The recovery in US equity markets took a breather this week as the main averages closed in the red. Traders appear to have taken profit ahead of next week’s busy economic schedule.
The S&P 500 Index fell 3.37%, but one small silver lining for cryptocurrency markets is that Bitcoin (BTC) has not trailed equity markets lower. This suggests that cryptocurrency traders are not panicking and dumping their positions with every drop in equities.
Bitcoin’s swing suggests that traders are avoiding placing big bets ahead of the Federal Reserve’s rate hike decision on December 14. However, that has not slowed down the action of some altcoins, which show promise in the short term.
Let’s take a look at the charts of Bitcoin and some altcoins and find out the critical levels to watch out for in the short term.
BTC/USDT
Bitcoin has been hovering around its 20-day EMA of $17,031 for the past few days. The flat 20 day EMA and the RSI near 50 do not give a clear advantage to either the bulls or the bears.
The critical level to watch on the upside is $17,622. If the buyers break above this level, the BTC/USDT pair could start a stronger rally that could take it to the downtrend line. The bears are expected to aggressively defend this level.
If the price reverses the direction of the downtrend line, but does not break below $17.622, it will suggest that the bulls are trying to turn the level into support. In this way the pair could overcome the downtrend line. The pair could rally to $21,500.
On the other hand, the bears could gain strength if the pair breaks below $16.678. The pair could drop as low as $15,995.
The pair has been trading within a rising channel on the four hour chart. The bears have held the price in the lower half of the channel, indicating selling on rallies. A break below the moving averages could take the price to the support line of the channel.. If this level does not hold, the pair could start a move lower to $16.678 in the near term.
If the price rises from the current level or the support line of the channel, it will indicate that the bulls continue to buy on dips. Next, the pair could attempt a rally to the overhead resistance at $17.622. If this level is cleared, the pair could rally to the resistance line of the channel.
XMR/USDT
Monero (XMR) has been trading within a falling wedge pattern for the past few days. The rising 20-day EMA ($143) and the RSI in the positive zone indicate that the bulls have an advantage.
The XMR/USDT pair could rally to the resistance line of the wedge, where the bulls are likely to find strong selling by the bears. If the price turns down from the resistance line and breaks below the moving averages, it will suggest that the pair can extend its stay within the wedge.
Instead, if the bulls push the price above the resistance line, it will suggest a short-term trend reversal. The pair could then try a rally to $174, which could act as a hurdle. A break above this level could indicate that the downtrend may be over.
The pair has been rising within a rising channel pattern on the four hour chart. This shows that near-term sentiment remains positive and traders are buying dips. The pair could continue its upward move and reach towards the resistance line near $156. If this level is scaled, the rally can touch $162.
The first sign of weakness will be a break and close below the moving averages. The pair could then decline to the support line of the channel. A break below the channel could start a move lower to $133.
TON/USDT
Bulls pushed Toncoin (TON) above the symmetrical triangle resistance on Dec. 11, indicating that uncertainty has resolved in favor of buyers. The symmetrical triangle usually acts as a continuation pattern, increasing the probability that the uptrend will resume.
If the buyers hold the price above the triangle, the TON/USDT pair could attempt a break above the $2-$2.15 overhead resistance zone. If they manage to do that, the pair could pick up momentum and shoot up to the pattern target of $2.87.
Conversely, if the price fails to sustain above the triangle, it will suggest that the bears continue to sell rallies. A break below the 50-day SMA of $1.70 could trap the aggressive bulls and send the pair to the support line of the triangle.
The moving averages on the four hour chart are sloping up and the RSI is in the overbought zone, indicating that the bulls are in command. The move up may face hurdles near $2, but if the bulls hold the price above this level, the rally could accelerate.
If the price turns down from the current level and breaks below the 50 SMA, the selling could accelerate and the pair could drop to $1.70. This is an important level to watch because a break below it could signal that the bears are back in command.
TWT/USDT
Trust Wallet Token (TWT) has continued its northerly march, suggesting that traders are buying at higher levels and not booking profits in a hurry. That increases the possibility of the extension of the uptrend.
The bulls will try to push the price above the upper resistance at $2.73. If successful, the TWT/USDT pair could rally to the psychological $3 level, where the bears may try to stop the bullish move.
If the buyers break through this hurdle, the uptrend could reach the pattern target of $3.51.
The bears likely have other plans as they will try to defend the overhead resistance at $2.73. They will have to push the price below the 20-day EMA ($2.30) to gain an advantage.
The four hour chart shows that the bulls have been buying the dips in the moving averages. Although the moving averages have an upward slope, andThe RSI is showing a negative divergence, indicating that the bullish momentum may be weakening. This may change if the bulls push the price above $2.73, as that could attract more buying.
The moving averages are the critical support to watch on the downside. If the 50-day SMA support collapses, several short-term traders may book profits and that could send the pair down to $2.25 and then $2.
AXS/USDT
Axie Infinity (AXS) has been in a strong downtrend but is showing the first signs of a possible trend reversal. Buyers pushed the price above the downtrend line on Dec 5, but were unable to sustain the higher levels, as seen on the long wick of the day’s candle.
One minor positive is that the bulls have not allowed the price to fall below the moving averages. This shows that the buyers are trying to turn the moving averages into support.
The moving averages are on the verge of a bullish crossover and the RSI is in positive territory, indicating that momentum may be shifting in favor of the bulls.. If the price breaks out and sustains above the downtrend line, a rally to $11.85 is likely. This level is expected to act as a major hurdle to the upside.
The bullish view could be invalidated in the short term if the price turns down and breaks below the moving averages. The AXS/USDT pair could slide to $6.57.
The four hour chart shows the bears strongly defending the downtrend line and the bulls buying the dips to the 50-day SMA. The 20-day EMA has flattened out and the RSI is near 47, indicating a balance between supply and demand.
A break and close above $8.70 could shift the advantage in favor of the bulls. The pair could then rally to $9.28 and then $10. Alternatively, a break below $7.86 could suggest that the bears are back in the driver’s seat. The pair could then slide to $6.87.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.