Bitcoin’s (BTC) active supply — coins that have moved in the past two years or earlier — dropped to a five-month low of 44.5% on June 2, according to data from Glassnode. This indicates that investors who had purchased Bitcoin more than two years ago are not keen to sell after the 40% drop.
Even miners, who sold during the May correction have since reversed their decision. The outflows from miner addresses are at the lowest level in seven months, which suggests that miners are holding on to their Bitcoin.
Daily cryptocurrency market performance. Source: Coin360
Veteran trader Peter Brandt believes that Bitcoin’s correction could extend below $30,000. Brandt said that every 50% fall in Bitcoin’s history has stretched to 70%. He also highlighted that according to past precedence, Bitcoin is unlikely to hit a new all-time high within seven months of a 50% correction.
However, PlanB, creator of the stock-to-flow-based Bitcoin price models, believes a further sharp fall below $30,000 is unlikely. He also remains positive on the prospects of Bitcoin hitting a new all-time high this year.
At the moment, analysts are divided in their opinion on Bitcoin’s short-term price action. Let’s analyze the charts of the top-10 cryptocurrencies to determine the path of least resistance.
Bitcoin continues to trade inside a symmetrical triangle pattern as the bulls and the bears battle it out to establish their supremacy. Although the symmetrical triangle generally acts as a continuation pattern, it is difficult to predict with certainty until the price breaks out of the triangle.
BTC/USDT daily chart. Source: TradingView
The downsloping moving averages and the relative strength index in the negative territory suggest that bears have the upper hand. If the BTC/USDT pair breaks below the triangle, the bearish momentum could pick up. There is a minor support at $28,000 but if that also cracks, the pair could retest the $20,000 level.
This negative view will invalidate if the bulls push and sustain the price above the resistance line of the triangle. If that happens, it will suggest that bulls have overpowered the bears. The pair could then attempt a rally to the 50-day simple moving average ($49,201).
This level may again act as a stiff resistance but if the bulls propel the price above it, the pair will signal that the downtrend could be over.
Ether (ETH) turned down from the 20-day exponential moving average ($2,762) on June 1 but the positive sign is that the bulls did not give up much ground. This suggests that the buyers did not hurry to close their positions.
ETH/USDT daily chart. Source: TradingView
The 20-day EMA is flattening out and the RSI has risen near the midpoint, indicating that the selling pressure has reduced.
If buyers drive and sustain the price above the resistance line of the symmetrical triangle, the ETH/USDT pair could start a relief rally that may reach the 61.8% Fibonacci retracement level at $3,362.72 and then the 78.6% retracement level at $3,806.91.
Contrary to this assumption, if the bulls fail to sustain the price above the triangle, the pair may consolidate inside the triangle for a few more days. A breakdown and close below the triangle will indicate advantage to the bears.
Binance Coin (BNB) has risen above the 20-day EMA ($399) but it could face stiff resistance at $423.83. If the price turns down from this overhead resistance, the bulls will try to arrest the decline at the trendline.
BNB/USDT daily chart. Source: TradingView
If they succeed, it will suggest the bulls are attempting to form a higher low. This will increase the possibility of a break above $423.83. The BNB/USDT pair could then rally to the 50-day SMA ($505). A breakout of this resistance will suggest the downtrend may be over.
On the contrary, if the price turns down from the current level and plummets below the trendline, it will suggest the sentiment remains negative and traders are selling on rallies. The pair could then retest the critical support at $211.70.
Cardano (ADA) broke above the downtrend line on June 1 and the bulls are trying to extend the relief rally above $2 today. The 20-day EMA ($1.64) has started to turn up and the RSI is trading above 54, suggesting that the bulls have the upper hand.
ADA/USDT daily chart. Source: TradingView
If buyers succeed in pushing the price above $2, the ADA/USDT pair could rally to the all-time high at $2.47.
On the other hand, if the price turns down from $2, the bears will try to pull the price back below the downtrend line. If that happens, it will suggest that buying dries up at higher levels. The pair could then drop to the 50-day SMA ($1.52).
A breakdown and close below the 50-day SMA could attract further selling and the pair may drop to $1.33 and later to $1.
