US equity markets rallied sharply last week, ending a three-week losing streak. The S&P 500 rose 3.65% last week, while the Nasdaq Composite soared 4.14%. Continuing with its close correlation with the US stock markets, the price of bitcoin (BTC) also had a significant rebound and tries to end the week with gains of more than 7%.
The big rally in the stock markets and cryptocurrency markets are showing signs of a bottom formation, but it may be too early to predict the start of a new move higher. Equity markets may remain on edge ahead of the release of US inflation data on September 13 and the Federal Reserve meeting on September 20-21.
In addition to following the signals from the equity markets, the cryptocurrency space has its own major events to look forward to. Both The Merge of Ethereum and the Vasil de Cardano (ADA) hard fork scheduled for the next few days could increase the volatility of several cryptocurrencies.
Although choppy markets increase risk, they can offer short-term trading opportunities for agile traders. Let’s study the charts of five cryptocurrencies that look interesting in the short term.
BTC/USDT
Bitcoin price spiked above the 20-day exponential moving average ($20,662) on Sept. 9which was the first indication that selling pressure may be easing. The bears are trying to stall the rally at the 50-day SMA ($21,946), but a positive sign is that the bulls have not given up much ground..
The 20-day EMA has started to gradually slope up and the RSI is in positive territory, indicating that the path of least resistance is to the upside.. If the bulls push the price above the 50-day SMA, the BTC/USDT pair could rally towards the stiff overhead resistance at $25.211.. The bears are expected to defend this level vigorously.
Another possibility is that the price turns down from the 50-day SMA. If this happens, the pair could drop to the 20-day EMA. This is an important level to watch out for as if it breaks and closes below it, it could open the doors for a drop to $18.626. Alternatively, if the price bounces off the 20-day EMA, it will increase the probability of a break above the 50-day SMA.
The pair picked up momentum after breaking above the breakout level of $19.520. The significant rally pushed the RSI into the overbought zone, suggesting a small consolidation or correction. Buyers face a major challenge near $22,000 but have not given ground to bears. This suggests that they are buying during all minor dips.
If the bulls push the price above $22,000, the pair could quickly rally towards $23,500where the bears could try again to stop the upward movement.
On the contrary, If the price turns down and breaks below the 20 EMA, the pair could drop to $20.576. If it breaks below this level, the pair could consolidate in a wide range between $22,000 and $18,626 for some time.
ATOM/USDT
Cosmos (ATOM) broke above the overhead resistance of $13.45 on Sep 8, indicating that there is demand at higher levels. The next major resistance is at $20.30, which leaves room for a rally.
However, before that, the bears will try to push the price below the breakout level of $13.45. This is an important level to keep in mind because a breakout and close below this value will indicate that the recent breakout may have been a bull trap.
On the other hand, if the price turns up from the current level or rebounds from $13.45, it will suggest that the bulls are in control and are buying every dip. If the bulls push the price above $17.20, the up move can pick up momentum and reach $20.30.
The 4-hour chart shows that the ATOM/USDT pair is higher after breaking above the resistance at $13.45.. This pushed the RSI into the overbought zone and started a correction, but a positive sign is that the bulls have not given up much ground.
If the price bounces from the current level, the possibility of breaking above $17.20 increases. If this happens, the up move could continue and the pair could rally towards $20.30.
This positive view could be invalidated in the short term if the price continues to decline and breaks below the 20-EMA.. If this happens, the pair could drop to the 50% Fibonacci level at $14.36.
APE/USDT
ApeCoin (APE) bounced sharply from $4.17 support, indicating aggressive buying at lower levels. This suggests that the corrective phase could be ending, making it an interesting candidate for the short term.
Buyers pushed the price above the 20-day EMA ($5) on Sep 9 and the APE/USDT pair formed an intraday Doji candlestick pattern on Sep 10.. This uncertainty was resolved to the upside on September 11 with a strong rally to the 50-day SMA ($5.85). The bears could try to stop the recovery at this level.
If the price turns down from the current level, but bounces off the 20-day EMA, it will suggest that sentiment has turned positive and traders are buying dips.. The bulls will once again try to push the price above the 50-day SMA. If they succeed, the pair could shoot towards the overhead resistance at $7.80.
This positive view could be invalidated in the short term if the price turns down and breaks below the 20-day EMA.. In that case, the pair could drop to $4.17.
The 20-day EMA on the 4-hour chart has started to rise and the RSI has entered the overbought zone. This indicates that bulls have the upper hand, but a short-term pullback is possible.
If the price turns down from the current level but bounces off $5.30, it will suggest significant demand below. The bulls will retry to break above $5.83 and extend the rally to $6.44.
Secondly, if the price turns down and breaks below the 20-EMA, the advantage will tilt in favor of the bears.
CHZ/USDT
Chiliz (CHZ) broke above the 20-day EMA ($0.20) on Sept. 9what was the first indication that the corrective phase could be ending. Hence this token made it to the list.
The bears tried to push the price back below the 20-day EMA on Sep 10, but the bulls have held their ground. Buyers are trying to push the price towards the overhead resistance at $0.26, but the move higher may face strong headwinds near $0.23.
If the price turns down but does not break below the 20-day EMA, the probability of a rally to $0.26 will increase. Instead, if the price turns down and breaks below $0.20, it will suggest that the bears are active at higher levels. That could take the price to the 50-day SMA (0.18).
The 4-hour chart shows that the bears are defending the downtrend line. If the price turns down from the current level but bounces off the moving averages, it will suggest that the bulls are trying to come back.
Buyers will once again try to push the price above the downtrend line. If they succeed, the pair could start its march north towards $0.23 and then $0.26.
Secondly, If the price breaks below $0.20, the pair could stay inside the falling wedge pattern. This could push the price to $0.18.
QNT/USDT
Quant (QNT) failed to break below the important support at $87.60, indicating that the sentiment is positive and the bulls are buying the dips. For this reason she was selected.
The major bounce from $87.60 broke above the 20-day EMA ($100) on September 8, which was the first indication that the corrective phase might be ending.. The bears posed a major challenge near the 50-day SMA ($105), but they were unable to break the price below the 20-day EMA.
This indicates that sentiment has turned positive and the bulls are buying dips. The buyers carried the QNT/USDT pair above the 50-day SMA on Sep 11. If the bulls hold the higher levels, the pair could rally to $117 and then $124. A break above this level could open the doors for a rally to $130.
This bullish view could be invalidated if the price turns down and breaks below the 20-day EMA.. If this happens, the pair could drop to the important support at $87.60.
The 4-hour chart shows that the pair bounced sharply off the support at $87.60.. The bears posed a strong challenge near $108, but a positive sign is that the bulls bought the dip to the 20 EMA. This indicates that traders are viewing dips as a buying opportunity.
The buyers resumed the rally pushing the price above the resistance at $108. The pair could rally to $113 and subsequently to $117. On the contrary, if the price turns down and falls below the 20-EMA, the pair could go down to the 50-SMA.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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