The market’s losing streak of three weeks has been extended by the decline in US equities markets last Wednesday. For the first time since 2019, the Nasdaq Composite lost six consecutive days. Markets’ negative reaction to the August jobs report, which appeared positive, suggests that traders are worried about the Federal Reserve’s future actions and their effects on the economy.
The weakness in the U.S. equity markets brought Bitcoin (BTC), back below $20,000 on September 2, and bears maintained the price below that level over the weekend. According to CoinMarketCap data, this brought Bitcoin’s market dominance down to 39% on September 4, its lowest level since June 2018.
Daily view of crypto market data. Source:Coin360
Investors who believe in the long-term prospects for cryptocurrencies may be able to take advantage of the opportunity to build their positions at lower levels, rather than trying to catch the bottom. Investors could opt to not chase higher prices during bear markets rallies, and instead look for strong support levels to buy.
Select altcoins may move higher if Bitcoin recovers. Let’s look at the charts of the top five cryptocurrencies that appear strong.
The Bitcoin price has traded in a tight range of $19,520 to $20,576 over the last few days, which indicates a balance between buyers and sellers in near-term. Despite buying on dips and selling at higher levels, bulls have not been able to overcome this selling.
Daily chart of BTC/USDT Source: TradingView
A favorable signal for sellers is the downsloping 20 day exponential moving average ($20.863) and negative relative strength index (RSI). The BTC/USDT pair may drop to the support zone of $18,910 to $18,626 if bears lower the price below $19520.
As this has been the case twice before, bulls will likely be able to buy in large quantities. To signal the resumption the downtrend, the bears must bring the price below $17.622.
To indicate that bears are losing their grip, buyers will need to push the price higher than the 20-day EMA. The price could rise to the 50 day simple moving average ($22.271).
BTC/USDT 4-hour chart. TradingView
Although the price recovered from the support at $19,520, the bears tried to stop the recovery at the moving Averages. This indicates that bears sell on every minor rally. The pair could resume its downtrend if bears drop below $19,520.
Contrary to popular belief, if bulls push the price higher than the moving averages, then the pair might attempt to rally to resistance at $20,576. To signal a possible trend change, buyers will need to clear this hurdle.
Cardano (ADA), although it is currently in a consolidation, is trying to move above the moving averages. This is a sign of lower demand and raises the likelihood of an up-move. It is why it was selected.
Daily chart ADA/USDT Source: TradingView
The 20-day EMA ($0.47) is flattened and the RSI has jumped to positive territory. This indicates that sellers are feeling less pressure. The ADA/USDT pair may rally if buyers can maintain the price above 50-day SMA ($0.50).
This level could act as a strong resistance again, but bulls could overcome it and rally to $0.70.
If the price falls below the 20-day EMA, this positive outlook could be retracted. The pair could slide back to $0.40 if that happens.
ADA/USDT 4-hour chart. Source: TradingView
The 20-EMA is moving up on the 4-hour chart and the RSI has climbed into overbought territory. This suggests that bulls are at the top of the market, but there is a possibility for a slight correction or consolidation in the short term.
It will indicate a shift in sentiment from buying on dips to selling on rallies if buyers can sustain the price above $0.48. This could lead to a price increase of $0.54, and then to the downtrend.
Bears must pull the price below $0.48 to invalidate this positive view. The pair could then slide to $0.44, and then to $0.42.
Cosmos (ATOM), which has gained ground over the last few days, is trading close to its overhead resistance of $13.45. This suggests that traders aren’t closing their positions because they expect the price to rise. This is why it was included in this list.
Daily chart ATOM/USDT Source: TradingView
Although the ATOM/USDT price fell below the 50-day SMA ($11.08), the bulls bought at lower levels. This triggered a rebound that reached $13.45, the overhead resistance. The upwardly rising moving averages, and the RSI in positive territory suggest that the path of least resistance leads to the upside.
The pair could gain momentum if buyers push the price higher than $13.45, and rise to $15.30, and then to $20. If the price drops sharply or falls below the psychological support of $10, this positive outlook could be invalidated.
ATOM/USDT 4-hour chart. Source: TradingView
The 20-EMA is moving up, and bulls are buying dips to this support. This indicates a positive sentiment short-term. The bulls will push the price towards $13.45, the overhead resistance. This level is important to watch because a break or close above it could signal the resumption the up-move.
If the price falls below the overhead resistance or current level and then breaks below the 20EMA, this will indicate that bears may be active at higher levels. For a while, the pair could remain in a range between $10 and $13.45.
Related: Surge and purge? The Merge may not be able to save Ethereum’s price from ‘Septembear.
Filecoin (FIL), which had traded in tight ranges between Aug. 27th and Sept. 2, was finally able to move up on Sept. 3. This coin was chosen because of the expectation that buyers would continue to buy.
Daily chart of FIL/USDT Source: TradingView
The FIL/USDT currency pair surged and broke above the $20 EMA ($6.39) on September 3. This is the first sign that buyers are trying to make a comeback. The bears will not surrender easily, and they pose a formidable challenge to the SMA (50-day) ($6.92).
On Sept. 4, the bears brought the price below the 20-day EMA. The pair could fall to $5.50 if they keep the price below the EMA. If the price rises from its current level and crosses the 50-day SMA it will signal strong buying of dips. The price could rise to $9, and then to $9.50.
FIL/USDT 4-hour chart. TradingView
Although the pair fell from the overhead resistance zone of $6.80 to $6.60, a minor plus is that bulls have not allowed price to slip below 20-EMA. The possibility of a breakout and closing above the zone is increased if the price recovers from the current level.
The pair will then complete an inverse head-and-shoulders pattern. This could give the pair momentum to rally towards the pattern target of $7.6 or later, $8.30.
If the price closes below 20EMA, this positive outlook could be invalidated. The pair could drop to $5.50, the strong support.
EOS made the list due to its ability to maintain above the moving averages despite all the chaos. This is a sign of short-term outperformance, and it increases the chances for a rally if sentiment improves in the cryptocurrency sector.
Daily chart EOS/USDT Source: TradingView
On Aug. 21, the EOS/USDT pair formed a rounding top pattern, but the bulls couldn’t sustain higher levels. Strong selling was evident as the bears brought the price below the breakout level of Aug. 28.
The buyers bought the drop to the 50 day SMA ($1.33) with a lot of aggression. This is a minor plus. The 20-day EMA ($1.48) is now flattened and the RSI is close to the midpoint. This indicates that there is a balance between sellers and buyers.
If bulls push higher than $1.60, this balance could swing in their favor. The overhead resistance could be near $2, which would allow the pair to rally. A break below the 50-day SMA may open the door to a possible fall to $1.15.
EOS/USDT 4-hour chart. TradingView
The bears have sold the rebound at $1.60 and are trying to get the price below $1.46. The pair could fall to the downtrend line if they succeed. The bulls will defend this level, which has served as strong support three times before.
The price could rebound from the uptrend line, break above $1.60 and gain momentum to rally to $1.80 or later to $2. A break or close below the uptrend will indicate that the short-term upward-move may be over. This could lead to a decline in the pair to $1.24
You should research all aspects of trading and investment before making any decision.
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.