Dogecoin (DOGE) broke above the downtrend line on May 31 and cleared the 20-day EMA ($0.37) hurdle today. The RSI has jumped into the positive territory and the 20-day EMA has started to turn up, suggesting the bulls are making a comeback.
DOGE/USDT daily chart. Source: TradingView
If buyers propel the price above $0.47, the DOGE/USDT pair could pick up further momentum and rise to $0.59.
Conversely, if the price turns down from $0.47, the pair could correct to the 20-day EMA. If this support holds, it will suggest the sentiment has turned positive and traders are buying on dips. The bulls will then make one more attempt to push the price above $0.47.
However, if the price turns down and breaks below the 20-day EMA, the pair could drop to $0.28 and then to $0.21.
The bulls tried to push XRP above the 20-day EMA ($1.07) on June 1 but met with stiff resistance from the bears. However, the buyers did not give up much ground, indicating strength.
XRP/USDT daily chart. Source: TradingView
The bulls will again try to thrust and sustain the price above the 20-day EMA. If they manage to do that, the XRP/USDT pair could start its relief rally to the 50-day SMA ($1.30) and then to the downtrend line.
Alternatively, if the price turns down from the 20-day EMA, the pair could again drop to the $0.88 to $0.80 support zone. A break below this zone could result in a retest of the May 23 low at $0.65.
Polkadot (DOT) is inching towards the overhead resistance at $26.50. The price had turned down from this resistance on May 28, hence the bears are again likely to defend this level aggressively.
DOT/USDT daily chart. Source: TradingView
If the DOT/USDT pair turns down from $26.50 but bounces off the trendline, it will suggest that bulls are accumulating on dips.
That could result in the formation of a bullish ascending triangle pattern, which will complete on a breakout and close above $26.50. The pattern target of this setup is $35.91.
Alternatively, if the bears sink the price below the trendline, the pair could drop to the support at $15. A strong rebound off this support will suggest a few days of range-bound action between $15 and $26.50.
Uniswap (UNI) turned down from the 20-day EMA ($28.41) on June 1 but the positive sign is that the bulls did not allow the price to drift down. The buyers are again trying to push the price above the 20-day EMA today.
UNI/USDT daily chart. Source: TradingView
The repeated retest of a resistance level tends to weaken it. The 20-day EMA is flattening out and the RSI has risen above 48, indicating the selling pressure has reduced.
If buyers thrust the price above the 20-day EMA and $30, the UNI/USDT pair could rise to the 50-day SMA ($33.67). A breakout of this resistance could signal an end of the downtrend.
Conversely, if the price turns down from the 20-day EMA and plunges below $25.94, the bears will attempt to pull the pair down to $21.50. A breakdown and close below this support will suggest that the bears have reasserted their supremacy.
Internet Computer (ICP) remains weak as the bulls have not been able to push the price back above $120 in the past five days. This suggests a lack of aggressive buying even at the current levels.
ICP/USDT daily chart. Source: TradingView
If the bears sink and sustain the price below the $103.71 support, the ICP/USDT pair could resume its downtrend and challenge the May 19 low at $86. If this support cracks, the pair may drop to $60.
On the contrary, if bulls propel and sustain the price above $120, it will suggest accumulation at lower levels. That may clear the path for an up-move to $168.
If the price turns down from this resistance, a few days of range-bound action is likely. The pair could pick up bullish momentum on a breakout and close above $168.
Bitcoin Cash (BCH) rose above $685.36 on May 31. The bears tried to pull the price back below the level on June 1 but they could not sustain the lower levels. This suggests buyers are trying to form a higher low.
BCH/USDT daily chart. Source: TradingView
The relief rally is likely to face stiff resistance at the 20-day EMA ($801). If the price turns down from this resistance, the bears will make one more attempt to sink the BCH/USDT pair below the $685 to $600 support zone. If they succeed, the pair could retest the May 23 low at $468.13.
Conversely, if bulls drive the price above the 20-day EMA, the momentum could pick up and the pair may rally to the 50-day SMA ($958). This level may again act as a stiff resistance but if the bulls can thrust the price above it, the rally may extend to the 61.8% Fibonacci retracement level at $1,198.53.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.