Watch these 5 cryptocurrencies for a potential price rally next week
Traders dumped risky assets after the crisis and the failure of Silicon Valley Bank (SVB). The S&P 500 plunged 4.55% while Bitcoin (BTC) is down around 9% this week.
The collapse of SVB led to a crisis in the crypto space with USD Coin (USDC) losing its link to the US dollar on reports that $3.3 billion of Circle’s $40 billion USDC reserves were held at SVB. After trading near $0.87 on March 11, USDC has climbed above $0.96 at press time.
SVB’s failure has added to near-term uncertainty with investors watching closely for signs of contagion to other regional banks across the US
In times of uncertainty, it is best to stay on the sidelines. But if there is no domino effect after SVB’s debacle, select cryptocurrencies could start the recovery. The cryptocurrencies selected in the article are all trading above the 200-day simple moving average, a key level monitored by long-term investors to determine whether the asset is in a bull or bear phase.
Let’s study the charts of Bitcoin and the four altcoins that could outperform if the sector sees a recovery in the next few days.
BTC price
Bitcoin has corrected back to the 200-day SMA ($20,389). Buyers are expected to defend the level with all their might because a break below it could intensify selling.
On the upside, the 20-day exponential moving average ($22,042) is likely to act as a major obstacle. If the price breaks sharply from the 20-day EMA, the BTC/USDT pair may retest the support at the 200-day SMA. If this level breaks, the pair could slide to $18,400 and then to $16,300.
If bulls want to prevent the decline, they need to drive the price above the 20-day EMA. If they manage to do so, the pair could take off and soar towards the overhead resistance of $25,250.
The 4-hour chart shows that the bulls are trying to start a recovery from $19,550, but the bears are aggressively defending the 20-EMA. If the price declines from today’s level, the bears will again try to lower the pair below $19,950. If successful, the pair could fall to $18,400.
Conversely, if the price emerges and breaks above the 20-EMA, it would indicate that the short-term selling pressure may be easing. It could start a recovery to $21,480 where the bears will once again pose a strong challenge. If this level scales, the pair could reach $22,800.
ETH/USDT
Ether (ETH) fell below the 200-day SMA ($1,421) on March 10, but the long tail of today’s candlestick shows solid buying at lower levels.
The recovery faces resistance near $1,461. If the price breaks down from today’s level and reaches the 200-day SMA, it will signal that the bears are selling on a shallow bounce. That would increase the likelihood of a drop below $1,352. The ETH/USDT pair could then slide to $1100.
If bulls want to prevent the decline, they need to push the price above the 20-day EMA ($1,548). If they do, the pair could rise to $1,743 where the bears could once again erect a strong barrier. A break above this level would open the door for a possible rise to $2,000.
The 4-hour chart shows that the pair is trying to bounce back. The 20-EMA is flattening and the relative strength index (RSI) is just below the midpoint, indicating a balance between supply and demand.
This balance will tip in favor of the buyers if they push and sustain the price above $1500. If they do, the support rally could reach $1,600. On the other hand, if the price goes down and breaks below the uptrend line, the advantage can tilt in favor of the bears. The pair may then retest the strong support at $1,352.
MATIC/USDT
Polygon (MATIC) corrected sharply from $1.56 on February 18th and reached the 200-day SMA ($0.94) on March 10th. The long tail on today’s candlestick shows that the bulls are tenaciously defending the level.
The bulls will try to push the price to the 20-day EMA ($1.15) where the bears are likely to mount a strong defense. If the price declines from this level, it would indicate that sentiment remains negative and traders are selling on the rally.
That could raise the prospect of a drop below the 200-day SMA. If that happens, the MATIC/USDT pair could drop to $0.69.
Conversely, if buyers drive the price above the 20-day EMA, it would indicate that the bulls are back in the driver’s seat. The pair could then rise to the overhead resistance at $1.30.
The recovery from $0.94 has reached the 20-EMA. This is an important level to watch because if the price stays above it, the pair could rise to $1.15.
This level could again act as a strong resistance, but if bulls stop the next decline above $1.05, it would indicate that the downtrend may be over. That could open the gates for a possible rise to $1.30.
This bullish view will be invalidated in the short term if the price goes down and breaks below the $0.94 support.
Related: US Treasury Secretary Janet Yellen is working on SVB collapse, not on rescue operations: Report
TONS/USDT
While most major cryptocurrencies have fallen to or below their 200-day SMA, Toncoin (TON) remains well above that level. This suggests that traders are not rushing to the exit.
The TON/USDT pair has formed a symmetrical triangle pattern near the local high. The price action inside the triangle is random and volatile.
Usually the triangle acts as a continuation pattern. It means that the trend that was in effect before the formation of the setup resumes. In this case, if buyers kick the price above the resistance line in the triangle, the pair could start a move towards $2.90.
Conversely, if the price continues lower and plunges below the triangle and the 200-day SMA ($1.90), it would indicate that the bears are in command. That could pull the price towards $1.30. Such a move would indicate that the triangle behaved as a reversal setup.
The descending 20-EMA and RSI in the negative territory on the 4-hour chart show that the bears have the upper hand. If the price declines from today’s level and breaks below $2.18, the fall is likely to extend to $2.
Conversely, if bulls drive and sustain the price above the 20-EMA, it would indicate that bulls are attempting a comeback. The pair could then rise to $2.45 where the bears could mount a strong defense. If this level is crossed, the bulls try to pierce the triangle near $2.50.
OKB/USDT
OKB (OKB) is in a corrective phase, but a minor positive in favor of the bulls is that it is well above its 200-day SMA ($26).
The next support on the downside is the 50% Fibonacci retracement level at $36.13 and then the 61.8% retracement level at $30.76. The Bulls will likely protect this zone with all their might.
If the price emerges from this zone, the OKB/USDT pair may rise to the 20-day EMA ($45.48). This is an important level to keep an eye on because a break and close above it will signal that the corrective phase may be over.
On the other hand, if the price falls below $30.76, it would indicate that traders are rushing to the exit. The pair may then plunge to the 200-day SMA.
The descending 20-EMA and RSI in the negative territory on the 4-hour chart suggest that the bears have the upper hand. There is a minor support near $37.50, but if it gives way, the pair could reach $36.13.
On the contrary, if the price emerges and breaks above the 20-EMA, it will indicate that bulls are trying to regain control. The pair could then rise to $44.35. This is an important resistance for the bears to guard because if it is taken out, the price could reach $50.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
