- Bitcoin and Ethereum have seen a deeper retracement than Solana.
- SOL bulls may have to wait for sentiment to change back in their favor before going long.
Bitcoin [BTC] and ether [ETH] some of their profits from earlier this month were recovered. As the halving approaches, we could see a sell-the-event type drop in the short term before the bulls pick up the pieces again.
On the other side Solana [SOL] maintained its bullish strength, although it has also slowed down over the past ten days. AMBCrypto compared their price charts to understand where prices might go next.
Bitcoin bulls may have to wait for even more retracement
Source: BTC/USDT on TradingView
BTC’s one-day market structure was bullish. A move below $50.5k would make the price bearish, while a move above $73.7k would mean a bullish continuation. At the time of writing, the Fibonacci retracement levels of $59.4k and $55.5k (light yellow) were key support levels.
AMBCrypto expects that one of these levels will likely be tested in search of liquidity before the uptrend can resume. This retest could happen quickly, in the form of a liquidation cascade, or it could be a lengthy step.
The RSI showed that momentum was neutral and buyers have recently lost their edge. The OBV also approached a support level in early March. Taken together, this indicated that buyers may not be able to keep prices above $60,000.
Research into liquidation levels showed where BTC could be attracted to next. The psychological level of $50,000 was bright on the heatmap, but based on the available evidence, such a drop was unlikely.
Closer to current market prices, the $60.8k, $57.2k and $55k levels were more achievable targets for the bears. A clearing of these liquidity pockets could pave the way for Bitcoin to resume its uptrend in earnest.
Ethereum had a perfect retest, but was still rejected
Source: ETH/USDT on TradingView
Unlike Bitcoin, Ethereum has already tested its 78.6% retracement level based on a recent rally. The drop to the $3160 level caused a strong, quick bullish reaction that pushed prices towards $3580.
Still, it wasn’t enough and the bulls were rejected just below $3600. The OBV also fell to a local high on February 21, when the $3000 mark was a resistance zone.
The RSI has been below neutral 50 for the past ten days, showing that bearish momentum is strong. Together, the indicators and price action showed that the retracement was not necessarily over. We could see ETH fall again to $3160 or lower.
There was a significant amount of liquidity at $3,000 that prices could test soon.
The on-chain metrics were a little more encouraging. The MVRV ratio remained positive, showing that holders were making a profit. The daily active address statistic has been trending higher since February 10.
The dormant circulation metric has been successful in marking a local top in recent months. Increases in this metric can also indicate panic selling at the bottom. Therefore, swing traders would want to see a sharp price drop in the key demand zones highlighted earlier.
A spike in dormant circulation could also mark the local bottom and provide a good buying opportunity.
Solana to $130 or $260 next?
Source: SOL/USDT on TradingView
While BTC and Ethereum saw notable retracements, SOL maintained its upward trajectory. It has not yet reached the 50% retracement level from the previous swing low. Although the bulls could not climb above the psychological $200, it still suggested that the bulls had strength.
This was further strengthened by the OBV remaining well above the resistance level that it broke after much effort at the end of February. Meanwhile, the RSI continued to rise above the neutral 50, showing that bullish momentum was dominant.
The USD 106.9 and USD 128.8 support levels could still be retested if Bitcoin falls below the USD 60,000 mark. However, indicators do not indicate that such a deep retracement is likely in the coming days.
The spot CVD has moved sideways over the past two days, but was previously in an uptrend. Spot demand slowed along with Open Interest as prices remained below $200 over the past week.
This suggested that bullish conviction was not yet strong, but also that selling pressure in spot markets was not notable. The bulls could stage a recovery, provided the sentiment behind BTC could also turn bullish.
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Overall, all three markets had a long-term bullish bias. A Bitcoin move back above the $73,000 level seems like a matter of when, not if, given recent demand.
In the coming months, the losses of the past two weeks could be just a blip.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.