5 Altcoins That Could Turn Bullish If Bitcoin Price Stabilizes
The major U.S. stock market indexes continued their slide last week as worsening macroeconomic conditions raised concerns about a global recession. The Dow Jones Industrial Average closed at its lowest level in 2022 and major indexes recorded their fifth weekly close in the past six weeks.
Although Bitcoin (BTC) has only fallen marginally this week, it risks closing at its lowest level since 2020. While another multi-year weekly close is a negative sign, sellers will have to sustain the lower levels or it could prove to be a bear trap. The price action over the next few days is likely to witness increased volatility as both the bulls and bears battle for supremacy.
Many investors miss opportunities to buy during sharp corrections because they are trying to catch the bottom. Traders should rather focus on the projects they like and accumulate the coins in a step-by-step manner lasting a few weeks or months. All coins do not bottom at the same time, so it is better to focus on individual cryptocurrencies that are showing strength.
While Bitcoin is nearing annual lows, some altcoins are holding up well. Let’s look at the charts of five cryptocurrencies that look interesting in the short term.
BTC/USDT
Bitcoin bulls have successfully defended the $18,626-$17,622 support zone in recent days, but they continue to face strong selling at the 20-day exponential moving average ($19,720). This suggests that bears continue to sell on minor rallies.
The downward moving averages indicate that the bears have the upper hand, but the positive divergence on the relative strength index (RSI) suggests that the bearish momentum may be weakening.
A break and close above the 20-day EMA would be the first sign that the bears might lose their grip. The BTC/USDT pair could then rise to the 50-day simple moving average ($21,043) and later to $22,799. Buyers must overcome this barrier to set the stage for a rally to $25,211.
Conversely, if bears lower the price below the June low of $17,622, selling could intensify and the pair could resume its downtrend. The pair could then plunge to $14,500.
The bulls are buying the decline below $18,626, but the bears continue to stop the recovery at the 50-SMA. This has pushed the price between these two levels, but this tight trade is unlikely to continue for long.
If the price declines and stays below $18,626, the bears could pull the pair to the vital support at $17,622. This level could once again witness a strong battle between the bulls and the bears. On the upside, if bulls push the price above the 50-SMA, the pair could rise to $20,400.
ATOM/USDT
Cosmos (ATOM) has been trading above the breakout level of $13.46 in recent days, indicating that sentiment remains positive and traders are buying on dips.
The 20-day EMA ($14.22) has flattened and the RSI is near the midpoint, indicating a balance between supply and demand. If the price breaks above $15.26, the short-term advantage could tilt in favor of the buyers. The ATOM/USDT pair could then rise to $17.20.
This level could again act as a resistance, but if buyers push the price above it, the pair could gain momentum and rise to $20.34 and later to $25.
Contrary to this assumption, if the price goes down and breaks below the 50-day SMA ($12.90), the advantage could tilt in favor of the bears. The pair could then fall to $10.
The pair has been stuck between $13.45 and $17 for some time. Buyers aggressively defended the support at $13.45 and are trying to push the price above the 50-SMA. If they do, the likelihood of a rally to $16 and then to $17 increases.
Conversely, if the price breaks down from today’s level and breaks below the 20-EMA, it would suggest that bears are continuing to sell on the rally. It could pull the price to the strong support at $13.45. The sellers need to lower the pair below $13 to clear the way for a possible drop to $11.50.
ALGO/USDT
The uncertainty of the range-bound action between $0.27 and $0.38 resolved to the upside on September 23, indicating the start of a new up move. If that happens, Algorand (ALGO) could still be in its first part of the uptrend.
The important level to watch on the downside is $0.38. If bulls turn this level into support, it could increase the likelihood of the start of a new uptrend. The ALGO/USDT pair could then increase to $0.45 and later to $0.50.
This bullish view may be invalidated in the short term if the price falls below $0.38 and re-enters the range. It can lower the price to the 20-day EMA ($0.33). If the price pulls back from this level, the bulls will again try to clear the overhead resistance.
The price rose above the overhead resistance at $0.38, but the bulls could not build on this momentum. This shows that the bears have not yet given up and they continue to sell on the rally near $0.41.
If bears pull the price below the 20-EMA, the pair could fall to $0.36. This is an important level for the bulls to defend because a break below it could open the doors for a possible drop to the 50-SMA.
On the upside, the bulls will need to push the price above $0.41 to signal the resumption of the up move.
Related: What is scalping in crypto and how does scalp trading work?
CHZ/USDT
Chiliz (CHZ) recovered strongly from its June lows and bulls cleared the overhead resistance at $0.26 on September 22, signaling the resumption of the up move. When a coin moves against market sentiment, a closer look is necessary.
The bears have tried to lower the price below the breakout level of $0.26 in the last three days, but the bulls have held their ground. This shows that bulls see the falls as a buying opportunity. The rising moving averages and RSI in the positive territory indicate that buyers are in command.
If the price emerges and breaks above $0.28, the CHZ/USDT pair could rise to the next stiff resistance at $0.33.
Conversely, if the price goes down and breaks below $0.26, it would indicate that traders may rush to the exit. The pair may first fall to the 20-day EMA ($0.23) and later to the 50-day SMA ($0.21).
Both moving averages are sloping up, indicating favor for buyers, but the negative divergence on the RSI shows that the bullish momentum may be weakening. If bears lower the price below $0.26, the pair may fall to the 50-SMA. This is a key level for the bulls to defend because if it gives way, the pair could fall to $0.22.
On the other hand, if the price retraces $0.26 and rises above $0.28, the rally could continue. The pair could then rise to $0.32.
QNT/USDT
Quant (QNT) is showing strength as it trades above both moving averages. Even when sentiment across the cryptocurrency sector has been negative, it has managed to charge higher.
The bears had defended the $112 level for the past several days, but the bulls broke through the resistance on September 24, pushing the price to the downtrend line. The long wick on today’s candlestick shows that the bears are trying to stop the stop movement at this level.
On a less positive note, the bulls bought the dip to $112 on September 25, suggesting that buyers are trying to turn this level into support. The QNT/USDT pair may rise again to the downtrend line. If this obstacle is cleared, the pair could rise to $133 and later to $154.
Alternatively, if the price goes down and breaks below $112, the next stop could be the 20-day EMA ($106). A break below this support could pull the pair to $95.
The pair gained momentum after breaking above $112 and reaching near the downtrend line. This pushed the RSI into the overbought territory, which may have tempted short-term traders to book profits.
The price retreated from $112, indicating that sentiment remains positive and traders are buying on dips. The pair may rise to $121 and then to the downtrend line. On the downside, a break below $112 could lower the pair to the 50-SMA and then to $95.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade involves risk, you should do your own research when making a decision.
