Many Leading Coins Are One Step Away From Another Sell-Off

While the crypto market has rebounded from recent lows, this rebound has not been strong. Those who wonder why cryptos lack momentum should take a closer look at the charts of several leading coins.

Leading Cryptocurrencies Consolidate Near Recent Lows

Let’s take a look at a few charts. We’ll start with Binance Coin, the world’s 4th biggest cryptocurrency, according to CoinMarketCap.

BNB has been trading in a range after the rapid sell-off in the second half of January and failed to develop upside momentum.

The technical chart for Cardano looks similar, but it is even more bearish:

ADA is consolidating above the $1.00 level, and a move below this level will likely trigger a sell-off.

Moving on to meme coins, the situation is the same. Dogecoin and Shiba Inu are consolidating after the recent pullback, and their charts show no signs of increased buying activity. Let’s take a look at Dogecoin:

I’d note that charts of XRP, DOT, LTC, and a number of other coins look similar as well.

What This Means For Crypto Investors

As they say, the trend is your friend. Currently, crypto markets are in a downside trend, so any consolidation near lows has a bigger chance of a downside breakout since it takes more “energy” (and buying power) to break the trend rather than to continue the trend.

In this light, crypto traders should closely monitor the dynamics of Bitcoin, which will indicate whether the appetite for risk is growing. Bitcoin moved away from recent lows near $33,000, but this move failed to provide material support to other coins, and it looks that traders are waiting for Bitcoin to break above the psychologically important $40,000 level before they’ll be ready to buy other leading coins.

In case Bitcoin fails to settle above the $40,000 and pulls back closer to recent lows, a sell-off in other leading coins is almost guaranteed, and the current consolidation will serve as the base for another strong downside move.