The S&P 500 and Nasdaq Composite dropped to a new year-to-date low last week and closed the week with a loss of 1.55% and 3.11%, respectively.
The scenario changed drastically on October 17 after earnings surged, the season surged, and a sharp policy reversal from British Chancellor of the Exchequer Jeremy Hunt added details to the government’s plan to reform his predecessor’s financial package (Kwasi Quarting), which led to a record drop in the value of the pound and a near UK retirement plans liquidation.
At the time of writing, the Dow is up 1.78%, while the S&P 500 and Nasdaq are up 2.57% and 3.26%. Meanwhile, Bitcoin (BTC) has managed to stay well above its year-to-date low, indicating an outperformance in the short term.
Some analysts expect bitcoin to be closer to the bottom. Twitter trader Alan said that the stochastics on Bitcoin’s monthly chart have reached levels similar to those seen during the 2014 and 2018 bear markets, indicating the possibility of an overall bottom.
Similarly, Philip Swift, creator of LookIntoBitcoin, said in an interview with Cointelegraph that bitcoin could be close to major cycle lows. Citing various metrics, Swift said that Bitcoin may be in pain for another 2-3 months, but that it should start outperforming in 2023.
As Bitcoin continues above the June lows, select altcoins are attracting buyers. Let’s take a look at the charts of five cryptocurrencies that look interesting in the near term.
BTC / USDT
Bitcoin broke above the 50-day simple moving average (SMA) ($19,689) on October 14, but higher levels attracted heavy selling by the bears. This pulled the price below the 20-day exponential moving average ($19,387).
Buyers are trying to defend the immediate support at $18,843 but the recovery could face resistance at the 20-day moving average and then at the downtrend line. If the price breaks below the general resistance, the probability of a break below $18,843 increases. After that, the pair could decline to a support zone between $18,125 and $17.622.
To avoid this disaster, the bulls will have to force the price above the downtrend line. If they manage to do so, the BTC/USDT pair could rise to $20,500. A break above this resistance could signal the start of a rally to $22,800.
The pair has been stuck between $18,125 and $20,500 for some time. If the bulls push the price above the moving averages, the pair could rise to $20,000 and then to $20,500. The bears may create a strong resistance at this level but if they are overtaken by the bulls, the recovery could pick up quickly.
Another possibility is that the price breaks down from the moving averages and drops below the support at $18,843. This could lead to an intensification of selling and the pair may then move down to the $18,125 support level. Bulls are expected to defend this level aggressively.
Matic / USDT
Polygon (MATIC) has been trying to rise above the descending trend line for the past few days. Although the bears successfully defended the general resistance, they were unable to keep the price lower on October 13th. This indicates that the bulls are buying the dips as they anticipate a higher move.
If the price rises above the downtrend line, the short-term trend may tilt in favor of the bulls. The MATIC/USDT pair could then try to rise to $0.94. This level may once again act as a strong barrier but if the bulls overcome it, the pair could rise to $1.05.
Alternatively, if the price drops again from the downtrend line, the bulls may give up and the pair may then drop to $0.69. The bears will have to pull the price below this level to start a deeper correction to $0.62 and then to $0.52.
The downtrend line is witnessing a tough battle between the bulls and the bears. Although the bears have come out on top, the bulls are not ready to give up. They bought aggressively lower to $0.71 and are once again trying to push the pair above the downtrend line.
The 20-EMA has flattened and the RSI is near its midpoint, indicating a balance between supply and demand. If the bulls push the price above the 50-SMA, the pair may challenge the downtrend line. A break above this resistance could pave the way for a potential rally to $0.86.
On the other hand, buyers may save their positions if the price drops and falls below $0.77. The pair could then slide to $0.71.
HT / USDT
Huobi Token (HT) started a strong upward move from $4.07 on Oct 10 and reached $8.20 on Oct 14, a 101% move within five days. This indicates that the bulls are in control.
The sharp rise in the past few days has pushed the RSI into the deep overbought territory, which could tempt traders in the short term to take profits. It started a correction that could reach the 38.2% Fib retracement level at $6.61.
If the price bounces off this support, the bulls will try to resume the bullish move by pushing HT/USDT above $8.20. If they succeed, the pair could rise to $10.
Contrary to this assumption, if the price drops below $6.64, the pair could drop to the 50% retracement level at $6.12 and then to the 61.8% retracement level at $5.63. A deeper decline may delay the start of the next phase of the upward movement.
The 4 hour chart shows that the price bounced off the 20-EMA but the bulls were unable to sustain the higher levels. This indicates that traders may lock in profits on small rallies.
The 20-EMA has flattened and the RSI is just above its mid-point, indicating that the bullish momentum may be weakening. If the price breaks and continues below the 20-EMA, the next stop may be the 50-SMA.
If the bulls want to regain the upper hand, they will have to push the price above $7.65. The pair could then retest the general resistance at $8.20. A break above this level could start the next phase of the uptrend.
Related: The Finance Minister said India aims to develop standard operating procedures for cryptocurrencies during the G20 Presidency
QNT / USDT
Quantum (QNT) broke the upper resistance at $162 and continued higher, indicating continued demand from the bulls.
The bullish 20-day EMA ($149) points to an advantage for buyers, but the overbought RSI indicates the possibility of a slight correction or consolidation in the near term. Buyers are expected to defend a decline to the breakout level of $162.
If the price bounces off this level, the QNT/USDT pair may rise to $200 and later try to move higher to the target target at $230.
This positive outlook may be canceled in the near term if the price drops and breaks below the 20 day EMA. After that, the pair may drop to the 50-day simple moving average ($120).
The pair is facing resistance near $188, but the bullish moving averages and the overbought RSI indicate that the path of least resistance is to the upside. If buyers push the price above $188, the pair could rise to $204.
Conversely, if the price drops and breaks below the 20-EMA, this will indicate that traders may be booking profits. This could push the price lower to the crucial support level of $162. A breakout and a close below this support may indicate that the pair may have topped in the near term.
OKB / USDT
OKB (OKB) has been trading above the moving averages in the past few days and the RSI has jumped into positive territory, indicating the buyers advantage.
The OKB/USDT pair faces heavy resistance at the upper resistance at $17.50, but the small positive is that the bulls have not ceded ground to the bears. This indicates that the bulls are expecting the pair to rise above the general resistance level. If that happens, the pair could rise to $20 and later to $23.22.
The first support on the downside is $16.39. If the price goes down and breaks below this level, the pair may slide to the moving averages and then to $15.
The price dropped from the upper resistance at $17.50 but the bulls are trying to defend the 20-EMA. If the price rises above $17, the probability of a retest of $17.50 increases. Buyers will have to cross this hurdle to signal a resumption of the uptrend.
The positive momentum may weaken if the price drops and breaks below the 20-EMA. After that, the pair may go down to the 50-SMA. If this level also breaks, the next stop could be $15.50.
Conversely, if the price bounces from the 50-SMA and rises above the 20-EMA, this will indicate a build-up at lower levels. Then the bulls may try to rise again to $17.50.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risks, you should do your own research when making a decision.
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