resistance at $0.74. Conversely, if the price breaks below the triangle, it could indicate bearish control, with further selling below the uptrend line potentially pushing the XRP/USDT pair to $0.52.
Dogecoin:
Bulls are attempting to establish support at $0.19 for Dogecoin but are struggling to push the price above $0.23. If bears succeed in sinking the DOGE/USDT pair below the 20-day EMA ($0.18), selling could intensify, potentially leading to a drop to the significant support at the 50-day SMA ($0.14). On the other hand, a breakout above $0.23 would suggest that bulls are trying to resume the uptrend, with the pair potentially rallying towards $0.30, where it may face resistance from bears.
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 they may attempt to extend the decline to the solid support at $0.57. A rebound from this level would suggest a range-bound movement between $0.57 and $0.68. However, a break below the critical support at $0.57 would complete a bearish head-and-shoulders pattern, potentially leading to a deeper correction to $0.46. To regain control, bulls will need to push the price above $0.68.
Avalanche:
Avalanche has struggled to rebound strongly after staying above the 20-day EMA ($53) in recent days, indicating a lack of aggressive buying. The selling pressure on April 1 led to a drop to the $50 support level, which is crucial to watch. A break below $50 could accelerate selling and push the AVAX/USDT pair to $42. However, if the price turns up and breaks above the downtrend line, the negative view would be invalidated, and the pair could rise to $60 and eventually target the overhead resistance at $65.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making any decisions.