Bitcoin's price may have hit a short-term top after reaching $110,000, but this could signal the beginning of a long-awaited altcoin season. Here’s a detailed analysis of the current market and what might come next.
Key Market Insights
- Bitcoin recently dipped below $109,588, but technical charts suggest traders are buying the dip.
- The Bitcoin futures market is over-leveraged, increasing the risk of a sharp correction.
- Several altcoins have pulled back from their resistance levels, indicating that sellers remain active during rallies.
Although sellers pushed Bitcoin below the $109,588 breakout level, lower prices continue to attract buyers. According to data from SoSoValue, investor interest remains strong. U.S. spot Bitcoin ETFs recorded inflows of $934 million on May 22, up from $608 million on May 21.
When Bitcoin surpassed its previous all-time high of $109,588, profit-taking amounted to approximately $10 billion—significantly lower than the $20 billion seen when it broke above $100,000 last December. This suggests that investors expect the upward trend to continue.
Veteran trader Peter Brandt stated on X that Bitcoin could still reach the $125,000 to $150,000 target range by the end of August.
However, the strong rally has attracted speculative traders using high leverage. Data from CoinGlass shows that Bitcoin futures open interest exceeded $80 billion on May 23. Over-leveraging increases the risk of forced liquidations during sharp price corrections, so traders should remain cautious.
Where are the key support levels for Bitcoin and major altcoins? Let’s analyze the charts of ten leading cryptocurrencies.
Bitcoin Price Analysis
Sellers are attempting to keep the price below the $109,588 breakout level, which could trap aggressive bulls. If this continues, the price may retreat to the 20-day Exponential Moving Average (EMA) at $103,652.
A strong rebound from the 20-day EMA would indicate continued bullish sentiment and dip-buying activity. Bulls may then attempt to push the price above $111,980 to resume the uptrend. If successful, the BTC/USDT pair could surge toward $130,000.
The first sign of weakness would be a break below the 20-day EMA, opening the door for a decline toward the psychological $100,000 level. Buyers are expected to defend this level vigorously. A break below $100,000 could lead to a fall toward the 50-day Simple Moving Average (SMA) at $94,001.
Ethereum Price Outlook
Ethereum (ETH) faced rejection at the $2,738 resistance level, indicating strong selling pressure.
The ETH/USDT pair may decline to the 20-day EMA at $2,388, a critical support level. A strong bounce from this level could lead to another attempt to break above $2,738. If successful, the pair may rally toward $3,000, with minor resistance expected near $2,850.
A sustained drop below the 20-day EMA would invalidate this bullish outlook. In that case, the pair could fall to $2,323 and then to $2,111.
XRP Market Position
XRP continues to trade within a broad range between $2 and $2.65, indicating a balance between supply and demand.
The flattening 20-day EMA ($2.35) and the Relative Strength Index (RSI) near the midpoint suggest that the XRP/USDT pair may continue to consolidate for a few more days.
A breakout above $2.65 would complete a bullish "head and shoulders" pattern, with a target of $3.70. Conversely, a drop below $2 would signal that bears have gained the upper hand, potentially leading to a decline toward $1.60 or even $1.27.
BNB Faces Resistance
BNB experienced a sharp pullback from the $693 resistance level on May 23, indicating active selling.
The long tail on the candlestick shows that the BNB/USDT pair found support at the 20-day EMA ($647), suggesting strong buying at lower levels. Bulls may try again to push the price above $693. A successful breakout could lead to a rapid rally toward the $732–$761 resistance zone.
If the price falls and breaks below the 20-day EMA, it would indicate profit-taking by bulls. The pair could then drop to the 50-day SMA at $612.
Solana Tests Key Level
Solana broke above the $180 resistance on May 23 but faced strong selling near $185.
The rising 20-day EMA ($167) and the RSI in positive territory suggest that the path of least resistance is to the upside. If buyers can sustain the price above $185, the SOL/USDT pair could rally to $210 and then to $220.
A reversal below the 20-day EMA would indicate that bulls are exiting, increasing the risk of a drop to the 50-day SMA at $147.
