Bitcoin’s dull price action allows XMR, TON, TWT and AXS to gather strength
The relief rally in the US stock markets took a breather this week as all major averages closed in the red. Traders appear to have booked profits ahead of the busy financial calendar next week.
The S&P 500 index fell 3.37%, but a minor positive for the cryptocurrency markets is that Bitcoin (BTC) has not followed the stock markets lower. This suggests that crypto traders are not panicking and dumping their positions with every fall in stocks.
The range-bound action in Bitcoin suggests traders are avoiding big bets ahead of the Federal Reserve’s rate hike decision on December 14. However, that hasn’t stopped the action in select altcoins, which are showing promise in the short term.
Let’s look at the charts of Bitcoin and select altcoins and see the critical levels you should watch out for in the short term.
BTC/USDT
Bitcoin has been hovering around its 20-day exponential moving average (EMA) of $17,031 for the past few days. The flat 20-day EMA and the relative strength index (RSI) near 50 do not provide any clear advantage to either the bulls or the bears.
The critical level to watch on the upside is $17,622. If buyers kick the price above this level, the BTC/USDT pair could start a stronger recovery that could take it to the downtrend line. The bears are expected to defend this level aggressively.
If the price reverses direction from the downtrend line, but does not fall below $17,622, it will indicate that the bulls are trying to turn the level to support. That could increase the prospect of a break above the downtrend line. The pair could then increase to $21,500.
On the downside, the bears could gain strength if the price breaks below $16,678. The pair could then fall to $15,995.
The pair has been trading in an ascending channel on the four-hour chart. The bears have held the price in the lower half of the channel, indicating selling on a rally. A break below the moving averages can pull the price to the support line of the channel. If this level does not hold, the pair could start a decline to $16,678 in the short term.
If the price goes up from the current level or the support line of the channel, it will indicate that bulls are continuing to buy on the decline. The pair could then attempt a rally to the overhead resistance at $17,622. If this level is taken out, the pair can climb 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 upside 20-day EMA ($143) and RSI in the positive zone indicate that bulls have an advantage.
The XMR/USDT pair may rise to the resistance line of the wedge, where the bulls are likely to face 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 may extend its stay within the wedge.
Instead, if bulls drive the price above the resistance line, it will suggest a change in the short-term trend. The pair could then attempt a rally to $174 which could act as a roadblock. A break above this level may signal that the downtrend may be over.
The pair has risen within an ascending channel pattern on the four-hour chart. This shows that the short-term sentiment remains positive and traders are buying the dips. The pair can continue the up move and reach the resistance line near $156. If this level scales, the rally could touch $162.
The first sign of weakness will be a break and close below the moving average. The pair can then go down to the support line of the channel. A break below the channel could initiate a decline to $133.
TONS/USDT
The bulls pushed Toncoin (TON) above the resistance of the symmetric triangle on December 11, indicating that the uncertainty has resolved in favor of the buyers. The symmetrical triangle usually acts as a continuation pattern, increasing the probability of resumption of the uptrend.
If buyers sustain the price above the triangle, the TON/USDT pair may attempt a break above the overhead resistance zone between $2 and $2.15. If they manage to do so, the pair could gain momentum and soar to the pattern target of $2.87.
Conversely, if the price does not hold above the triangle, it would indicate that the bears are continuing to sell on the rally. A break below the 50-day simple moving average (SMA) of $1.70 could catch the aggressive bulls, pulling the pair to the triangle support line.
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 rally may face a hurdle near $2, but if bulls sustain the price above this level, the rally could gain momentum.
If the price declines from today’s level and breaks below the 50-SMA, selling may accelerate and the pair may fall to $1.70. This is an important level to keep an eye on because a break below it could signal that bears are back in control.
Related: SBF ‘didn’t like’ decentralized Bitcoin — ARK Invest CEO Cathie Wood
TWT/USDT
Trust Wallet Token (TWT) has continued its northward march, suggesting that traders are buying at higher levels and not booking profits in a hurry. This increases the possibility of extending the uptrend.
The bulls will attempt to drive the price above the overhead resistance at $2.73. If they succeed, the TWT/USDT pair could rise to the psychological level of $3 where the bears could try to stop the stop move.
If buyers bulldoze through this obstacle, the uptrend could reach the pattern target of $3.51.
The bears likely have other plans as they will try to defend overhead resistance at $2.73. They need to pull the price below the 20-day EMA ($2.30) to gain the upper hand.
The four-hour chart shows that bulls have bought the dips to the moving averages. Although the moving averages are trending upwards, the RSI is showing a negative divergence, indicating that the bullish momentum may be weakening. This could change if bulls push the price above $2.73 as that could attract further buying.
The moving averages are the critical support to watch on the downside. If the 50-SMA support collapses, more short-term traders can book profits and it can pull the pair down to $2.25 and then to $2.
AXS/USDT
Axie Infinity (AXS) has been in a strong downtrend, but it is showing the first signs of a potential trend change. Buyers pushed the price above the downtrend line on December 5, but were unable to sustain the higher levels, judging by the long wick on today’s candlestick.
A less positive thing is that the bulls have not allowed the price to break below the moving averages. This shows that buyers are trying to turn moving averages into support.
The moving averages are on the verge of a bullish crossover and the RSI is in the positive territory, indicating that the momentum may change in favor of the bulls. If the price breaks and holds above the downtrend line, a rally to $11.85 is likely. This level is expected to act as a major obstacle to the upside.
The bullish view may be invalidated in the short term if the price goes down and breaks below the moving averages. The AXS/USDT pair could then slide to $6.57.
The four-hour chart shows bears strongly defending the downtrend line and bulls buying the dips to the 50-SMA. The 20-EMA has flattened 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 increase to $9.28 and later to $10. Alternatively, a break below $7.86 could indicate 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 conduct their own research when making a decision.
