Major U.S. stock market indexes continued to decline last week as macroeconomic conditions worsened as fears of a global recession rose. The Dow Jones Industrial Average closed at its lowest level in 2022 and major indexes posted their fifth weekly close in the past six weeks.
Although Bitcoin (BTC) is down slightly this week, it risks closing at its lowest level since 2020. While a new multi-year weekly close is a negative sign, sellers must maintain low levels or become a potential bear trap. The next few days of price action may witness higher volatility as both bulls and bears battle for supremacy.
Many investors miss buying opportunities during sharp corrections because they try to catch the bottom. Traders should focus on their favorite projects and accumulate the coins in stages that last for a few weeks or months. Not all coins will go down at the same time, so it is better to focus on individual cryptocurrencies that show strength.
While Bitcoin is nearing annual lows, some altcoins are holding up well. Let’s take a look at the charts of five cryptocurrencies that look interesting in the near term.
Bitcoin bulls successfully defended the $18,626 to $17,622 support zone over the past few days, but continued to experience strong selling at the 20-day moving average ($19,720). This suggests that the bears will continue to sell in minor rallies.
Downward moving averages indicate that bears are dominant, but a positive divergence in the Relative Strength Index (RSI) suggests that bearish momentum may be weakening.
A break and close above the 20-day EMA would be the first sign that the bears might lose their grip. The BTC/USDT pair may rise to the 50-day simple moving average ($21,043) and later to $22,799. Buyers need to break this barrier to set up a rally towards $25,211.
Conversely, if bears sink below the June low of $17,622, selling could intensify and the pair could continue its downtrend. The pair may drop to $14,500.
The bulls are buying the dip below $18,626, but the bears continue to recover in the 50-SMA. This has compressed prices between these two levels, but this tight trade-off is unlikely to continue for long.
If the price declines and holds below $18,626, the bears could pull the pair to critical support at $17,622. This level may again witness a strong battle between the bulls and bears. On the upside, if the bulls push the price above the 50-SMA, the pair may rise to $20,400.
Cosmos (ATOM) has been trading above the $13.46 high for the past several days, indicating that sentiment remains positive and traders are buying on dips.
The 20-day EMA ($14.22) is stretched and the RSI is near the midpoint, indicating a balance between supply and demand. If the price breaks above $15.26, the short-term advantage is tilted to the buyers. The ATOM/USDT pair may rise to $17.20.
This level could once again act as resistance, but if buyers push the price above it, the pair could pick up momentum and move higher towards $20.34 and then $25.
Contrary to this assumption, if the price declines and breaks below the 50-day SMA ($12.90), the upside may favor the bears. The pair can be reduced to $10.
The pair has been stuck between $13.45 and $17 for some time. Buyers have defended the support at $13.45 and are trying to push the price above the 50-SMA. If they do, the possibility of a rally to $16 and then to $17 will increase.
Conversely, if the price declines from the current level and breaks below the 20-EMA, it suggests that bears continue to sell in a rally. That could pull the price to a strong support at $13.45. To clear the way for a move down to $11.50, the sellers need to sink the pair below $13.
The range-bound action uncertainty between $0.27 and $0.38 resolved to the upside on September 23, indicating the start of a new move. If that’s the case, Algorand (ALGO) may still be on the first leg of its rise.
An important level to watch on the downside is $0.38. If the bulls reverse this level to support, it increases the possibility of a new uptrend. The ALGO/USDT pair could rally to $0.45 and later to $0.50.
This bearish view may prove valuable in the near term if the price breaks below $0.38 and re-enters the range. That could sink the price to the 20-day EMA ($0.33). If the price recovers from this level, the bulls will try to clear the barrier again.
The price rose above the overhead resistance at $0.38 but the bulls could not build on this momentum. This shows that the bears have not given up yet and continue to sell in rallies near $0.41.
If the bears drop the price below the 20-EMA, the pair may drop to $0.36. This is a very important level for bulls to defend against because a break below it can fall to the 50-SMA, opening doors.
On the upside, the bulls need to push the price above $0.41 to signal a resumption of bullish activity.
Related: What is scalping in crypto, and how does scalping work?
Chiles (CHZ) recovered significantly from the June lows and the bulls cleared the resistance at $0.26 on September 22, indicating the resumption of the movement. When a coin moves against market sentiment, it warrants a closer look.
The bears have been trying to lower the price below $0.26 for the past three days, but the bulls have held their ground. This shows that the bulls are seeing the dips as a buying opportunity. Rising moving averages and the RSI in positive territory indicate that buyers are in orders.
If the price rises and breaks above $0.28, the CHZ/USDT pair may come to the next strong resistance at $0.33.
Conversely, if the price declines and breaks below $0.26, it suggests that traders may rush to the exit. The pair may first move down towards the 20-day EMA ($0.23) and later towards the 50-day SMA ($0.21).
Both moving averages show gains for buyers, but a negative divergence on the RSI indicates that momentum may be weakening. If the price is bearish below $0.26, the pair may drop to the 50-SMA. This is a key level to protect the bulls because if it gives way, the pair can go down to $0.22.
On the other hand, if the price recovers from $0.26 and goes above $0.28, the move could resume. The pair can rally to $0.32.
Quant (QNT) is showing strength by trading above both moving averages. It managed to charge higher even when the sentiment in the cryptocurrency sector was negative.
The bears have been defending the $112 level for the past several days, but the bulls broke through the resistance on September 24 and pushed the price to the lower line. A long wick on the daily candle indicates that the bears are trying to stop the movement at this level.
A bit positive, the bulls bought back to $112 on September 25, suggesting that buyers are trying to turn this level into support. The QNT/USDT pair may retrace its downward trend line. If this barrier is cleared, the pair may rise to $133 and later to $154.
Alternatively, if the price declines and breaks below $112, the next stop could be the 20-day EMA ($106). A break below this support could pull the pair towards $95.
After breaking above $112, the pair picked up momentum and reached near the low line. This pushed the RSI into overbought territory, which may have tempted short-term traders to take profits.
The price rebounded at $112, indicating that the sentiment remains positive and traders are buying dips. The pair may rise to $121 and then to the lower line. A break below $112 could sink the pair to the 50-SMA and then to $95.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and business activity involves risk, you should do your own research when making a decision.