Five consecutive weeks of decline in the S&P 500 as well as the Nasdaq indicate that traders are continuing to reduce their exposure to risky assets. Bitcoin’s (BTC), close correlation with US equity markets has led to its price staying under pressure.
Bitcoin’s decline has continued over the weekend, and now it is on track to suffer its sixth consecutive weekly loss. This is the first such loss since 2014. The entire crypto market’s market capitalization fell below $1.6 trillion due to the weakness of Bitcoin.
Daily view of crypto market data. Source:Coin360
Bearish sentiment means that traders will sell any negative news. There is also increasing sell pressure in the crypto market due to Terra’s U. S. Dollar stablecoin TerraUSD (UST).
Is it time to see a rebound after six consecutive week-ends of Bitcoin closing in the red? Let’s look at the charts of five top cryptocurrencies that show signs of stabilizing in near future.
Bitcoin fell below the support line for the ascending channel on May 5, after it dropped below the 20-day exponential moving index ($38,268) This also negated the positive divergence in the relative strength indicator (RSI)
Daily chart of BTC/USDT Source: TradingView
The moving averages are starting to slow down, and the RSI is approaching the oversold zone. This indicates that bears are in charge.
BTC/USDT has a support level of $34,322, but bears must defend this level or the pair could fall to $32,917. This level is important to watch because panic selling could occur and the pair could fall to $28,805.
The recovery may be halted if the price rises above $34,322. If the price drops below this level, that will indicate that traders are buying on rallies and the sentiment is still negative. This could increase the chances of a resumption or continuation of the downtrend.
If the bulls push the price higher than the 20-day EMA, this negative view may be invalidated in the short-term. The pair could reach the 50-day simple move average ($41,466) if that happens.
BTC/USDT 4-hour chart. TradingView
Although the moving averages are showing bears in command, the RSI oversold levels suggest that a relief rally is possible or a consolidation may be in the near future. The bears could maintain selling pressure if the recovery does not rise above the 20EMA. If that happens, the pair could fall to $32,917.
A break above the 20EMA could indicate a strong rally. The pair could then reach the 50-SMA. To signal that the downtrend is over, buyers will need to push the price to $40,000 and keep it there.
Algorand (ALGO), has been trading in a descending channel pattern over the past few days. The channel support line was broken on May 1, and bulls cleared the hurdle at the $20-day EMA ($0.69) indicating that selling pressure may be decreasing.
Daily chart for ALGO/USDT TradingView
The ALGO/USDT pair may rally to the resistance line if buyers can maintain the price above the SMA 50 ($0.76). This is an important level that the bulls must overcome. This will signal the beginning of a new up-move if they can do it. They could rise first to $1.10, and then to $1.25.
However, if the price moves below the resistance line, it may indicate that the pair will extend its stay within the channel for a few days. To indicate a resumption in the downtrend, the bears must sink below the channel.
ALGO/USDT 4-hour chart. Source: TradingView
The 20-EMA has moved up, and the RSI is now in the positive territory. This indicates buyers are in an advantage. The channel has a small resistance at $0.80. If bulls can overcome this obstacle, the pair may rise to the resistance line.
The 20-EMA level is the key level to watch. This will indicate that buyers are buying if the price bounces off of this level. This could increase the chances of a break above $0.80. Alternativly, if the price falls below the 20-EMA the next stop could possibly be the 50 SMA.
For the past few days, Monero (XMR), has found support near psychological support at $200. The sellers have not allowed price to fall below the downtrend line, suggesting they are trying to turn the level into support.
Daily chart of XMR/USDT Source: TradingView
To signal that the correction phase is over, the bulls must push the price higher than the 20-day EMA ($223). The XMR/USDT currency pair may rally to $289 if it overcomes the resistance at $240.
Contrarily, if the price drops below the current level or 20-day EMA it will indicate that the bears are not giving up. This could increase the chances of a break below $200. The selling could get more intense and the pair could drop to $150.
XMR/USDT 4-hour chart. Source: TradingView
The triangle-shaped symmetrical triangle formed by the pair suggests indecision between the bears and bulls. The triangle will indicate that the downtrend may be ending if bulls push the price higher than the resistance line. The price could rally to the 200 SMA, then rise towards the $252 pattern target.
If the uncertainty of the triangle turns to the downside, it could indicate that the triangle was acting as a continuation pattern. This could indicate a resumption or continuation of the downward movement. The pattern target for the downside is $164.
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Tezos (XTZ), which broke below the long-term trend line on April 29, was defended by the bears on May 5. The bears attempted to initiate a downtrend, but are having difficulty maintaining the lower levels.
Daily chart of XTZ/USDT Source: TradingView
Bulls pushing and maintaining the price above the uptrendline will indicate that markets have rejected the breakup. The XTZ/USDT currency pair could then try to rally to the overhead zone of the 50-day SMA ($3.18) and $3.40.
If the price falls below the uptrend line again, this positive outlook could be invalidated. This will indicate that bears have turned the uptrend line into resistance. Breaking the $2.39 mark could signal a new downtrend that could lead to $2.
XTZ/USDT 4-hour chart. Source: TradingView
The 20-EMA has sunk and the RSI formed a bullish divergence in the 4-hour chart, suggesting that negative momentum is waning. The bears could offer strong resistance and the pair could rally to $2.90. If the pair breaks and closes above this level, it could be possible for a move up to $3 or later to $3.30.
Or, bears could be selling rallies if the price falls below the overhead resistance or current level. This could mean that the price of the pair will remain between $2.90 to $2.39. If bears drop the price below $2.39, the downtrend could accelerate.
Theta Network’s THETA token traded between $2.27 to $4.40 over the past few weeks. The range shifted to the negative on May 6, which indicated that bears held the upper hand.
Daily chart THETA/USDT Source: TradingView
The 20-day EMA ($2.57) has been falling, but the RSI attempts to form a bullish divergence. This indicates that selling momentum is waning. Bulls pushing the price higher than $2.27 could trap aggressive bears that may have taken short positions in the breakout below the range.
The THETA/USDT currency pair could then move up to the 20-day EMA. This level is important to monitor as bulls could overcome it and rally to the 50 day SMA ($3.10).
If the price falls below the $2.27 breakdown level, or the current level of $2.27, this positive view may be invalidated.
THETA/USDT 4-hour chart. Source: TradingView
Bulls are buying dips that are close to $2 psychological level. The bears could lose their grip if buyers push the price higher than the downtrend line. The overhead resistance at $2.64 could be a trigger for the pair to rally. The overhead resistance at $2.64 may act as another strong resistance, but buyers can overcome this obstacle and bullish momentum could pick up.
Contrary to popular belief, if the price falls below the 20-EMA, or the downtrend line it will indicate that bears are continuing to sell on rallies. This could increase the chance of a break below $2 or the resumption the downtrend.
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.