Dogecoin Pulls Back
Dogecoin (DOGE) retreated from the resistance above $0.26, showing that bears are defending this level.
The DOGE/USDT pair may decline to the 20-day EMA at $0.21, a critical support. A strong rebound from this level would be a positive sign, increasing the likelihood of a break above $0.26. If that happens, the pair could rally to $0.35, with minor resistance near $0.29.
A break below $0.21 would invalidate this optimistic view and could lead to consolidation between $0.14 and $0.26.
Cardano at a Crossroads
Cardano bounced from the neckline of a head and shoulders pattern but failed to break above the $0.86 resistance. A drop below the neckline would indicate active selling at higher levels. The ADA/USDT pair could then fall to the 50-day SMA ($0.69) and then to the strong support at $0.60.
Alternatively, a strong rebound from the 20-day EMA ($0.75) would indicate demand at lower levels. Bulls may then attempt to push the price above $0.86. A breakout could lead to a climb toward $1.01.
Sui Resistance Holds
Buyers failed to push Sui above the $4.25 resistance on May 22, indicating strong selling.
Repeated failures to break above $4.25 may lead to profit-taking by short-term traders, causing the price to drop below the 20-day EMA ($3.73). A sustained move below this level could lead to a decline toward the 50-day SMA ($3.09).
If the price rebounds from the 20-day EMA and breaks above $4.25, it would signal a resumption of the uptrend. The SUI/USDT pair could then rise toward $5 and eventually test the $5.37 resistance level.
Hyperliquid Breaks Out
Hyperliquid (HYPE) broke strongly above the key resistance at $28.50 on May 22, signaling the start of a new upward move.
On May 23, buyers pushed the price above $35.73, but the long wick on the candlestick shows that sellers are defending this level. If buyers maintain pressure, the HYPE/USDT pair could rally toward $42.25.
Bears need to act quickly to reverse the trend. They would need to push the price below the 20-day EMA ($26.32), which would suggest a local top near $37.59.
Chainlink Struggles to Sustain Momentum
Chainlink broke above the resistance line of a descending channel on May 22, but buyers are struggling to maintain upward momentum.
Bears are trying to pull the price back into the channel. A drop below the neckline would indicate that the breakout was a bull trap. The LINK/USDT pair could then fall to $13.20, remaining trapped inside the channel.
If the price rebounds strongly from the resistance line, it would suggest that bulls are turning it into support. The pair could then climb to $18 and challenge $19.80.
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Frequently Asked Questions
What does a 'head and shoulders' pattern indicate in trading?
A head and shoulders pattern is a bearish reversal indicator that often signals the end of an uptrend. It consists of three peaks: a higher peak (head) between two lower ones (shoulders). A break below the neckline confirms the pattern and suggests further downside.
How does leverage affect cryptocurrency trading?
Lverage allows traders to open larger positions with less capital. While it can amplify profits, it also increases the risk of significant losses, especially during volatile market conditions. Over-leveraging can lead to forced liquidations if the market moves against the trader's position.
What is the significance of the 20-day and 50-day moving averages?
The 20-day and 50-day moving averages are commonly used to identify trends and support/resistance levels. The 20-day EMA reacts more quickly to price changes, making it useful for short-term trends. The 50-day SMA provides a broader view of medium-term momentum.
Why is the $100,000 level important for Bitcoin?
The $100,000 mark is a psychological barrier and a round number that often attracts significant attention from traders and investors. It represents a major milestone and could act as both resistance and support depending on market sentiment.
What are the risks of trading altcoins during a bull market?
Altcoins can offer high returns but are generally more volatile and less liquid than Bitcoin. They may also be influenced by project-specific news, regulatory changes, or market sentiment shifts. Proper risk management is essential when trading altcoins.
How can I identify a valid breakout in cryptocurrency trading?
A valid breakout typically involves a decisive move above a key resistance level or below a support level, accompanied by increased volume. It should hold for multiple trading sessions to confirm that it is not a false signal or "bull trap."