Certain altcoins like FLOW, THETA, QNT, and MKR could rally if Bitcoin breaks above the stiff overhead resistance at $24,668.
US employment data for August 5 beat market expectations, indicating that inflation has not cooled. The strong numbers reduce the chance that the US Federal Reserve will slow down its aggressive pace of rate hikes. Following the release, the probability of a 75 basis point hike in September has risen to 68%.according to data from CME Group.
However, analysts at Fundstrat Global Advisors have a different opinion. They note that on three of the six occasions, the S&P 500 has bottomed out six months before the Fed’s latest rate hike. Therefore, the company expects the S&P 500 to see a strong rally to 4,800 in the second half of the year.
If the close correlation between the equity markets and the crypto markets holds, the recovery in the crypto markets may have some more room to run. On-chain monitoring resource Material Indicators said in a Twitter update on Aug. 5 that if Bitcoin (BTC) rises above $25,000, there is no major resistance until the $26,000 to $28,000 range.
Could Bitcoin break above overhead resistance and extend its rally, dragging certain altcoins higher? Let’s study the charts of the top 5 cryptocurrencies that could outperform in the short term.
BTC/USDT
Bitcoin has been trading near the 20-day exponential moving average ($22,719) for the past few days, indicating a tough battle between the bulls and the bears.. Although the bulls have held the level, they have not been able to make a strong rebound out of it. This indicates a lack of demand at higher levels.
Both moving averages have flattened out and the RSI is just above the midpoint, which indicates a balance between buyers and sellers. The edge could tip in favor of the buyers if they push and hold the price above $24.668.
If they succeed, the BTC/USDT pair could rally to $28,000 and then to the next resistance above $32,000.
On the contrary, If the bears pull the price below the 20-day EMA, the pair could drop to the 50-day SMA ($21.719). If this support also gives way, the next stop could be the uptrend line.
The price is stuck between $22,400 and $23,648 on the 4-hours chart. Both moving averages have 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 $23.648, the pair could rally to the overhead resistance of $24.668.
Conversely, if the price turns down and breaks below $22,400, the short-term advantage will tilt in favor of the bears. The pair could then drop to the uptrend line, which could act as a strong support.
FLOW/USDT
The tight trading range in Flow (FLOW) resolved to the upside with the range widening on Aug 4. This indicates an accumulation at lower levels and the start of a new move higher.
The bears are trying to cap the move up near $3, but a small silver lining is that the bulls have not given up much ground. This indicates that traders are not rushing to take profits after the recent rally.
The 20-day EMA ($2.07) has started to turn up and the RSI is close to the overbought zone, which indicates that the bulls have the upper hand. If the buyers push the price above the $3 resistance zone at $3.30, the FLOW/USDT pair could pick up momentum and rally towards $4.60.
The pair has turned down from overhead resistance near $3 but is finding support at the 20 EMA on the 4-hours chart. If the bulls push the price above $2.80, the pair could retest the overhead resistance of $2.99. If this level is broken, the uptrend would resume.
On the other hand, if the price breaks below the 20 EMA, the pair could drop to the 50% Fibonacci level at $2.41, and then to the 61.8% retracement level at $2.27. A break below this level could tip the advantage in favor of the bears and sink the pair to $2.
THETA/USDT
Theta Network (THETA) broke out and closed above the stiff overhead resistance of $1.55 on Aug. 5, indicating that the range has resolved in favor of the bulls. The bears attempted to sink the price back below the breakout level on Aug 6, but the bulls held their ground.
The 20-day EMA ($1.39) has started to turn to the upside and the RSI is in positive territory, signaling an upside for buyers.. If the bulls sustain the price above $1.65, the THETA/USDT pair could start a new uptrend towards the $2.10 pattern target. This level may pose a strong challenge, but if the bulls break through this hurdle, the pair could extend its rally to $2.60.
To invalidate this positive view, the bears will have to pull and hold the price below $1.55. If this happens, the aggressive bulls could get caught and the pair could slide towards the moving averages.
On the 4-hour chart, the bulls bought the dip to the 20 EMA, which indicates buying on the dips. Both moving averages on the 4-hour chart are sloping up and the RSI is close to the overbought zone, indicating that the path of least resistance is to the upside. If the bulls sustain the price above $1.65, the up move could resume.
The first sign of weakness will be the breakout and close below the 20 EMA. If this happens, the pair could drop down to the 50-day SMA. The bears will have to sink the price below this level to signal that the uptrend may be over in the short term.
QNT/USDT
Quant (QNT) rallied sharply from its intraday low of $40, reached on June 13. The bears tried to cap the move up at $115, but the bulls aggressively bought the dip below the 20-day EMA ($103) on July 26.
The bulls maintained their momentum and pushed the price above the overhead resistance of $115 on Aug 6.. This indicated the resumption of the uptrend. The QNT/USDT pair could rally to the upper $154-$162 resistance zone, where the bears could mount a strong defense.
On the other hand, if the price turns down from the current level, the bulls will try to turn the $115 level into support. If this happens, the pair could resume its uptrend. The bears will have to sink and sustain the price below the 20-day EMA to gain the upper hand.
The pair is in an uptrend, but the RSI on the 4-hour chart jumped into the overbought zone, indicating the possibility of a short-term correction. The bulls are expected to buy the dips towards the 20 EMA. If they do, the sentiment remains positive and traders are buying the dips. This will increase the probability that the uptrend will resume.
Conversely, if the price turns down from the current level and breaks below the 20 EMA, the pair could slide down to the 50 SMA. This is an important level to watch out for, as a break below it could trigger a drop to $100.
MKR/USDT
Maker recovery (MKR) is facing stiff resistance near $1,100, but a positive sign is that the bulls have not allowed the price to drop below the 20-day EMA ($1,044).
The moving averages are sloping up and the RSI is in the positive territory, which indicates that the buyers have the upper hand.
If the bulls push and hold the price above the $1,100-$1,188 resistance zone, the MKR/USDT pair could rally to $1,400 and then to the $1,570 pattern target. This move will suggest that the pair may have bottomed out.
On the contrary, If the price breaks below the overhead resistance and breaks below the 20-day EMA, the pair could slide towards the trend line. If it breaks down and closes below this level, the bullish setup will be invalidated.
The pair has formed a symmetrical triangle on the 4-hour chart. The 20 EMA is gradually sloping up and the RSI is in the positive zone, which indicates a slight advantage for the bulls.
If the buyers break out of the resistance line, the pair could rally to the overhead resistance of $1,188. A breakout and close above this level could signal a resumption of the uptrend.
Conversely, a break below the support line of the triangle could tip the advantage in favor of the sellers. The pair could drop to the psychological level of $1,000.
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.