Technical indicators now scream the beginning of a wider downtrend, and Bitcoin‘s surge toward $120,000 has stopped. Following several tests of the $120,000 resistance, and months of strong momentum, the market has turned bearish, endangering important support levels.
The 50-day EMA had been a reliable support throughout the summer, so its loss is the most concerning thing for the market right now. The inability to maintain this level indicates that the short-term bullish momentum has run its course. Bitcoin is currently trading below this moving average, indicating a definite downward trend bias.
Now focus shifts to the 100-day EMA at $110,500. This level has historically served as a dependable Bitcoin bounce zone during consolidations. However, there is little assurance that the 100 EMA will hold this time around, given the quick decline in momentum.
The 200-day EMA, which is the next significant structural support, is located around $103,000. A clear break below it would most likely allow for a deeper retracement.
Momentum indicators support the pessimistic assessment. A shift toward seller dominance, and a loss of bullish strength, are what RSI is trying to tell us with a decline below 50. The likelihood of persistent downward pressure is increased if the RSI continues to decline into bearish territory in the absence of a dramatic reversal.
The bearish argument is supported by the trading volume. It appears that bulls are not intervening forcefully to defend important price levels because trading activity has been low despite the pullback. This lack of conviction makes the downtrend narrative even stronger.
Dogecoin can avoid it
After recent downward pressure, Dogecoin is struggling to hold onto important technical levels, putting it at risk of entering the bear market, but there is a chance. There are indications that DOGE might try to recover from its current zone and avoid a more severe breakdown, even though bearish sentiment is beginning to seep into the market.
The fact that the 50-day EMA is still above the 100-day and 200-day EMAs is the key technical indicator in favor of this outlook. This alignment demonstrates that, in spite of the recent price weakness, DOGE is still holding a medium-term bullish structure. The price is also holding onto the 50-day EMA support, which has served as a buffer against more severe drops. There is a good chance DOGE will recover if it can hold this level.
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Declining volume on the downside moves is another element that favors DOGE. When sell-off volume is declining, it usually means that the bearish momentum is not being aggressively maintained. According to this, sellers might be losing faith, and a lack of resolute action could give DOGE the time it needs to stabilize and bounce back.
Still, there are a lot of risks. A rapid decline below the 50 EMA would expose DOGE to the 100 EMA support at $0.21, and a subsequent breakdown might put the 200 EMA at $0.20 to the test. If those levels were broken, the market would enter a pronounced bearish phase, greatly diminishing the likelihood of a recovery.
Positively maintaining current support might allow DOGE to retest the resistance zone between $0.24 and $0.26, which has proven difficult in recent months. The first clear indication of a fresh bullish push would be breaking through that area.
Shiba Inu: End of symmetrical triangle
Shiba Inu‘s position at the bottom of a symmetrical triangle pattern that has been compressing over the last few months puts it in a very risky trading position. The peak of the spike in volatility we are witnessing right now is approaching. The breakout’s direction will probably determine SHIB’s next significant move, so the price action at this point is crucial.
SHIB is having trouble close to the triangle’s lower boundary, and the declining trading volume indicates that neither bulls nor bears are very confident. Because traders wait for confirmation before investing, low volume inside consolidation patterns frequently precedes significant swings. It is likely that the final breakout will be more explosive the longer SHIB remains within this narrowing range.
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The fact that the 50-day EMA is about to move below the 100-day EMA is adding to the pressure. A bearish signal would result from such a development, which would contrast the midterm strength with the short-term momentum’s waning. Verified, this cross might push SHIB below its crucial support at $0.000012, which would allow for further declines.
The proximity to the triangle’s tip, on the other hand, indicates that buyers may initiate a significant upward move if SHIB is able to recover from its current position and maintain support. A break above $0.000014-$0.000015 would dispel short-term pessimism and probably lead to a volatility-driven rally, with possible targets returning to the $0.000017 region.
