Major US equity indices continued their decline over the past week as macroeconomic conditions worsened and concerns of a global recession increased. The Dow Jones Industrial Average closed at its lowest level in 2022 and major indices posted their fifth weekly close in the past six weeks.
Although Bitcoin (BTC) is only marginally down this week, it is at risk of closing at its lowest level since 2020. While a new multi-year weekly close is a negative sign, sellers need to hold the lower levels or it could prove to be a bear trap. The next few days price action is likely to show increased volatility as both the bulls and bears battle for dominance.
Daily crypto market data view. Source: Coin360
Several investors miss buying opportunities during sharp corrections as they attempt to bottom. Traders should rather focus on the projects they like and gradually accumulate the coins over a few weeks or months. Not all coins bottom at the same time, so it’s better to focus on individual cryptocurrencies showing strength.
As bitcoin nears its yearly lows, certain altcoins are holding up well. Let’s look at the charts of five cryptocurrencies that look interesting in the short-term.
BTC/USDT
Bitcoin bulls have successfully defended the $18,626-$17,622 support zone for the past few days, but they continue to face heavy selling at the 20-day exponential moving average ($19,720). This suggests that bears will continue to sell on smaller rallies.
BTC/USDT daily chart. Source: TradingView
The sloping moving averages suggest that the bears have the upper hand, but the relative strength index (RSI) positive divergence suggests that the bearish momentum may be weakening.
A break and close above the 20-day EMA will be the first sign that the bears might lose their footing. The BTC/USDT pair could then rally to the 50-day simple moving average ($21,043) and later to $22,799. Buyers need to clear this barrier to set the stage for a rally to $25,211.
Conversely, if the bears sink the price below the June low of $17,622, selling could intensify and the pair could resume its downtrend. The pair could then crash to $14,500.
BTC/USDT 4 hour chart. Source: TradingView
The bulls are buying the dip below $18,626 but the bears continue to hold off the rally at the 50-SMA. This has pushed the price between these two levels, but this tight trade is unlikely to last long.
If the price turns down and sustains below $18,626, the bears could pull the pair to the key support at $17,622. At this level, a strong fight between the bulls and the bears could occur again. On the upside, the pair could rally to $20,400 if bulls push the price above the 50-SMA.
ATOM/USDT
Cosmos (ATOM) has been trading above the breakout level of $13.46 for the past few days, suggesting sentiment remains positive and traders are buying on dips.
ATOM/USDT daily chart. Source: TradingView
The 20-day EMA ($14.22) has flattened out and the RSI is near the midpoint, indicating an equilibrium between supply and demand. If the price breaks above $15.26, the short-term advantage could tip in favor of buyers. The ATOM/USDT pair could then rally to $17.20.
This level could act as resistance again, but if buyers push the price above it, the pair could gain momentum and rally to $20.34 and later to $25.
Contrary to this assumption, the advantage could tip in the bears’ favor if the price turns down and falls below the 50-day SMA ($12.90). The pair could then drop to $10.
ATOM/USDT 4 hour chart. Source: TradingView
The pair has been stuck between $13.45 and $17 for a while. Buyers aggressively defended the $13.45 support and are attempting to push the price above the 50-SMA. When they do that, the probability of a rally increases to $16 and then $17 thereafter.
Conversely, if the price turns down from the current levels and falls below the 20-EMA, it will indicate that the bears will continue to sell on rallies. That could pull the price to the strong support at $13.45. Sellers need to sink the pair below $13 to open the way for a potential drop to $11.50.
ALGO/USDT
The uncertainty of the range bound action between $0.27 and $0.38 dissolved to the upside on Sep 23, suggesting the start of a fresh move higher. In this case, Algorand (ALGO) could still be in the first phase of the uptrend.
ALGO/USDT daily chart. Source: TradingView
The key level to watch on the downside is $0.38. If bulls reverse this level into support, it could increase the probability of starting a new uptrend. The ALGO/USDT pair could then rally to $0.45 and later to $0.50.
This optimistic view could be invalidated in the short term if the price falls below $0.38 and reenters the range. That could sink the price to the 20-day EMA ($0.33). If the price bounces off this level, the bulls will make another attempt to clear the overhead resistance.
ALGO/USDT 4 hour chart. Source: TradingView
The price surged above the overhead resistance at $0.38 but the bulls failed to build on this momentum. This shows that the bears are not giving up just yet and will continue to sell on rallies near $0.41.
If bears sink the price below the 20-EMA, the pair could drop to $0.36. This is an important level for the bulls to defend as a break below it could open the doors for a potential drop to the 50-SMA.
On the upside, the bulls need to push the price above $0.41 to signal a resume of the upward move.
Related: What is scalping in crypto and how does scalping trading work?
CHZ/USDT
Chiliz (CHZ) rebounded sharply from its June lows and the bulls broke the overhead resistance at $0.26 on September 22, signaling the resumption of the upward move. When a coin moves against market sentiment, it deserves a close look.
CHZ/USDT daily chart. Source: TradingView
The bears have been trying to sink the price below the $0.26 breakout level for the past three days, but the bulls have held their ground. This shows that bulls are viewing the dips as a buying opportunity. The rising moving averages and the RSI in the positive territory show that the buyers are in charge.
If the price turns up and breaks above $0.28, the CHZ/USDT pair could rally to the next stiff resistance at $0.33.
Conversely, if the price turns down and breaks below $0.26, it will indicate that traders might rush for the exit. The pair could initially drop to the 20-day EMA ($0.23) and later the 50-day SMA ($0.21).
CHZ/USDT 4 hour chart. Source: TradingView
Both the moving averages are sloping up, suggesting an upside for buyers, but the negative divergence on the RSI shows that the bullish momentum could be weakening. If the bears sink the price below $0.26, the pair could drop to the 50-SMA. This is a key level for the bulls to defend because if it gives way, the pair could drop to $0.22.
On the other hand, if the price recovers from $0.26 and scales above $0.28, the upward movement might resume. The pair could then rally to $0.32.
QNT/USDT bn
Quant (QNT) is showing strength as it trades above both the moving averages. Even when sentiment across the cryptocurrency sector has been negative, it has managed to charge higher fees.
QNT/USDT daily chart. Source: TradingView
The bears had been defending the $112 level for the past few days, but the bulls broke the resistance on September 24 and pushed the price to the downtrend line. The long wick on the daily candle shows that the bears are attempting to halt the upside at this level.
On a small positive note, the bulls bought the drop to $112 on Sep 25, suggesting that the buyers are trying to turn this level into support. The QNT/USDT pair might rally again to the downtrend line. If this hurdle is cleared, the pair could rally to $133 and later to $154.
Alternatively, if the price turns down and falls below $112, the next stop could be the 20-day EMA ($106). A break below this support could drag the pair to $95.
QNT/USDT 4 hour chart. Source: TradingView
The pair gained momentum after breaking above $112 and reached near the downtrend line. This pushed the RSI into overbought territory, which may have enticed short-term traders to book profits.
The price recovered from $112, suggesting that sentiment remains positive and traders are buying on dips. The pair could rally to $121 and then to the downtrend line. On the upside, a break below $112 could sink the pair to the 50-SMA and $95 thereafter.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should do your own research when making a decision.
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