208 Interactions, 4 Today
Bitcoin’s consolidation near $50,000 reflects a stable market, which may encourage buyers to altcoins such as ADA, LUNA, VET, and XTZ.
On August 27, US Federal Reserve Chair Jerome Powell stated that the central bank will begin tapering its $120 billion monthly bond purchases by the end of the year, but interest rate hikes will have to wait until the job market and inflation pass a more strict test.
In response to the speech, the US dollar index (DXY) plummeted, the S&P 500 index jumped to a new all-time high, and Bitcoin (BTC) surged about $1,500 in less than an hour. This demonstrated that market participants regarded the speech as “dovish.”
Analysts are divided regarding Bitcoin’s short-term directional trend as it approaches $50,000. Analyst Ryan Clark believes the current Bitcoin consolidation is comparable to the one occurred below $24,000 prior to the breakthrough in December 2020, but TraderXO predicts BTC will correct to the $39,000 to 42,000 zone in September.
Will Bitcoin’s consolidation below $50,000 entice investors to buy altcoins? Let’s have a look at the charts of the top five cryptocurrencies that could outperform in the next days.
Bitcoin bounced off the 20-day exponential moving average ($46,823) on Aug. 27 but the bulls have not been able to push the price above the overhead resistance zone at $50,000 to $50,500. This suggests that bears have not thrown in the towel yet.
If the price falls from its present level and falls below the 20-day EMA, it indicates that short-term traders are taking profits. This might reduce the price to $43,927.70, then to $42,451.67.
If the price bounces off this support, the BTC/USDT pair could stay range-bound between $42,451.67 and $50,500 for a few more days.
Alternatively, if the price rises from its current level or bounces off the 20-day EMA, the bulls will attempt to push it over the overhead zone once more. If they succeed, the two may be able to begin their quest towards $60,000.
The 4-hour chart’s moving averages have flattened out, and the relative strength index (RSI) is near the midway, indicating range-bound behaviour in the near term. For the time being, the price will likely remain between $46,200 and $49,500.
If the price rises above $49,500, the pair may test the $50,500 resistance. A break and closing above this level could indicate the beginning of the next leg of the uptrend. On the other hand, if bears push the price below $46,200, the pair might fall to $44,000.
Cardano (ADA) is currently consolidating between $2.97 and $2.47. The price had dropped to the breakout level at $2.47 on Aug. 26 but the sharp rebound off it on Aug. 27 shows that bulls have flipped the level into support.
A consolidation near the all-time high is a good indication since it demonstrates that traders are still buying on dips. Both moving averages are sloping upwards, and the RSI is approaching overbought zone, indicating that the path of least resistance is to the upside.
The ADA/USDT pair could restart its ascent if buyers drive and sustain the price above the psychological barrier of $3. On the upside, the next goal is $3.50.
In contrast to this notion, if the price falls from the $2.97 to $3 resistance zone, the pair could stay inside the range for a few more days. A close below $2.47 indicates that the bullish impetus has faded.
The 4-hour RSI has established a bearish divergence, indicating that the rising momentum is fading. If bears continue to knock the price below the 50-simple moving average, the pair might fall to $2.47.
A robust bounce off this support level might keep the pair range-bound between $2.47 and $2.97 for a while. To gain the upper hand, the bears must lower the price below the $2.47 to $2.31 support zone. Alternatively, if bulls drive and sustain the price over $2.97, the upswing may restart.
Terra protocol’s LUNA token is in a strong uptrend. After a few days of consolidation, the price rebounded off the 20-day EMA ($26.42) on Aug. 27, indicating that the sentiment remains positive.
The bulls have the upper hand, as seen by the upsloping moving averages and the RSI in overbought territory. The first upside target aim is a move to $43, and if that level is surpassed, the LUNA/USDT pair may rally to $50.
The extended wick on today’s candlestick, on the other hand, implies that bears are defending the overhead resistance vigorously. If bears push the price below $32, the pair might fall to the 20-day moving average.
This is a crucial level for the bulls to protect. A solid bounce off it indicates that the uptrend is still in place, however a break below the 20-day EMA indicates that the bullish impetus has faded.
The 4-hour chart shows a broadening triangle formation which indicates an increase in volatility. The buyers had pushed the price above the triangle but they could not sustain the breakout, suggesting aggressive selling by the bears at higher levels.
If the price bounces off the 20-EMA, the bulls will make another effort to break through the overhead barrier. If bulls keep the price above the triangle, it might signify a return of the uptrend. This setup’s pattern objective is $46.95.
Alternatively, if the price breaks below the moving averages, the pair may fall below the triangle’s support line. A break and closing below this support level will indicate that the bears have beaten the bulls. The pair could then fall to the $22.40 to $20.81 support area.
After the sharp recovery from its recent lows at $0.05 on July 21, VeChain (VET) has formed a pennant. This setup will complete after the price breaks above or below the formation.
The 20-day EMA ($0.11) has flattened out, and the RSI has dipped near to the midway, indicating a supply-demand equilibrium. A breakout and closure above the pennant’s resistance line will indicate that the uptrend has resumed.
The first upward target aim is a move to $0.16, and if this level is surpassed, the VET/USDT pair could rally to $0.19.
If the price falls below the pennant’s support line, the bullish view will be invalidated. The pair could then fall to the 50-day simple moving average ($0.09).
The price is being squeezed inside the triangle on the 4-hour chart. Both moving averages are flat, and the RSI is barely below the midpoint, indicating that neither the bulls nor the bears have a clear advantage.
The 50-SMA is providing significant opposition to the rebound off the support line. If the price falls from its current level, the bears will attempt to push the pair below the support line. If they are successful, the pair may fall to $0.082.
If bulls force the price over the 50-SMA, the pair may attempt the resistance line. A break and closing above this resistance level could signify the start of a new uptrend.
Tezos (XTZ) completed a rounding bottom pattern when the price broke and closed above the overhead resistance at $4.47. This suggests the start of a new uptrend that has a pattern target at $6.85.
After the price breaks out of a setup, it usually retests the breakout level. In this event, the XTZ/USDT pair might go as low as $4.47. If bulls convert this level to support, it will signal the beginning of a fresh rally. The rising 20-day EMA ($4.25) and an RSI in the overbought zone indicate a buyer’s edge.
In contrast to this notion, if the price falls from its current level and falls below the 20-day EMA, it indicates that supply outweighs demand. This might capture multiple aggressive bulls, resulting in a drop to the 50-day simple moving average ($3.31).
The 4-hour chart shows that the pair gained momentum after breaking through the $4.47 resistance level. Both moving averages are sloping upward, and the RSI is approaching overbought territory, indicating that bulls have the upper hand.
The pair might rally to the overhead resistance zone of $6.31 to $6.50, where bears could put up a hard fight. A break and closing below the 20-EMA will be the first warning of weakness. This might pave the way for a drop to the breakthrough level of $4.47.