5 altcoins that could be ripe for a short-term rally if Bitcoin price holds $19K
The S&P 500 and Nasdaq Composite fell to new year-to-date lows last week and ended the week with losses of 1.55% and 3.11%, respectively.
The scenario changed drastically on October 17 after earnings, the season picked up and a sharp policy reversal by UK Chancellor Jeremy Hunt added details to the government’s plan to fix his predecessor’s (Kwasi Kwarteng’s) fiscal package, which had triggered a record fall in the value of the GBP and a near liquidation of pension schemes in the UK.
At the time of writing, the Dow is up 1.78%, while the S&P 500 and Nasdaq are up 2.57% and 3.26% respectively. Meanwhile, Bitcoin (BTC) has managed to hold well above its year-to-date lows, showing near-term better performance.
Some analysts expect that Bitcoin may be closer to a bottom. Twitter trader Alan said that the stochastic indicator on Bitcoin’s monthly chart has reached levels similar to those seen during the bear markets of 2014 and 2018, indicating a likely macro bottom.
Similarly, LookIntoBitcoin creator Philip Swift said in an interview with Cointelegraph that Bitcoin may be close to major cycle lows. Citing various metrics, Swift said Bitcoin could face another two to three months of pain, but should start its outperformance in 2023.
As Bitcoin holds above the June low, select altcoins are attracting buyers. Let’s look at 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 October 14, but the higher levels attracted a lot of selling by the bears. It pulled the price back below the 20-day exponential moving average (EMA) ($19,387).
Buyers are trying to defend the immediate support at $18,843, but the recovery may face resistance at the 20-day EMA and then at the downtrend line. If the price breaks down from the overhead resistance, the possibility of a break below $18,843 increases. The pair could then plunge to the $18,125 to $17,622 support zone.
To avoid this disaster, the bulls must force the price above the downtrend line. If they manage to do so, 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 bulls push the price above the moving averages, the pair could climb to $20,000 and then to $20,500. The bears can put up a strong resistance at this level, but if the bulls overpower them, the recovery could accelerate.
Another possibility is that the price breaks down from the moving averages and falls below the $18,843 support. That could intensify the selling and the pair could then plunge to the $18,125 support. The bulls are expected to defend this level vigorously.
MATIC/USDT
Polygon (MATIC) has attempted to rise above the downtrend line in recent days. Although the bears were able to defend the overhead resistance, they were unable to hold the price down on October 13. This suggests that bulls are buying the dips as they anticipate a move higher.
If the price climbs above the downtrend line, the short-term trend could tilt in favor of the bulls. The MATIC/USDT pair may then attempt a rally to $0.94. This level could again act as a strong barrier, but if bulls overcome it, the pair could rise to $1.05.
Alternatively, if the price again breaks down from the downward trend line, the bulls may give up and the pair may then fall to $0.69. The bears need to pull the price below this level to start a deeper correction to $0.62 and then to $0.52.
The downward trend line has witnessed a tough battle between the bulls and the bears. Although the bears have come out on top, the bulls are not willing to give up. They aggressively bought the decline to $0.71 and are again trying to push the pair above the downtrend line.
The 20-EMA has flattened and the RSI is near the midpoint, indicating a balance between supply and demand. If 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 possible rally to $0.86.
On the other hand, buyers can exit their position if the price goes down and breaks below $0.77. The pair could then slide to $0.71.
HT/USDT
Huobi Token (HT) started a strong rally from $4.07 on October 10 that reached $8.20 on October 14, a move of 101% within five days. This indicates that bulls are in control.
The sharp rally in recent days pushed the RSI into deeply overbought territory, which may have tempted short-term traders to book profits. It started a correction that could reach the 38.2% Fibonacci retracement level at $6.61.
If the price breaks off this support, the bulls will try to resume the rally by pushing the HT/USDT pair above $8.20. If they succeed, the pair can increase to $10.
Contrary to this assumption, if the price breaks below $6.64, the pair could fall to the 50% retracement level of $6.12 and then to the 61.8% retracement level of $5.63. A deeper drop can delay the start of the next stage of the up move.
The 4-hour chart shows that the price bounced back from the 20-EMA, but the bulls could not sustain the higher levels. This shows that traders can book profits on smaller rallies.
The 20-EMA has flattened and the RSI is just above the midpoint, indicating that the bullish momentum may be weakening. If the price breaks and holds below the 20-EMA, the next stop could be the 50-SMA.
If bulls want to regain the upper hand, they will need to push the price above $7.65. The pair may then retest the overhead resistance at $8.20. A break above this level could start the next stage of the uptrend.
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QNT/USDT
Quant (QNT) broke above overhead resistance at $162 and remains higher, indicating continued demand from the bulls.
The rising 20-day EMA ($149) indicates favor for buyers, but the RSI in the overbought territory points to a possible minor correction or consolidation in the near term. Buyers are expected to defend the drop to the $162 breakout level.
If the price pulls back from this level, the QNT/USDT pair could rise to $200 and later attempt a rally to the $230 target.
This positive view may be invalidated in the short term if the price goes down and breaks below the 20-day EMA. The pair could then go down to the 50-day SMA ($120).
The pair faces resistance near $188, but the rising moving averages and RSI in the overbought zone indicate that the path of least resistance is up. If buyers push the price above $188, the pair could rise to $204.
Conversely, if the price goes down and breaks below the 20-EMA, it would indicate that traders can book profits. That could pull the price down to the crucial $162 support. A break 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 its moving averages for the past few days, and the RSI has jumped into positive territory, indicating favor for buyers.
The OKB/USDT pair faces stiff resistance at the $17.50 overhead resistance, but a minor positive is that the bulls have not given ground to the bears. This suggests that the bulls expect the pair to climb above overhead resistance. If that happens, the pair could rise to $20 and then to $23.22.
The first support on the downside is $16.39. If the price goes down and breaks below this level, the pair may slide to the moving average and then to $15.
The price was knocked down from the overhead resistance at $17.50, but the bulls are trying to defend the 20-EMA. If the price rises above $17, a retest of $17.50 is more likely. Buyers need to clear this obstacle to signal resumption of the uptrend.
The positive momentum may weaken if the price goes down and breaks below the 20-EMA. The pair can then go down to the 50-SMA. If this level also breaks, the next stop could be $15.50.
On the contrary, if the price retraces from the 50-SMA and rises above the 20-EMA, it will suggest accumulation at lower levels. The bulls may then again attempt a rally to $17.50.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
