Crypto traders watch ATOM, APE, CHZ and QNT as Bitcoin flashes at the bottom
US stock markets rose sharply last week, ending a three-week losing streak. The S&P 500 rose 3.65% last week, while the Nasdaq Composite gained 4.14%. Continuing its close correlation with the US stock markets, Bitcoin (BTC) also made a strong comeback and looks to end the week with gains of more than 7%.
The sharp rise in the stock and cryptocurrency markets is showing signs of a bottom formation, but it may be too early to predict the start of a new bull run. Equity markets may remain on edge ahead of the release of US inflation data on September 13 and the Federal Reserve meeting on 20-21. September.
Along with taking cues from the stock markets, the cryptocurrency space has its own important events to look forward to. Both Ethereum’s merger and Cardano’s (ADA) Vasil hard fork planned in the next few days could increase volatility in several cryptocurrencies.
Although choppy markets increase risk, they can offer short-term trading opportunities for nimble traders. Let’s study the charts of five cryptocurrencies that look interesting in the short term.
BTC/USDT
Bitcoin rose above its 20-day exponential moving average ($20,662) on September 9, which was the first indication that selling pressure could ease. The bears are trying to stop the recovery at the 50-day simple moving average ($21,946), but a positive sign is that the bulls haven’t given up much ground.
The 20-day EMA has started to slope gradually upwards and the relative strength index (RSI) is in the positive territory, indicating that the path of least resistance is moving upwards. If bulls drive 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 goes down from the 50-day SMA. If that happens, the pair could fall to the 20-day EMA. This is an important level to watch because a break and close below it could open the doors to a drop to $18,626. Alternatively, if the price pulls back from the 20-day EMA, it would increase the likelihood of a break above the 50-day SMA .
The pair gained momentum after rising above the breakdown level of $19,520. The sharp rally pushed the RSI into the overbought territory, suggesting a minor consolidation or correction. Buyers face a stiff challenge near $22,000, but they have not given ground to the bears. This suggests that every minor dip is bought.
If bulls drive the price above $22,000, the pair could quickly increase towards $23,500, where the bears could again try to stop the move.
Contrary to this assumption, if the price goes down and breaks below the 20-EMA, the pair could fall to $20,576. A break below this level would suggest that the pair could consolidate in a large area between $22,000 and $18,626 for a period.
ATOM/USDT
Cosmos (ATOM) broke above overhead resistance at $13.45 on September 8, indicating demand at higher levels. The next stiff resistance is at $20.30 which leaves room for a rally.
But before that, the bears will try to pull the price below the breakout level of $13.45. This is an important level to keep an eye on because a break and close below it will indicate that the recent breakout may have been a bull trap.
On the other hand, if the price goes up from the current level or pulls back from $13.45, it would indicate that the bulls are in control and buying on every dip. If bulls push the price above $17.20, the rally could accelerate and reach $20.30.
The 4-hour chart shows that the ATOM/USDT pair rallied after breaking above the overhead resistance at $13.45. That pushed the RSI deep into the overbought territory and started a correction, but a positive sign is that the bulls haven’t given up much ground.
If the price pulls back from the current level, the possibility of a break above $17.20 increases. If that happens, the rally could continue and the pair could rise towards $20.30.
This bullish view may be invalidated in the short term if the price continues lower and plunges below the 20-EMA. If that happens, the pair could fall to the 50% Fibonacci retracement level at $14.36.
APE/USDT
ApeCoin (APE) bounced back strongly from support at $4.17, indicating aggressive buying at lower levels. This suggests that the corrective phase may be over, making it an interesting short-term candidate.
Buyers pushed the price above the 20-day EMA ($5) on September 9, and the APE/USDT pair formed an intraday Doji candlestick pattern on September 10. This uncertainty resolved to the upside on September 11 with a strong rally to the 50-day SMA ($5.85). The bears may try to stop the recovery at this level.
If the price declines from today’s level but retraces from the 20-day EMA, it would indicate that sentiment has turned positive and traders are buying on the dip. The bulls will then again try to drive the price above the 50-day SMA. If they do, the pair could rise towards the overhead resistance at $7.80.
This positive view may be invalidated in the short term if the price goes down and breaks below the 20-day EMA. If so, the pair could fall to $4.17.
The 20-EMA on the 4-hour chart has started to rally and the RSI has risen into overbought territory. This indicates that bulls have the upper hand, but a short-term pullback is possible.
If the price breaks down from today’s level but retraces the $5.30 level, it would indicate strong demand at lower levels. The bulls will then make another attempt to push the price above $5.83 and extend the recovery to $6.44.
Alternatively, if the price goes down and breaks below the 20-EMA, the advantage could tilt in favor of the bears.
Related: Terra back from the dead? LUNA price rises 300% in September
CHZ/USDT
Chiliz (CHZ) broke above the 20-day EMA ($0.20) on September 9, which was the first indication that the corrective phase may be over. Therefore, this token made the list.
The bears tried to pull the price back below the 20-day EMA on September 10, but the bulls have held their ground. Buyers are trying to push the price towards the overhead resistance at $0.26, but the rally may face strong headwinds near $0.23.
If the price declines but does not fall below the 20-day EMA, it will increase the likelihood of a rally to $0.26. Contrary to this assumption, if the price goes down and breaks below $0.20, it would indicate that bears are active at higher levels. It can pull 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 breaks down from today’s level but pulls back from the moving averages, it would indicate that bulls are attempting a comeback.
Buyers will then again try to drive the price above the downtrend line. If successful, the pair could start its march north towards $0.23 and later to $0.26.
Alternatively, if the price dips below $0.20, it would suggest that the pair may remain within the descending wedge pattern. That could pull the price down to $0.18.
QNT/USDT
Quant (QNT) did not break below the strong support at $87.60, indicating that sentiment is positive and bulls are buying on dips. That is the reason for the choice.
The sharp pullback at $87.60 broke above the 20-day EMA ($100) on September 8, which was the first indication that the corrective phase may be over. The bears posed a strong challenge near the 50-day SMA ($105), but could not lower the price back below the 20-day EMA.
This indicated that sentiment had turned positive and the bulls were buying on dips. Buyers pushed the QNT/USDT pair above the 50-day SMA on September 11. If bulls sustain the higher levels, the pair could rise to $117 and then to $124. A break above this level could open the door for a rally to $130.
This bullish view could be invalidated if the price goes down and breaks below the 20-day EMA. If that happens, the pair could fall to the strong support at $87.60.
The 4-hour chart shows that the pair bounced back sharply from the $87.60 support. 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 see dips as a buying opportunity.
Buyers resumed the recovery by pushing the price above the $108 overhead resistance. The pair may increase to $113 and later to $117. Conversely, if the price declines and falls below the 20-EMA, the pair may fall to the 50-SMA.
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.
