Major United States stock market indexes continued their slide last week as worsening macroeconomic conditions raised fears of a global recession. The Dow Jones Industrial Average closed at its lowest level in 2022 and the major indexes recorded their fifth weekly close in the past six weeks.
Although Bitcoin (BTC) has fallen slightly this week, it risks closing at its lowest level since 2020. Although the new multi-year weekly close is a negative sign, sellers need to hold low or it could turn into a bear trap. The price action over the next few days is likely to witness high volatility as bulls and bears battle for supremacy.
Many investors miss opportunities to buy during sharp corrections because they try to catch the bottom. Traders should focus on projects they like and accumulate coins gradually over a few weeks or months. Not all coins will go down at the same time, so it is better to focus on individual cryptocurrencies that are showing strength.
As Bitcoin nears its annual lows, some altcoins are holding up well. Let’s take a look at the charts of five cryptocurrencies that look interesting in the near term.
Bitcoin bulls have successfully defended the $18,626 to $17,622 support zone over the past few days but they are facing strong selling at the 20-day exponential moving average ($19,720). This suggests that bears will continue to sell in short rallies.
Sloping moving averages suggest bears will prevail while a positive divergence on the Relative Strength Index (RSI) suggests bearish momentum may weaken.
A break and close above the 20-day EMA is the first sign that the bears are losing their grip. The BTC/USDT pair may then rise to the 50-day simple moving average ($21,043) and then to $22,799. Buyers must overcome this barrier to set the stage for a rally to $25,211.
Conversely, if the bears sink below the June low of $17,622, selling could intensify and the pair could resume its decline. The pair could then fall to $14,500.
Bulls are buying below $18,626 while bears continue to stall the recovery at the 50-SMA. This has squeezed the price between these two levels but this tight range trading is unlikely to continue for long.
If the price declines and breaks below $18,626, bears can pull the pair to key support at $17,622. This level may again witness a strong battle between the bulls and bears. On the upside, if the bulls push the price above the 50-SMA, the pair could rise to $20,400.
Cosmos (ATOM) has been trading above the $13.46 breakout level for the past several days, indicating that sentiment remains positive and traders are buying on dips.
The 20-day EMA ($14.22) is flat and the RSI is near the midpoint, indicating a balance between supply and demand. If the price rises above $15.26, the short-term advantage will tilt in favor of buyers. The ATOM/USDT pair may then rise to $17.20.
This level could once again act as resistance but if buyers bid above it, the pair could gain momentum and rise to $20.34 and then $25.
Contrary to this hypothesis, if the price turns lower and falls below the 50-day SMA ($12.90), the advantage may tilt in favor of the bears. The pair may then fall to $10.
The pair has been stuck between $13.45 and $17 for some time. Buyers aggressively defended the support at $13.45 and are trying to push the price above the 50-SMA. If they do, the possibility of a rally to $16 and then $17 increases.
On the contrary, if the price turns down from the current level and falls below the 20-EMA, the bears indicate to continue selling in rallies. That could pull the price to strong support at $13.45. Sellers need to sink the pair below $13 to clear the way for a possible decline to $11.50.
The range-bound action uncertainty between $0.27 and $0.38 resolved to the upside on September 23, signaling the start of a new up-move. If that happens, Algorand (ALGO) may still be in its first phase of an uptrend.
A key level to watch on the downside is $0.38. If the bulls turn this level into support, it could increase the likelihood of the start of a new uptrend. The ALGO/USDT pair may then rally to $0.45 and then to $0.50.
This bullish view may become invalid in the near term if the price breaks below $0.38 and re-enters the range. That could sink the price to the 20-day EMA ($0.33). If the price rebounds from this level, the bulls will again try to clear the overhead resistance.
The price rose above the overhead resistance at $0.38 but the bulls could not build on this momentum. This shows that the bears have not given up yet and are selling in rallies near $0.41.
If the bears drag the price below the 20-EMA, the pair could drop to $0.36. This is an important level for bulls to protect as a break below it could open the door to a possible decline to the 50-SMA.
On the upside, bulls need to push the price above $0.41 to signal the resumption of an up-move.
Related: What is scalping in crypto and how does scalping work?
Chiles (CHZ) recovered sharply from its June lows and bulls cleared overhead resistance at $0.26 on September 22, indicating the resumption of an up-move. When a coin moves against market sentiment, it gives a close look.
Bears have been trying to sink the price below the breakout level of $0.26 for the past three days while bulls have held their ground. This shows that the bulls are seeing the dips as a buying opportunity. Rising moving averages and RSI in positive territory indicate that buyers are in command.
If the price turns around and breaks above $0.28, the CHZ/USDT pair may rally to the next tough resistance at $0.33.
Conversely, if the price breaks down and falls below $0.26, it indicates that traders may be rushing for the exit. The pair may first dip towards the 20-day EMA ($0.23) and then the 50-day SMA ($0.21).
Both moving averages are on the downside indicating favor for buyers but a negative divergence on the RSI shows that the bullish momentum may be weakening. If the bears sink below $0.26, the pair may drop to the 50-SMA. This is an important step for the bulls to defend because if it gives way, the pair could drop to $0.22.
On the other hand, if the price rebounds from $0.26 and goes above $0.28, the up-move could resume. The pair may then rally to $0.32.
Quant (QNT) is showing strength as it is trading above both moving averages. Despite the negative sentiment across the cryptocurrency sector, it has managed to charge higher.
The bears had defended the $112 level for the past several days but on September 24 the bulls pierced through the resistance and pushed the price to the downtrend line. A long candle above the day’s candlestick shows that the bears are trying to stop an up-move at this level.
A small positive is that bulls bought the dip to $112 on September 25, indicating that buyers are trying to turn this level into support. The QNT/USDT pair may once again rise to the downtrend line. If this hurdle is cleared, the pair may rise to $133 and then $154.
Alternatively, if the price declines and falls below $112, the next stop could be the 20-day EMA ($106). A break below this support could pull the pair to $95.
After breaking above $112 the pair gained momentum and reached near the downtrend line. This pushed the RSI into overbought territory, which may have prompted short-term traders to book profits.
Price rebounded from $112, indicating sentiment remains positive and traders are buying on the dip. The pair may rise to $121 and then rise to the downtrend line. On the downside, a break below $112 could sink the pair to the 50-SMA and then to $95.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. As every investment and trading move involves risk, you should conduct your own research when making a decision.