Bitcoin’s strong recovery to $49,000 has boosted bullish sentiment and it may provide further incentive f
Bitcoin’s strong recovery to $49,000 has boosted bullish sentiment and it may provide further incentive for LUNA, ATOM, XTZ and AXS to rally in the short term.
The sentiment in the crypto markets can change quickly as seen from the Crypto Fear and Greed Index, which has risen from levels of extreme fear on Sept. 30 to neutral today. The sentiment may improve further if Bitcoin (BTC) breaks out and sustains above the psychologically critical level at $50,000.
One important event that may boost short-term sentiment is the U.S. Securities and Exchange Commission’s (SEC) decision on Bitcoin exchange-traded fund (ETF) applications. Although the SEC extended the deadline of four Bitcoin ETF applications by 45 days on Oct. 1, Bloomberg’s senior ETF analyst Eric Balchunas is hopeful that a futures-backed Bitcoin ETF may receive the green signal by the middle of October.
Balchunas said the Bitcoin futures-based ETF applications, which have found support from SEC chair Garry Gensler, “are very much alive and likely on schedule (we think 75% chance approved in Oct).”
If bulls build on the recent strength in Bitcoin and clear the hurdle at $50,000, several altcoins may pick up momentum. Let’s study the charts of the top-5 cryptocurrencies that may outperform in the short term.
BTC/USDT
Bitcoin broke above the 50-day simple moving average ($46,633) on Oct. 1 but the bears are attempting to stall the recovery near the resistance at $48,843.20. However, a positive sign is that bulls have not allowed the price to dip below the 50-day SMA.
The 20-day exponential moving average ($45,141) has turned up and the relative strength index (RSI) is in the positive territory, indicating advantage to the bulls. If buyers push the price above $48,843.20, the BTC/USDT pair could rally to $52,920.
This level may again act as stiff resistance but if bulls bulldoze their way through, the head and shoulders pattern will be invalidated. That could result in a pick-up in momentum and the pair could rise to $60,000.
Contrary to this assumption, if the price turns down from the current level and breaks below the moving averages, it will suggest that higher levels are attracting aggressive selling from the bears. The pair may then drop toward $40,000.
Both moving averages on the 4-hour chart are sloping up and the RSI is near the overbought zone, indicating the path of least resistance is to the upside. The price has been consolidating in a tight range between $47,000 and $48,495 for some time.
If bulls thrust the price above $48,843, the pair could rise to the psychological mark at $50,000 and then challenge the stiff resistance at $52,920.
Conversely, if the price turns down and breaks below the 20-EMA, it will suggest that short-term traders are booking profits. The pair could then drop to $45,000 and later to the 50-SMA.
LUNA/USDT
Terra protocol’s LUNA token broke above the downtrend line on Oct. 2 and bulls followed it up with a break above the all-time high at $45.01 today. However, the long wick on today’s candlestick suggests that bears are attempting to defend the $45.01 level aggressively.
If the price turns down from the current level but rebounds off the downtrend line, it will suggest that the sentiment remains positive and traders are buying on dips.
The bulls will then make one more attempt to push the price above the $45.01 to $46.17 resistance zone and start the next leg of the uptrend. The psychological level at $50 may act as a resistance but if it is crossed, the LUNA/USDT pair may rally to $65.
On the contrary, if the price turns down and breaks below the 20-day EMA ($36.30), the next stop could be the 50-day SMA ($32.97). A break below this support will suggest that the bulls are losing their grip.
Although bulls pushed the price above $45.01, the long wick on the candlestick shows selling at higher levels. The bears are currently attempting to trap the aggressive bulls who may have gone long above $45.01.
The first support on the downside is the 20-EMA. A strong bounce off this support will suggest the sentiment remains positive. The bulls then try to propel the price above $46.17.
Alternatively, a break below the 20-EMA could pull the price down to the 50-SMA. If this support cracks, the pullback may deepen to $33.
ATOM/USDT
Cosmos (ATOM) successfully held the breakout level at $32.32 on Sep. 29, which suggests that sentiment remains positive and bulls are buying on dips.
The bulls pushed the price above the 20-day EMA ($35.88) on Sept. 30 but the momentum has failed to pick up. This suggests that bears have not thrown in the towel yet and are selling on rallies. The bulls will have to thrust and sustain…
cointelegraph.com