The S&P 500 and the Nasdaq Composite fell to a new year-to-date low last week and closed the week down 1.55% and 3.11%, respectively.
The scenario changed dramatically on October 17 after earnings rose, the season and a sharp policy shift by UK Finance Minister Jeremy Hunt added details to the government’s plan to fix his predecessor’s (Kwasi Kwarteng), which had caused a record drop in the value of the British pound and a near liquidation of UK pension plans.
At the time of writing this report, the Dow Jones advances 1.78%, while the S&P 500 and the Nasdaq present gains of 2.57% and 3.26% respectively. Meanwhile, Bitcoin (BTC) has managed to hold well above its year-to-date low, showing short-term outperformance.
Some analysts expect that Bitcoin may be closer to bottoming out. Twitter trader Alan said that the stochastic indicator on Bitcoin’s monthly chart has reached levels similar to those seen during the 2014 and 2018 bear markets, indicating a likely macroeconomic bottom.
Similarly, LookIntoBitcoin creator Philip Swift said in an interview with Cointelegraph that Bitcoin could be near major cycle lows. Citing various metrics, Swift said Bitcoin may face another two to three months of pain, but should start to outperform in 2023.
As Bitcoin holds above its June low, select altcoins are attracting buyers. Let’s look at the charts of five cryptocurrencies that look interesting in the short term.
BTC/USDT
Bitcoin broke above the 50-day simple moving average (SMA) ($19,689) on Oct. 14, but the higher levels attracted strong selling by bears. That brought the price back below the 20-day EMA ($19.387).
The buyers are trying to defend the immediate support at $18,843 but the recovery could face resistance at the 20-day EMA and then the downtrend line. If the price turns down from the overhead resistance, the possibility of a break below $18.843 increases. Afterwards, the pair could plummet to the $18.125–$17.622 support zone.
To avoid this catastrophe, the bulls will need to force the price above the downtrend line. If they manage to do that, the BTC/USDT pair could rally to $20,500. A break above this resistance could signal the start of a relief 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 rally to $20,000 and then $20,500. The bears can mount strong resistance at this level, but if the bulls dominate them, the recovery could accelerate.
Another possibility is for the price to turn down from the moving averages and drop below the support at $18.843. That could intensify selling and the pair could drop to support at $18.125. The bulls are expected to defend this level vigorously.
MATIC/USDT
Polygon (MATIC) has been attempting to break above the downtrend line for the past few days. Although the bears successfully defended the overhead resistance, they were unable to keep the price down on Oct. 13. This suggests that the bulls are buying the dips as they anticipate an up move.
If the price breaks above the downtrend line, the short-term trend could tip in favor of the bulls. The MATIC/USDT pair could then attempt a rally to $0.94. This level can again act as a strong barrier, but if the bulls break through it, the pair could rally to $1.05.
Alternatively, if the price turns down from the downtrend line again, the bulls may give up and the pair could drop to $0.69. The bears will have to pull the price below this level to initiate a deeper correction to $0.62 and then $0.52.
The downtrend line has seen a tough battle between the bulls and the bears. Although the bears have prevailed, the bulls are not ready to give up. They aggressively bought the drop to $0.71 and are again trying to push the pair above the downtrend line.
The 20-day EMA has flattened out and the RSI is close to the midpoint, which indicates a balance between supply and demand. If the bulls push the price above the 50 SMA, the pair could challenge the downtrend line. A break above this resistance could clear the way for a potential rally to $0.86.
On the other hand, the buyers can exit their position if the price turns down and drops below $0.77. The pair could then slide to $0.71.
HT/USDT
Huobi Token (HT) started a strong move up from $4.07 on Oct. 10 reaching $8.20 on Oct. 14, a move of 101% in five days. This indicates that the bulls are in control.
The strong rally of the past few days pushed the RSI into deep overbought territory, which may have tempted short-term traders to book profits. That started a correction that could reach the 38.2% Fibonacci retracement level of $6.61.
If the price bounces off this support, the bulls will try to resume the up move by pushing the HT/USDT pair above $8.20. If they are successful, the pair could rally to $10.
Contrary to this assumption, if the price drops below $6.64, the pair could drop to the 50% retracement level of $6.12 and then to the 61.8% retracement level of $5.63. A deeper drop could delay the start of the next leg of the up move.
The 4-hour chart shows that the price bounced off the 20-day EMA, but the bulls could not sustain the higher levels. This shows that traders could be taking profits on minor rallies.
The 20 EMA has flattened out and the RSI is just above the midpoint, which indicates that the bullish momentum might be weakening. If the price breaks down and sustains below the 20 EMA, the next stop could be the 50 EMA.
If the bulls want to regain the upper hand, they will have to push the price above $7.65. Afterwards, the pair could retest the overhead resistance at $8.20. A break above this level could start the next leg of the uptrend.
QNT/USDT
Quant (QNT) broke above the overhead resistance at $162 and has continued higher, indicating sustained demand from the bulls.
The rising 20-day EMA ($149) indicates an upside for the buyers, but the RSI in the overbought territory points to a possible short-term correction or minor consolidation. The buyers are expected to defend the drop to the breakout level of $162.
If the price bounces off this level, the QNT/USDT pair could rally to $200 and then attempt a rally to the $230 target objective.
This positive view could be invalidated in the short term if the price turns down and breaks below the 20-day EMA. The pair could then drop to the 50-day SMA ($120).
The pair is facing resistance near $188, but the upsloping moving averages and the RSI in the overbought zone indicate that the path of least resistance is to the upside. If the buyers push the price above $188, the pair could rally to $204.
Conversely, if the price turns down and breaks below the 20-day EMA, it will suggest that traders may be booking profits. That could push the price down to the crucial support at $162. A breakout and close below this support could indicate that the pair may have topped out in the short term.
OKB/USDT
OKB (OKB) has been trading above the moving averages for the past few days and the RSI jumped into the positive territory, indicating an upside for the buyers.
The OKB/USDT pair is facing stiff resistance at the overhead resistance of $17.50, but a minor bright spot is that the bulls have not given ground to the bears. This suggests that the bulls are expecting the pair to rally above the overhead resistance. If that happens, the pair could rally to $20 and then $23.22.
The first support on the downside is at $16.39. If the price turns down and falls below this level, the pair could slide to the moving averages and then to $15.
The price turned down from the overhead resistance at $17.50, but the bulls are trying to defend the 20-day EMA. If the price rises above $17, the probability of a retest of $17.50 increases. Buyers will have to overcome this hurdle to signal a resumption of the uptrend.
The positive momentum can weaken if the price turns down and breaks below the 20-day EMA. The pair could then drop to the 50-day SMA. If this level also breaks, the next stop could be $15.50.
Conversely, if the price bounces off the 50 EMA and rises above the 20 EMA, it will suggest accumulation at lower levels. The bulls can reattempt a rally to $17.50.
The views 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 risk, you should do your own research when making a decision.