Crypto traders shift focus to altcoins as Bitcoin price consolidates
It has been difficult for Bitcoin (BTC) and the cryptocurrency markets to start a strong sustained recovery while the US dollar is near its multi-year high and the US stock markets are near their June lows. This shows that sentiment remains negative and traders are not interested in taking risks in their portfolios.
US stock markets fell sharply on October 7 following the release of September’s non-farm payrolls data, but managed marginal gains for the week. The S&P 500 rose 1.5% and the Nasdaq Composite rose 0.7% last week. Meanwhile, Bitcoin is on track to end the week with marginal gains of around 2%.
In recent days, Bitcoin has managed to avoid a collapse even as the US stock markets were trampled. This is the first indication that selling pressure may ease and traders may not be willing to part with their holdings at lower levels.
But for a sustained recovery, Bitcoin will need some support from the return of risk-on sentiment. Until then, volatile range-bound action is likely to continue, with certain altcoins offering trading opportunities. Let’s examine the charts of five cryptocurrencies that look interesting in the short term.
BTC/USDT
Bitcoin is struggling to stay above the 50-day simple moving average ($19,961), indicating that the bears have not yet given up. The sellers pulled the price below the 20-day exponential moving average ($19,628) on October 7, but they could not extend the decline to the $18,626 support. This suggests that bulls are buying on dips and trying to form a higher low in the short term.
The flat 20-day EMA and the relative strength index (RSI) just below the midpoint suggest a balance between supply and demand. Buyers must push and sustain the price above the downtrend line to gain the upper hand. The BTC/USDT pair could then rise to $22,800, where the bears could once again mount a strong defense.
On the downside, the bears may find it difficult to lower the price below the zone between $18,626 and $17,622 considering that the bulls are expected to defend the zone with all their might. Nevertheless, if the zone breaks, the pair could start the next leg of the downtrend. The pair could then fall to $15,000.
The pair’s failure to break above the $20,475 resistance may have tempted short-term traders to book profits, which dragged the price below the moving average. A less positive, however, is that the bulls are buying the decline to the uptrend line.
If the price breaks above the moving averages, the pair could rise again to $20,475. The bulls need to push and sustain the price above this resistance to complete an ascending triangle pattern. If that happens, the pair could rise to the pattern target of $22,825.
This bullish pattern will be canceled on a break and close below the uptrend line. If that were to happen, selling could intensify and the pair could slide to the strong support at $18,125.
XRP/USDT
XRP bounced off the 20-day EMA ($0.47) on October 3, indicating that lower levels are attracting buyers. The uptrending 20-day EMA and RSI near the overbought zone suggest that bulls have the upper hand.
If the price rises and breaks above the overhead resistance at $0.56, the XRP/USDT pair could rise to $0.66. This level could again pose a strong challenge, but if bulls overcome it, the upside could extend to $0.80.
Instead, if the price goes down from $0.56, the bears will again pull the pair to the 20-day EMA. If this support gives way, the pair could fall to the breakout level of $0.41. A strong pullback from this level could keep the price range between $0.41 and $0.56 for some time.
The pair has been gradually climbing towards the overhead resistance at $0.56. Both moving averages are sloping up gradually and the RSI is in positive territory, indicating that buyers have the advantage.
The pair rejected from $0.53, but the bulls defended the 20-day EMA. If buyers drive the price above the $0.53 to $0.56 resistance zone, the rally could accelerate.
A break and close below the 20-day EMA will be the first sign that the bulls may lose their grip. The pair could then fall to the 50-day SMA and later to $0.44.
UNI/USDT
Uniswap (UNI) has been trading above the moving averages, indicating that the bulls are trying to resume their recovery. This is one of the reasons for including it in this analysis.
The price was knocked down from the overhead resistance at $7, but the bulls are trying to stop the correction at the 20-day EMA ($6.42). If the price pulls back from the current level of strength, it will indicate that buyers are using the falls to accumulate.
The bulls will then again attempt to drive the price above the overlying resistance zone between $7 and $7.36. If they succeed, the UNI/USDT pair could rise to $8.67. Conversely, if the price declines and breaks below $6, the pair could fall to the strong support at $5.66.
The pair turned sharply down from the $7 overhead resistance and broke below the moving average. This suggests that the bears have the upper hand in the short term. If the price breaks down from the moving averages, selling may pick up and the pair may fall to $6.20 and later to $6.
To avoid this negative occurrence, the bulls need to push and maintain the price above the moving averages. If that happens, the pair could again test the stiff resistance at $7. If this obstacle is removed, the pair could rise to $7.36.
Related: Top 3 Reasons Why Bitcoin Hash Rate Continues to Achieve New All-Time Highs
QNT/USDT
Quant (QNT) completed the inverse head and shoulders pattern on September 27th and turned its neck to support on a retest on October 2nd. The rally resumed after the price broke above $147 on October 8, indicating that buyers are in control.
The rally over the past few days has sent the RSI into overbought territory, and the QNT/USDT pair is near the $162 overhead resistance. This could spell trouble for the bulls, but the dips are likely to be bought.
If the price retraces from the 20-day EMA, it would indicate that the sentiment has shifted from selling on the rally to buying on the dip. That could increase the likelihood of a break above $162. If that happens, the pair could rise to $200 and then to the pattern target of $230.
If bears want to invalidate this bullish view, they need to pull the price back below the neckline and the 50-day SMA ($112).
The pair has witnessed a strong rally since breaking out of $147. Vertical rallies are rarely sustainable and often result in a consolidation or correction. In this case, the price may fall to the 20-day EMA, which is an important support for the bulls to defend.
If price bounces off this support, it would indicate that bulls continue to view the declines as a buying opportunity. A break and close above $162 could start the next leg of the up move.
Alternatively, if the price turns sharply down from today’s level and breaks below the 20-day EMA, it would indicate that the bulls may rush to the exit. That could lower the pair to $130.
EGLD/USDT
Elrond (EGLD) broke above the moving averages on October 3 and the 20-day EMA ($51) has started to emerge, indicating a potential near-term trend change. This is why it is highlighted in this analysis.
The EGLD/USDT pair has faced resistance near $57, but a positive sign is that the bulls have not given up much ground. This suggests that traders are not dumping their positions because they expect the recovery to resume.
If bulls lift the price above $57, the pair could gain momentum and increase to $62 and then to $70.
On the other hand, if the price goes down from $57 and plunges below $53, the bears will pull the pair to the moving averages. If this support gives way, the pair could fall to the $47-to-$45 zone.
After the sharp rise from $47 to $57, the pair has corrected in a descending channel pattern. If buyers push the price above the channel, the pair could retest the resistance at $57. A break above this level may indicate a resumption of the uptrend.
Conversely, if the price goes down and breaks below the 20-day EMA, it would suggest that the pair may spend some more time inside the channel. The bears need to drop the price below the channel to open the doors for a possible decline to $50.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade involves risk, you should do your own research when making a decision.
