- Bitcoin is staring at an 18% pullback following the formation of a rising wedge pattern.
- Dogecoin depends on the 100-day SMA to keep declines at bay and perhaps resume the uptrend above $0.3.
Cryptocurrencies ran out of steam following the weekend session’s accrued gains. Most assets consolidated the gains on Monday, but headwinds increased intensity on Tuesday and Wednesday.
Altcoins suffered a great deal, with Ethereum almost testing $3,000 due to a rejection from near $3,400. Cardano had touched a new all-time high at $3 but currently teeters at $2.63, according to CoinGecko.
Ripple and Dogecoin are also in the red, having lost 1.1 and 2.9% of the values, respectively. Solana is working hard to keep afloat at $70, a move that may see bulls resume the uptrend to $80. The rest of the top 50 tokens are mainly in red, apart from a selected few like Binance Coin, PancakeSwap, and Tezos.
Bitcoin grapples with rising overhead pressure under $48,000. The pullback comes after BTC tested areas above $50,000 but failed to sustain the uptrend.
According to the Daily chart, the largest cryptocurrency has formed a rising wedge. This is a highly bearish pattern and often marks the beginning of a massive correction. If Bitcoin fails to close the day above $48,000, investors should start bracing for an 18% retreat to levels under $40,000.
However, several support areas are anticipated and will help avert the potential losses. These are the 200-day Simple Moving Average (SMA) currently at $46,000 and the previous support at $44,000. If push comes to shove, BTC will retest $42,000 while further losses are unlikely to come into the picture.
BTC/USD Daily Chart
The meme-based token failed to hold the price above $0.3 earlier this week and now is seeking support at the 100-day SMA. Support at this level is crucial to the world’s seventh-largest cryptocurrency.
Trading below the 100 SMA will leave DOGE highly unstable as some investors sell to cash out for profit before it hits $2.5 and other lower levels. This will also accentuate a sell signal recently presented by the Moving Average Convergence Divergence (MACD) indicator. As the MACD drops to the mean line, the downtrend catches momentum.
DOGE/USD Daily Chart
The Relative Strength Index (RSI) also reinforces the bearish outlook amid the drop from the overbought area to the midline. If the RSI closes the gap to the oversold region, losses will explode, sending Dogecoin toward $0.2.