Last week’s sell-off in the US stock market marked the third straight week of market-wide declines. The Nasdaq Composite has fallen for his sixth consecutive day for the first time since 2019. The market’s negative reaction to his seemingly positive August jobs report suggests that traders are nervous about his Fed’s future actions and their impact on the economy.
US Stock Market Weakness Pulls Bitcoin Down (Bitcoin) broke below $20,000 on Sept. 2 and the bears held the price below this level over the weekend.this pulled Bitcoin has just under 39% market dominance September 4, the lowest level since June 2018, according to CoinMarketCap data.
Sentiment remains negative and bottoming out is difficult, but investors who believe in the long-term prospects of cryptocurrencies are gradually building positions at lower levels rather than trying to bottom out. Opportunities can be taken advantage of. However, investors can avoid pushing prices higher during a bear market rally and consider buying when price falls to strong support levels.
If Bitcoin recovers, some altcoins could rise. Let’s examine the charts of the top 5 cryptocurrencies that look strong on the charts.
Bitcoin has been trading in a tight range between $19,520 and $20,576 for the past few days, suggesting a balance between buyers and sellers in the short term. The bulls have been buying on the downside, but have not been able to overcome the selling at the high.
The 20-day exponential moving average ($20,863) on the downtrend and the Relative Strength Index (RSI) in negative territory show the sellers in favor. If the bears break below $19,520, the BTC/USDT pair can drop to the strong support zone between $18,910 and $18,626.
This zone is likely to attract strong buying by the bulls. The bears should sink the price below $17,622 to signal a resumption of the downtrend.
Meanwhile, buyers should push the price above the 20-day EMA to show that the bears are losing momentum. After that, the pair can rise to his 50-day simple moving average ($22,271).
The price has rebounded from the strong support near $19,520, but the bears are trying to slow the recovery at the moving averages. This shows that the bears are selling after every minor rally. The pair could resume the next leg of the downtrend if the bears break below $19,520.
Defying this assumption, if the bulls push the price above the moving averages, the pair could attempt a rally to the $20,576 range resistance. Buyers need to clear this hurdle to indicate a potential trend change in the short term.
Cardano (ADA) is consolidating but trying to break above the moving averages. This indicates demand at lower levels and increases the potential for an upside. This is the reason for the choice.
The 20-day EMA ($0.47) has flattened out and the RSI has jumped into positive territory, indicating that selling pressure is easing. The ADA/USDT pair could rise to the downtrend line if the buyer sustains the price above his 50-day SMA ($0.50).
This level can again act as a strong resistance, but if the bulls overcome this barrier, the pair can move to $0.70.
This positive view could be negated in the short term if the price turns down from the current levels and breaks below the 20-day EMA. If so, the pair can again drop to his strong support at $0.40.
The 20-EMA on the 4-hour chart is trending upwards and the RSI is moving up into overbought territory. This indicates that the bull market is dominating, but minor corrections or consolidations are possible in the short term.
If buyers can sustain the price above $0.48 or the 20-EMA, it suggests that sentiment will change from selling on the upside to buying on the downside. It can push the price to $0.54 and then to the downtrend line.
To invalidate this positive view, the bears need to sink the price below $0.48. If so, the pair can drop to $0.44 and then to $0.42.
universe (atom) has not lost momentum in recent days, trading near the overhead resistance of $13.45. This shows that traders are not closing their positions because they expect the price to rise. This is the reason for its inclusion in this list.
The ATOM/USDT pair broke below the 50-day SMA ($11.08) on Aug. 29, but the bulls bought at lower levels. It started a rebound and hit the overhead resistance at $13.45. The gradual rise of the moving averages and the positive territory of the RSI indicate that the path of least resistance is heading upwards.
If buyers push the price above $13.45, the pair will gain momentum and may move higher to $15.30 and even $20. This positive view could be invalidated if the price falls sharply and breaks below the $10 psychological support.
The 20-EMA is trending up and the bulls are buying a drop to this support. This suggests positive sentiment in the short term. The bulls will try to push the price to the overhead resistance of $13.45. This is an important level to pay attention to. Because breaking and closing above it could indicate a resumption of the uptrend.
Conversely, if the price turns down from the current level or overhead resistance and breaks below the 20-EMA, it suggests that the bears are active at higher levels. After that, it can remain range bound between $10 and $13.45 for some time.
Filecoin (FIL) traded in a tight range from August 27th to September 2nd, but turned upward on September 3rd.
The FIL/USDT pair made a sharp move up, breaking the 20-day EMA ($6.39) on Sept. 3. However, the bears are not likely to surrender so easily, offering a strong challenge near the 50-day SMA ($6.92).
The bears pulled the price back below the 20-day EMA on Sept. 4. If the price breaks below this level, the pair can fall to $5.50. Conversely, if the price rises from current levels and crosses the 50-day SMA, it suggests strong buying on the downside. The pair can then move up to $9 and then to $9.50.
The pair has turned down from the overhead resistance zone between $6.80 and $6.60, but the small positive is that the bulls have not allowed a break below the 20-EMA. If the price bounces off the current levels, it will likely close above the zone.
In that case, the pair completes a reversed head and shoulders pattern. The pair can then pick up momentum and rally toward her pattern target of $7.6 before moving up to $8.30.
This positive view may be invalidated in the short term if the price closes below the 20-EMA. After that, the pair may fall to the strong support at $5.50.
Ios Even in the mayhem, it is on the list because it has stayed above the moving averages. This points to short-term outperformance and is likely to move higher if sentiment in the crypto sector improves.
The EOS/USDT pair completed a rounding bottom pattern on Aug. 21, but the bulls failed to sustain higher levels. The bears pulled the price back below his breakout level on Aug. 28, indicating strong selling in the rally.
A minor plus is that buyers have aggressively bought the drop to the 50-day SMA ($1.33). The 20-day EMA ($1.48) has flattened out and the RSI is near the midpoint, indicating that buyers and sellers are in balance.
The balance could tip in their favor if the bulls push and sustain the price above $1.60. After that, the pair can rise to the overhead resistance near $2. Alternatively, a breakout of the 50-day SMA and a close can send the price to $1.15.
The bears are selling the rebound near $1.60 and trying to break below the breakout level of $1.46. The pair can then drop to the uptrend line. This level has acted as a strong support three times in the past, so the bulls will try to defend it again.
If the price rebounds from the uptrend line and breaks out above $1.60, the currency pair could gain momentum and move up to $1.80 and then to $2. Conversely, a close break below the uptrend line suggests that the short-term uptrend may have ended. After that, the pair could fall to $1.24.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. All investment and trading movements involve risk. You should do your own research when making a decision.