The cryptocurrency markets and the United States equities markets witnessed profit-booking this week as the macroeconomic data hinted toward continued
The cryptocurrency markets and the United States equities markets witnessed profit-booking this week as the macroeconomic data hinted toward continued rate hikes by the Federal Reserve. Bitcoin (BTC) is down more than 4% and the S&P 500 fell 2.7% to record its worst week of the year.
The CME FedWatch Tool shows a 73% probability of a 25 basis points rate hike by the Fed in the March meeting but after the hotter-than-expected inflation readings in two weeks, the probability of a 50 basis point rate hike has started to slowly gain traction.
During periods of uncertainty, some coins enter a deeper correction while a few buck the trend and continue to outperform the markets. Hence, it becomes important to select the right coins to trade.
A few coins that have witnessed a shallow correction or have bounced sharply off the support have been selected in this list. Let’s see their charts and determine the levels to watch out for.
BTC/USDT
Bitcoin plunged below the 20-day exponential moving average ($23,391) on Feb. 24 but the bears could not build upon this advantage and sustain the price below the strong support at $22,800.
The price bounced off $22,800 on Feb. 25 and the bulls are trying to push the price above the 20-day EMA. If they manage to do that, it will indicate that the BTC/USDT pair may consolidate between $25,250 and $22,800 for a few days.
The flattening 20-day EMA and the relative strength index (RSI) near the midpoint also suggest a range-bound action in the near term.
Alternatively, if the price slips below $22,700, the selling could intensify and the pair may plummet to the next strong support at $21,480.
The 20-EMA has turned down on the 4-hour chart and the RSI is in the negative territory. This indicates an advantage to the bears. Sellers will try to protect the 20-EMA and if the price turns down from this level, the likelihood of a break below $22,800 increases. If that happens, the selling may intensify and the pair may slide to $21,480.
On the contrary, if the price breaks above the 20-EMA, it will suggest that bulls are buying on dips. That could push the pair to the 50-simple moving average and keep the price stuck inside the range for some more time.
LDO/USDT
Lido DAO (LDO) did not sustain below the 20-day EMA ($2.75) during the recent correction, which is a positive sign. Another bullish sign is the formation of the pennant near the local highs.
The bulls will try to propel the price above the resistance line of the pennant. If they succeed, the LDO/USDT pair could start the next leg of the up-move. The pair may first rise to $3.90 and thereafter attempt a rally to $4.24.
Conversely, if the price turns down from the resistance line, it will suggest that bears are selling on rallies. That could keep the price inside the pennant for a while longer. The bears will have to sink the price below the pennant if they want to signal a short-term trend reversal.
The strong bounce off the support line of the pennant indicates aggressive buying on dips. Buyers will have to overcome the obstacle at the resistance line to regain control. If they do that, the pair may resume its uptrend.
However, the bears are likely to have other plans as they will try to protect the resistance line. If the price turns down from this level, the state of equilibrium may continue for some more time.
A break below the pennant could attract profit-booking by short-term traders. That may tug the price to $2.20 and later to $2.
EGLD/USDT
MultiversX (EGLD) turned down from the resistance line but an encouraging sign is that the bulls are trying to defend the 20-day EMA ($47).
Both moving averages are sloping up and the RSI is above 54, indicating that buyers have a slight edge. The bulls will try to push the price toward the resistance line where they are again likely to face strong opposition from the bears.
This bullish view could invalidate in the near term if the price turns down and plummets below the 20-day EMA. That will indicate selling by the bears on every minor rally. The EGLD/USDT pair could then tumble to the 50-day SMA ($44) and later to $40.
The 4-hour chart shows that the price is falling inside a descending channel pattern. Buyers purchased at lower levels and have pushed the price to the resistance line of the channel. If this resistance gives way, the pair could rise to the 50-SMA and thereafter attempt a retest of the strong barrier at $54.
Contrarily, if the price turns down from the resistance line, it will suggest that the bears have not given up. That could result in a drop toward the support line of the channel.
Related: How does the U.S. Dollar Index (DXY) impact cryptocurrencies? Watch Macro Markets
THETA/USDT
The bulls…
cointelegraph.com