Bitcoin (BTC) and several altcoins are trading in a tight range over the weekend, suggesting that investors are undecided about the next directional move. Traders may be waiting for Wall Street to open before making big directional bets because Bitcoin has been closely correlated with the S&P 500 in recent days.
The sharp drop in US stock markets on April 22 suggests that investors are becoming increasingly nervous about the aggressive stance of central banks. The market expects a 250 basis point rate hike by the US Federal Reserve in 2022. In addition, the European Central Bank is expected to raise rates for the first time since 2011, according to a Reuters source.
Data from Coinglass showed that funding rates on crypto derivatives exchanges remained negative over the weekend, indicating a bearish bias. Failure to hold a rally has pushed the Crypto Fear and Greed Index back into “extreme fear” territory.
Could Bitcoin attract strong buying at lower levels? If that happens, the selected altcoins could outperform. Let’s study the charts of the top 5 cryptocurrencies that show a positive chart structure.
BTC/USDT
Bitcoin broke below the psychological support at $40,000 on April 22, but the bears have been unable to build on this advantage. The successive inside candlestick patterns on April 23 and 24 suggest indecision between the bulls and the bears.
The 20-day exponential moving average ($41,150) is falling and the RSI is in the negative zone, which indicates that the sellers have a slight advantage. If the bears sink and sustain the price below $39,000, the BTC/USDT pair could drop to the support line of the ascending channel. The bulls are expected to defend this level vigorously.
If the price bounces hard off the support line, it will indicate strong demand at lower levels. The bulls will have to push and sustain the price above the 50-day SMA ($41.993) to signal that the correction may be over. Afterwards, the pair can attempt a rally to the 200-day SMA ($47.828).
Alternatively, if the price breaks below the channel, the selling could intensify further and the pair could drop to $34.322 and then $32.917.
The 4-hour chart shows that the price is stuck inside a tight range between $39,177 and $39,980. This indicates that the bears are trying to turn the $40,000 level into resistance. The downsloping 20-day EMA and the RSI in the negative territory suggest that the path of least resistance is to the downside.
If the price drops below $39.177, the pair could drop to $38.536. A breakout and close below this level could open the doors for a drop to $37,000.
Contrary to this assumption, if the price turns up from the current level and breaks above the 50-day SMA, the bullish momentum could pick up and the pair could rally to the 200-day SMA.
DOT/USDT
Polkadot (DOT) has been trading near the overhead resistance at $19 for the past few days. This suggests that the bears have successfully defended the level, but a minor upside is that the bulls have not given much ground to the sellers.
The slightly downward sloping 20-day EMA ($19) and the RSI in the negative zone suggest that the bears have a slight advantage. If the price turns down and drops below $18, the possibility of a drop to the strong support at $16 increases.
Conversely, If the bulls push the price above the 50-day SMA ($19), the bullish momentum could pick up and the DOT/USDT pair could rally to the overhead resistance at $23. The bears are expected to mount a strong defense at $23. this level.
The 4-hour chart shows the formation of a descending triangle pattern that will complete on a breakout and close below $18. If that happens, the pair could drop to $17 and then $16.
Conversely, If the price rises from the current level and breaks above the downtrend line, it can invalidate the bearish setup. That could attract buying and the pair can rally to the 200-day SMA.
A breakout and close above this level could signal an upside for buyers. The pair can then attempt a rally to $23.
USDT/XMR
Monero (XMR) is correcting in a bullish move. The price turned down from $290 on April 22, which indicates that the bears pose a strong challenge near the psychological level of $300.
The XMR/USDT pair might first drop to the 20-day EMA ($245), which is likely to act as strong support. If the price bounces hard off this level, it will indicate that the bulls are buying the dips. Then, the pair might again try to break above the overhead resistance at $300. If that happens, the pair can rally to $340.
Alternatively, if the price breaks below the 20-day EMA, the selling could intensify and the pair could slide to the 50-day SMA ($215).
The pair has dipped below its 50-day SMA, indicating that short-term traders are booked in profit. If the price continues down and drops below $250, the selling could accelerate and the pair could drop to $240 and then to the 200-day SMA.
Any bounce is likely to be met by selling at the 20 day EMA. The bulls will have to push and hold the price above the 20-day EMA to signal that the correction may be over. The pair could then rally to $280 and then $290.
APE/USDT
ApeCoin (APE) broke out of the symmetrical triangle pattern on April 19, indicating that the indecision between the bulls and bears has resolved in favor of the buyers.
The 20-day EMA ($13.67) has turned up and the RSI is in the positive zone, which indicates that the bulls are in command. There is minor resistance at $18.44 from where the APE/USDT pair turned down on Apr 23.
If the price turns up from the current level, the bulls will try to push the pair above $18.44. If they are successful, the pair could rally to $20 and then $24. This positive view could be invalidated in the short term if the price turns down and breaks below the 20-day EMA.
The 4-hour chart shows that the pair turned down from $18 but rebounded sharply from the 20-day EMA. This suggests that sentiment remains positive and traders are buying dips. If the price sustains above $17, the bulls will try to resume the up move.
Although the rise from the 20-day EMA indicates an upside for buyers, the RSI has formed a negative divergence which suggests that the positive momentum may be weakening. If the price turns down from the current level and falls below the 20 EMA, the selling could intensify and the pair could slide towards the 50 day EMA.
CAKE/USDT
PancakeSwap (CAKE) recently bounced off the downtrend line, indicating that the bulls had flipped the level to support. The price broke above the 20-day EMA and is trying to reach the 200-day SMA ($11.52).
The 20-day EMA ($8.69) and the 50-day SMA ($7.71) are gradually rising and the relative strength index is in the positive territory, which suggests that the bulls have the upper hand. If the buyers push and sustain the price above the 200-day SMA, the CAKE/USDT pair could rally to $13.50 and then $15.
Contrary to this assumption, if the price turns down from the 200-day SMA, it will suggest that the bears have not given up yet and continue to sell on rallies. Later, the pair can drop to the 20-day EMA. If the price bounces off this support, it will increase the chance of a break above the 200-day SMA. This positive view could be invalidated if the price falls below the 50-day SMA.
The moving averages on the 4-hour chart have turned up and the RSI is in the positive territory, which indicates that the bulls have the upper hand. If the price turns up from the current level or the 20-day EMA, the buyers will try to push the pair above the psychological $10 level. If successful, the pair could pick up momentum.
Contrary to this assumption, if the price turns down from the current level, the bears will try to pull the pair below the 20-day EMA. If they do, the pair can slide to the 50 SMA and then the 200 day SMA. A breakout and close below this support could suggest that the bears are back in the game.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should do your own research when making a decision.