The United States equity market rallied strongly last week, ending a three-week losing streak. S&P 500 purple 3.65% last week while the Nasdaq Composite rose 4.14%. Continuing its close correlation with the US equity market, Bitcoin (BTC) also made a comeback and tried to end the week with a profit of more than 7%.
A clear rally in the stock market and the cryptocurrency market shows signs of a bottoming formation but it may be too early to predict the start of a new bull movement. Equity markets may remain on edge ahead of the release of US inflation data on September 13 and the Federal Reserve meeting on September 20-21.
Along with taking cues from the equity market, the cryptocurrency space has its own important events to look forward to. Both Ethereum’s Merge and Cardano (THERE IS) Vasil hard fork scheduled in the next few days may increase volatility in some cryptocurrencies.
Although wave markets increase risk, they can also provide short-term trading opportunities for agile traders. Let’s study the chart of five cryptocurrencies that look interesting in the near term.
Bitcoin rose above its 20-day exponential moving average ($20,662) on September 9, which is the first indication that selling pressure may be easing. Bears are trying to prevent a recovery at the 50-day moving average ($21,946) but the positive sign is that the bulls have not given up yet.
The 20-day EMA has started gradually and the relative strength index (RSI) is in positive territory indicating that the path of least resistance is up. If the bulls push the price above the 50-day SMA, the BTC/USDT pair could rally to a stiff overhead resistance at $25,211. Bears are expected to defend this level with passion.
Another possibility is that the price drops from the 50-day SMA. If this happens, the pair may drop to the 20-day EMA. This is an important level to watch out for because a break and close below it could open the door to a drop of $18,626. Alternatively, if the price rebounds from the 20-day EMA, it will increase the probability of a break above the 50-day SMA.
The pair gained momentum after rising above the $19,520 breakdown level. The rally is clearly pushing the RSI into overbought territory, suggesting a consolidation or minor correction. Buyers are facing a stiff challenge near $22,000 but have not yet given ground to the bears. This shows that every little dip is being bought.
If the bulls push the price above $22,000, the pair could quickly rally to $23,500 where the bears could again try to prevent the upward movement.
Contrary to this assumption, if the price goes down and breaks below the 20-EMA, the pair can drop to $20,576. A break below this level would suggest that the pair could consolidate in a large range between $22,000 and $18,626 for some time.
Cosmos (ATOM) broke above the $13.45 overhead resistance on September 8, indicating demand at a higher level. The next stiff resistance is $20.30 which gives room for a rally.
However, before that, bears will try to pull the price below the breakout level of $13.45. This is an important level to watch out for as a break and close below it will indicate that a recent breakout could be a bull trap.
On the other hand, if the price goes up from the current level or bounces off $13.45, it will suggest that the bulls are in control and buy at every dip. If the bulls push the price above $17.20, the upward movement could pick up momentum and reach $20.30.
The 4-hour chart shows that the ATOM/USDT pair is rising after breaking above the overhead resistance at $13.45. That pushed the RSI into overbought territory and started a correction but the positive sign is that the bulls haven’t given up yet.
If the price rebounds from the current level, the possibility of a break above $17.20 increases. If that happens, the up move could continue and the pair could rally towards $20.30.
This positive view may be invalidated in the near term if the price continues to decline and fall below the 20-EMA. If that happens, the pair could drop to the 50% Fibonacci retracement level of $14.36.
ApeCoin (APE) rebounded strongly from support at $4.17, indicating aggressive buying at lower levels. This suggests that the corrective phase may be over, making it an attractive candidate for the short term.
Buyers pushed the price above the 20-day EMA ($5) on September 9 and the APE/USDT pair formed a daily Doji candlestick pattern on September 10. to SMA 50 days ($5.85). The Bears can try to prevent a recovery at this level.
If the price drops from the current level but rebounds to the 20-day EMA, it will suggest that sentiment has turned positive and traders are buying on dips. The bulls will again try to push the price above the 50-day SMA. If they do, the pair could rise to overhead resistance at $7.80.
This positive view may be invalidated in the near term if the price breaks down and falls below the 20-day EMA. In that case, the pair could drop to $4.17.
The 20-EMA on the 4-hour chart has started and the RSI has moved up into overbought territory. This shows that the bulls have the upper hand but a short-term pullback is possible.
If the price drops from the current level but rebounds to $5.30, it will strongly suggest a lower level. The bulls will then make another attempt to push the price above $5.83 and extend the recovery to $6.44.
Alternatively, if the price falls and falls below the 20-EMA, the advantage may be tilted to the bear.
Chiliz (CHZ) broke above the 20-day EMA ($0.20) on September 9, which is the first indication that the corrective phase may be over. Hence, this token entered the list.
Bears tried to pull the price back below the 20-day EMA on September 10, but the bulls persisted. Buyers are trying to push the price towards the overhead resistance at $0.26 but the upward move may face strong headwinds near $0.23.
If the price declines but does not fall below the 20-day EMA, it will increase the chance of a rally to $0.26. Contrary to this assumption, if the price goes down and breaks below $0.20, it will suggest that the bear is active at a higher level. That can pull the price to the 50-day SMA ($0.18).
The 4-hour chart shows that the bears are defending the downtrend line. If the price drops from the current level but rebounds from the moving average, it will suggest that the bulls are trying to make a comeback.
Buyers will again try to push the price above the downtrend line. If they succeed, the pair can start the march north to $0.23 and later to $0.26.
Alternatively, if the price falls below $0.20, it will indicate that the pair may remain in a falling wedge pattern. That can pull the price down to $0.18.
Amount (QNT) did not break below the strong support at $ 87.60, indicating that positive sentiment and bulls buy in dips. That is the reason for its choice.
A sharp rebound from $87.60 broke above the 20-day EMA ($100) on September 8, which is the first indication that the corrective phase may be over. Bears posed a strong challenge near the 50-day SMA ($105) but could not put the price below the 20-day EMA.
This indicates that sentiment has turned positive and bulls are buying on dips. Buyers pushed the QNT/USDT pair above the 50-day SMA on September 11. If the bulls hold higher levels, the pair could rise to $117 and then to $124. A break above this level could open the door for a rally to $130.
This bullish view can be invalidated if the price breaks down and falls below the 20-day EMA. If this happens, the pair could drop to a strong support at $87.60.
The 4-hour chart shows that the pair is rebounding from support at $87.60. Bears pose a strong challenge near $108 but a positive sign is that bulls are buying down to the 20-EMA. This indicates that traders see dips as buying opportunities.
The buyers continued the recovery by pushing the price above the overhead resistance at $108. The pair was able to rally to $113 and later to $117. On the contrary, if the price goes down and falls below the 20-EMA, the pair can go down to the 50-SMA.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, so you should do your own research when making a decision.