Investors cheered signs of inflation peaked, and the S&P 500 rose for the fourth consecutive week. Bitcoin (BTC), and other altcoins, also saw a prolonged recovery. This suggests that investors are increasing risk exposure.
Similar trends have been observed in cryptocurrency markets. According to Glassnode analysts, Altcoins led by Ether, (ETH), outperformed Bitcoin following clarity on Ethereum’s Merge.
Daily view of crypto market data. Source:Coin360
QCP Capital, a trading firm, is concerned about the market’s momentum. The open interest in Ether options has risen to $8 billion. This is more than the Bitcoin option OI of $5 billion. Glassnode stated that traders were making profits from the spread between their quarterly spot-long Ether positions and the quarterly short Ether futures.
Could Bitcoin and altcoins see a rapid recovery? Let’s look at the charts of top 5 cryptocurrencies that could outperform in near future.
Bitcoin rose above $24,668 overhead resistance on Aug. 13th and 14, but the bulls couldn’t sustain higher levels. This suggests that bears are selling on rallies, but repeatedly breaking an overhead resistance tends t weaken it.
Daily chart of BTC/USDT Source: TradingView
The upwardly moving 20-day exponential moving mean of $23,414 (in the positive territory) and relative strength index (RSI in the positive territory suggest that the path to the upside is the most difficult. The momentum could pick-up further if bulls maintain the price above $25,000 and the BTC/Tether(USDT) pair could rally up to $28,000.
Although this level can be a resistance, bulls could overcome it and extend their rally to $32,000. The 20-day EMA is the critical level to monitor for downside. It will bounce back if the sentiment is positive and traders are buying dips.
Contrarily, if the price falls below the current level or breaks below the 20 day EMA, it will indicate that bears are still active at higher levels. The price could drop to the $21,976 50-day simple moving mean.
BTC/USDT 4-hour chart. TradingView
The $24,668 level has witnessed a fierce battle between bulls and bears. Buyers have an advantage because of the upwardly moving averages, but buyers may lose momentum if there is a negative divergence in the RSI.
The bears will gain a slight advantage if the price falls below the 20EMA. The price could fall to the 50 SMA, and then to $23,600. The up-move could also resume if the price rises above the $20-EMA and reaches $25,050.
Cardano (ADA), broke and closed above $0.55 overhead resistance on Aug. 13. This is a sign that the uncertainty is now in favor of bulls.
Daily chart ADA/USDT Source: TradingView
Bulls are favored by the rising 20-day EMA at $0.52 and the positive RSI. The ADA/USDT currency pair could rise to $0.63 before reaching the overhead resistance of $0.70. This level is likely attracts strong selling from the bears.
Contrary to the assumption, if the price falls below the current level and then breaks below the 20 day EMA, it could indicate that the $0.55 break may have been a bear trap. The price could fall to the 50-day SMA at $0.49, or later to $0.45.
ADA/USDT 4-hour chart. Source: TradingView
On a break above $0.55, the pair formed an ascending triangle pattern. The RSI at the 4-hour chart was now overbought, which could have tempted traders to take profits.
The breakout level at $0.55 could be reached. Bulls could flip this support level into support and the pair will continue its upward move to $0.65. If the price falls below the uptrend line, this positive view may be invalidated.
Uniswap has been consolidating between $9.83 and $8.11 over the past few days. This indicates that bulls are buying dips, but bears are protecting the overhead resistance.
Daily chart of UNI/USDT Source: TradingView
The stronger the breakout from the range is, the longer the price stays within the range. Buyers have an advantage because the 20-day EMA at $8.54 is moving up. The RSI is also in positive territory. The UNI/USDT pairing could gain momentum if bulls push the price higher than $9.83. This would allow the pair to rally towards $10.55, and then later to $12.
If the price falls below the 20-day EMA and the current level, it could indicate that the pair will continue to trade in a range. To gain the upper hand, the bears must sink below $8.11 and maintain it there.
UNI/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the bears defending the area between $9.50 to $9.83. The sellers will try to sink the pair below $8.74 if the price falls below $8.74. Expect the buyers to purchase the dip below $8.74.
Flattening moving averages, and the RSI close to the midpoint indicate that range-bound action could continue for some time. A break above $9.83, or a close below $8.11 could be the next trending move.
Related: Bitcoin price hits $25K, as bearish voices declare that BTC is at a ‘double top’
Chainlink (LINK), has traded in a wide range between $5.50 to $9.50 over the past few weeks. Although the bulls tried to push the price higher than the range on Aug. 12, the bears prevailed.
Daily chart for USDT LINK. Source: TradingView
The bulls are ahead of the pack with a 20-day EMA at $8.00. However, the RSI is in positive territory and is sloping upward. The bulls will attempt to overcome the $9.50 overhead barrier if the price bounces off the 20-day EMA. The LINK/USDT pair may rally to $12.30, and then to $13.50 if they succeed.
If the price falls below the 20-day EMA it will mean that traders are making profits close to the resistance. This could cause the pair to fall below the $50 SMA at $7.00, and decrease the stay within the range for a few days.
LINK/USDT 4-hour chart. Source: TradingView
The overhead resistance of $9.50 was broken and the price fell below the 20-EMA. This could indicate that traders are making profits. This could lead to the pair dropping below the 50-SMA.
The bulls will attempt to push the pair higher than $9.50 if the price bounces off the 50 SMA. The pair may begin the next leg in the up-move if they succeed. The pair could fall to $8.29 if it falls below the 50 SMA.
Although Chiliz (CHZ), has shown a strong recovery over the last few days, the candlestick’s long wick of the Aug. 14 candlestick indicates that bears are protecting $0.19 overhead resistance.
Daily chart CHZ/USDT Source: TradingView
The rising 20-day EMA value of $0.14 suggests buyers are in an advantage, but the RSI readings in the overbought area suggest a correction or consolidation in short term. The 20-day EMA is the critical level to monitor for a fall in the price.
If the level is retested, it will indicate that bulls see dips as buying opportunities. This will increase the chances of the pair breaking above the overhead resistance. The CHZ/USDT pair could rise to $0.22, and then to $0.24 if that happens.
If the price falls below the 20-day EMA the pair could slide down to the 50 day SMA of $0.12. This will indicate that the pair could form a range in near future.
CHZ/USDT 4-hour chart. Source: TradingView
The sharp rally in the pair pushed RSI into the overbought territory of the 4-hour chart. This indicated that a correction was possible or consolidation was possible. This could have been the beginning of a similar rally and the pair may decline to the 20EMA. This is an important level to watch.
If the price recovers from the 20-EMA, this will indicate that the positive sentiment is intact. The buyers will attempt to resume the upward movement. If the price falls below the 50 SMA, this bullish outlook will be negated.
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.