The decline in the United States equities markets last week extended the market-wide losing streak to three consecutive weeks. The Nasdaq Composite fe
The decline in the United States equities markets last week extended the market-wide losing streak to three consecutive weeks. The Nasdaq Composite fell for six days in a row for the first time since 2019. The markets negative reaction to a seemingly positive August jobs report suggests that traders are nervous about the Federal Reserve’s future steps and its effects on the economy.
Weakness in the U.S. equities markets pulled Bitcoin (BTC) back below $20,000 on Sept. 2 and bears sustained the price below the level during the weekend. This pulled Bitcoin’s market dominance to just under 39% on Sept. 4, its lowest level since June 2018, according to data from CoinMarketCap.
Although the sentiment remains negative and it is difficult to call a bottom, investors who believe in the long-term prospects of cryptocurrencies could take the opportunity to gradually build positions at lower levels instead of trying to catch the bottom. However, investors could avoid chasing prices higher during bear market rallies and look to buy when the price falls to strong support levels.
If Bitcoin stages a recovery, select altcoins could move higher. Let’s study the charts of top-5 cryptocurrencies that are looking strong on the charts.
BTC/USDT
Bitcoin has been trading in a tight range between $19,520 and $20,576 for the past few days which shows a balance between the buyers and sellers in the near term. Although bulls are buying on dips, they have failed to overcome the selling at higher levels.
The downsloping 20-day exponential moving average ($20,863) and the relative strength index (RSI) in the negative territory indicate advantage to sellers. If bears sink the price below $19,520, the BTC/USDT pair could drop to the strong support zone between $18,910 and $18,626.
This zone is likely to attract strong buying by the bulls as that has been the case on two previous occasions. The bears will have to sink the price below $17,622 to signal the resumption of the downtrend.
On the other hand, buyers will have to push and sustain the price above the 20-day EMA to indicate that the bears may be losing their grip. The pair could then rise to the 50-day simple moving average ($22,271).
The price rebounded off the strong support near $19,520 but the bears are attempting to stall the recovery at the moving averages. This shows that bears are selling on every minor rally. If bears sink the price below $19,520, the pair could resume the next leg of the downtrend.
Contrary to this assumption, if bulls thrust the price above the moving averages, the pair could attempt a rally to the resistance of the range at $20,576. Buyers will have to clear this hurdle to signal a potential trend change in the near term.
ADA/USDT
Cardano (ADA) is in a consolidation but it is attempting to rise above the moving averages. This indicates demand at lower levels and increases the chances of an up-move, which is the reason for its selection.
The 20-day EMA ($0.47) has flattened out and the RSI has jumped into positive territory, indicating that the selling pressure is reducing. If buyers sustain the price above the 50-day SMA ($0.50), the ADA/USDT pair could rally to the downtrend line.
This level could again act as a strong resistance but if bulls overcome this barrier, the pair could rally to $0.70.
This positive view could be negated in the short term if the price turns down from the current level and slips below the 20-day EMA. If that happens, the pair could again slide to the strong support at $0.40.
The 20-EMA on the 4-hour chart is sloping up and the RSI has risen into the overbought territory. This indicates that bulls are in command but a minor correction or consolidation is possible in the near term.
If buyers sustain the price above $0.48 or the 20-EMA, it will suggest a change in sentiment from selling on rallies to buying on dips. That could push the price to $0.54 and later to the downtrend line.
To invalidate this positive view, bears will have to pull the price below $0.48. If that happens, the pair could slide to $0.44 and then to $0.42.
ATOM/USDT
Cosmos (ATOM) has not given up ground in the past few days and is trading near its overhead resistance at $13.45. This indicates that traders are not closing their positions as they anticipate the price to move higher. This is the reason for its inclusion in this list.
The ATOM/USDT pair dipped below the 50-day SMA ($11.08) on Aug. 29 but the bulls purchased at lower levels. That started a rebound which reached the overhead resistance at $13.45. The gradually rising moving averages and the RSI in the positive territory indicate the path of least resistance is to the upside.
If buyers propel the price above $13.45, the pair could pick up momentum and rally…
cointelegraph.com