The S&P 500 and Nasdaq Composite index suffered their worst weekly performance since June as investors remain concerned that the Federal Reserve will need to continue its aggressive monetary policy to curb inflation and that could lead to a recession in the U.S. united
Bitcoin (BTC) remains closely correlated with the S&P 500 and is on track to fall more than 9% this week. If this correlation continues, it could cause more pain in cryptocurrency markets as Goldman Sachs strategist Sharon Bell warned that aggressive rate hikes could lead to a 26% drop in the S&P 500.
Most expect the Fed to raise rates by 75 basis points at its next meeting on September 20-21, but the FedWatch tool shows an 18% chance of a 100 basis point rate hike. This uncertainty could keep traders on edge, leading to higher short-term volatility.
If the Fed’s rate hike is in line with market expectations, select cryptocurrencies could attract buyers. Let’s study the charts of five cryptocurrencies that are positive in the short term.
Bitcoin recovered from $19,320 on September 16 and recovered above $20,000 on September 17, but the bulls are struggling to hold higher levels. This suggests that bears are active at higher levels.
The 20-day exponential moving average ($20,432) has gradually moved lower and the Relative Strength Index (RSI) is in the negative zone, suggesting that sentiment remains negative and traders are selling near resistance levels generals
If the price continues down and breaks below $19,320, the BTC/USDT pair could drop to $18,510. Buyers are expected to defend this level vigorously.
On the upside, the 50-day simple moving average ($21,605) is the key level to watch. If touches push the price above, the pair could rise to $25,211. A break and close above this resistance could signal the start of a new uptrend.
The 4-hour chart shows that the sellers are trying to stall the rally to the 20 EMA. This indicates that the bears are in no mood to give up their lead. If the weakness persists and the price breaks below $19,320, the pair could fall to $18,510.
Conversely, if the price rises from the current level and breaks above the 20-EMA, the recovery could extend to the 50-SMA. This level may again act as resistance, but if this obstacle is removed, the next stop could be the 61.8% Fibonacci retracement level at $21,470.
Ripple (XRP) has been stuck in a range between $0.30 and $0.39 for many days. The price has reached range resistance and if the bulls break this hurdle, it could signal the start of a new uptrend.
In a range, traders usually buy near support and sell near resistance. If the price drops sharply from the current level and breaks below the moving averages, it will indicate that the XRP/USDT pair may extend its consolidation for a few more days.
While the moving averages are crossing over, the RSI has jumped into positive territory, indicating that the bulls have a slight lead. If buyers drive and hold the price above $0.39, the pair could rise to $0.48.
The pair rallied sharply from $0.32 to $0.39, indicating strong buying by the bulls. The 20-EMA has risen and the RSI is in the positive zone, suggesting that the path of least resistance is to the upside.
If the price continues higher and breaks above $0.39, the bullish momentum could pick up and the pair could rally to $0.41. This level may act as resistance, but if buyers reverse the $0.39 level at support, the upward move could resume.
Chainlink (LINK) has been stuck within a wide range between $5.50 and $9.50 in recent weeks, indicating that buyers are trying to form a bottom. The bulls pushed the price above the moving averages and the RSI jumped into positive territory, indicating that the positive momentum may be improving.
There is minor resistance at $8.30 and if the touches push the price above, the LINK/USDT pair could regain the stiff resistance at $9.50. This level is likely to attract aggressive selling by bears, but if the bulls break through the barrier, it could signal the start of a new uptrend.
Moving averages are the important support to watch on the downside because if they break, selling pressure can increase. This could start a decline to $7 and then $6.20.
Buyers try to defend the moving averages on the 4-hour chart. This could start a rally towards the overhead resistance at $8.20. If the price breaks above this general resistance, the pair could rise to $9.
If the bulls fail to push the price above $8.20, the bears can imagine their chances and try to sink the pair below the moving averages. This may tilt the advantage in favor of the bears. The pair could drop first to $7.50 and then to $7.
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Bears pulled EOS below the 50-day SMA ($1.44) on September 15, but failed to break the support at $1.34. This suggests that bulls are buying dips and trying to form a low near $1.34.
A minor negative is that bulls are facing strong resistance at the 20-day EMA ($1.50). This indicates that the bears have not given up and are trying to wrest control. This fight between the bulls and the bears is likely to be resolved with a sharp breakout.
If the price breaks above the 20-day EMA, the bullish momentum could pick up and the EOS/USDT pair could rally to $1.86. Alternatively, if the price declines and breaks below $1.34, the pair could drop to $1.24. A break below this support could sink the pair to $1.
The rally faltered near $1.50, indicating that bears are still selling on the upside. Bears will try to consolidate their advantage further by taking the price below the strong support at $1.34, but this may not be so easy.
Buyers have defended the $1.34 level three times and will try again. If the price bounces back to $1.34, the bulls may again attempt a rally above the $1.50 overhead resistance. If they manage to do that, a rally to $1.70 and later to $1.86 is possible.
Tezos (XTZ) broke below the 20-day EMA ($1.57) on September 13, but the bears were unable to pull the price to the symmetrical triangle support line. This indicates that buyers are accumulating dips and are not waiting for a deeper correction to make an entry. This increases the likelihood of a short-term recovery.
If the price breaks above the 20-day EMA, the XTZ/USDT pair could move up to the 50-day SMA ($1.66). This level has acted as strong resistance on two previous occasions, so it is an important level to watch. If the bulls break this barrier, the pair could attempt a rally to the triangle resistance line.
A break above the triangle will indicate a possible trend change. The pair could then rise to $2 and later to $2.36.
Meanwhile, the Bears likely have other plans. They will try to slow the recovery in the moving averages. If the price breaks down from the current level and falls below the $1.50-$1.40 support zone, the June low at $1.20 may be revisited.
The 4-hour chart shows that the bulls defended the support at $1.50 and pushed the price above the downtrend line, but were unable to sustain the higher levels. If the bears push the price below $1.50, the pair could drop to $1.40.
On the other hand, if the price retraces the $1.50 support, it will suggest that the lower levels continue to attract buyers. The bulls will then try to push the price above the moving averages and challenge the resistance at $1.62. If this level breaks, the upside move could reach $1.70.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and business move involves risk, you should do your own research when making a decision.