US stock markets rallied sharply last week, ending a three-week losing streak. The S&P 500 rose 3.65% last week, while the Nasdaq Composite rose 4.14%. Continuing its close correlation with the US equities markets, Bitcoin (BTC) has made a strong comeback and is looking to end the week with a gain of over 7%.
The sharp rally in stock markets and cryptocurrency markets are showing signs of a bottom formation, but it may be too early to predict the start of a new bull run. Stock markets are likely to remain on edge ahead of US inflation data on September 13 and the Federal Reserve meeting on September 20-21.
Along with taking cues from the stock markets, the cryptocurrency space has its own important events to look forward to. In the next few days, both the Ethereum merger and Cardano’s (ADA) Vasyl hard fork could increase volatility in several cryptocurrencies.
Although broken markets increase the risk, they can also provide short-term trading opportunities to advance traders. Let’s study the charts of five cryptocurrencies that look interesting in the near term.
BTC/USDT
Bitcoin rose above its 20-day moving average ($20,662) on September 9, the first indication that the selling pressure may be easing. The bears are trying to stop the recovery at the 50-day simple moving average ($21,946), but a positive sign is that the bulls have not given much space.
The 20-day EMA has started a gradual upward trend and the Relative Strength Index (RSI) is in positive territory, indicating that the path of least resistance is up. If bulls push the price above the 50-day SMA, the BTC/USDT pair could rally to a strong upside resistance at $25,211. The bears are expected to defend this level effectively.
Another possibility is that the price drops below the 50-day SMA. If that happens, the pair may drop down to the 20-day EMA. This is an important level to watch as a break and close below it could open the doors to a drop to $18,626. Alternatively, if the price bounces back from the 20-day EMA, it will add a break above the 50-day SMA.
The pair picked up momentum after breaking above the $19,520 breakout level. The sharp rally pushed the RSI into overbought territory, suggesting a slight consolidation or correction. Buyers faced a tough challenge of nearly $22,000 but did not surrender the land to the bears. This means that every little dip is being bought.
If the bulls enter the price above $22,000, the pair may quickly rally to $23,500, where the bears may try to stop the move again.
Contrary to this assumption, if the price declines and breaks below the 20-EMA, the pair may drop to $20,576. A break below this level suggests that the pair could consolidate between $22,000 and $18,626 for some time.
ATOM/USDT
Cosmos (ATOM) broke above the $13.45 profit resistance on September 8th, which shows the demand at higher levels. The next strong resistance is at $20.30, which provides room for a rally.
However, before that, the bears will try to pull the price below $13.45. This is an important level to watch because a break and a close below it indicates that the recent breakout could be a bull trap.
On the other hand, if the price breaks above the current level or retraces $13.45, it suggests that bulls are in control and will buy on every dip. If the bulls push the price above $17.20, the momentum of the move will increase and it could reach $20.30.
The 4-hour chart shows that the overhead resistance of the ATOM/USDT pair has risen above $13.45. That pushed the RSI into the overbought range and a correction has begun, but the positive sign is that the bulls haven’t given up much ground.
If the price recovers from the current level, a break above $17.20 will increase. If that happens, the move could continue and the pair could rally towards $20.30.
If the price continues lower and stays below the 20-EMA, this bullish view may be worth it in the near term. If that happens, the pair may decline to the 50% Fibonacci retracement level at $14.36.
APE/USD
ApeCoin (APE) bounced back strongly from the support at $4.17, indicating strong buying at lower levels. This suggests that the correction phase may be coming to an end, making it an interesting candidate for the short term.
On September 9, buyers pushed the price above the 20-day EMA ($5) and the APE/USDT pair formed a doji candlestick pattern on September 10. to the 50-day SMA ($5.85). The bears may try to stop the recovery at this stage.
If the price declines from the current level but the 20-day EMA rebounds, it indicates that the sentiment has turned positive and traders are buying on the dips. The bulls will again try to drive the price above the 50-day SMA. If they do that, the pair could rise above the upside resistance at $7.80.
This bullish outlook could prove valuable in the near term if the price declines and breaks below the 20-day EMA. If so, the pair could drop to $4.17.
The 20-EMA on the 4-hour chart has begun to show and the RSI has risen into overbought territory. This indicates that the bulls are dominant, but a short-term pullback is possible.
If the price declines from the current level but recovers to $5.30, it would indicate strong demand at lower levels. The bulls will make another attempt to push the price above $5.83 and extend the recovery to $6.44.
Alternatively, if the price declines and breaks below the 20-EMA, the upside could favor the bears.
Related: Terra back from the dead? The price of LUNA will increase by 300% in September
CHZ/USD
Chiles (CHZ) broke above the 20-day EMA ($0.20) on September 9, the first indication that the correction phase may be over. Therefore, this token is included in the list.
The bears tried to pull the price below the 20-day EMA on September 10, but the bulls held their ground. Buyers are trying to push the price to the upside resistance at $0.26, but the move may face strong headwinds near $0.23.
If the price declines but does not fall below the 20-day EMA, it increases the possibility of a rally to $0.26. Contrary to this assumption, if the price declines and breaks below $0.20, it indicates that bears are highly active. That can take the price to the 50-day SMA ($0.18).
The 4-hour chart shows that the bears are protecting the bottom line. If the price drops from the current level but compares to the moving averages, it suggests that the bulls are trying to make a comeback.
Buyers will again try to drive the price above the lower line. If successful, the pair could begin its northward journey towards $0.23 and later $0.26.
Alternatively, if the price is below $0.20, it suggests that the pair may remain in a falling wedge pattern. This can lower the price to $0.18.
QNT/USDTB
Quant (QNT) did not break below the strong support at $87.60, indicating that the sentiment is positive and bulls are buying on dips. This is the reason why it was chosen.
A sharp rebound from $87.60 on September 8 broke above the 20-day EMA ($100), the first indication that the correction phase may be over. The bears made a strong challenge around the 50-day SMA ($105) but failed to recover the price below the 20-day EMA.
This indicates that the sentiment has turned positive and the bulls are buying the dips. Buyers pushed the QNT/USDT pair above the 50-day SMA on September 11. If bulls hold higher, the pair may rise to $117 and then $124. A break above this level could open the doors to a rally towards $130.
This bullish view may be rejected if the price declines and breaks below the 20-day EMA. If that happens, the pair could drop to a strong support at $87.60.
The 4-hour chart shows that the pair has rebounded sharply from the support at $87.60. The bears posed a tough challenge around $108, but the positive sign is that the bulls bought the dip towards the 20-EMA. This indicates that traders are seeing the dips as a buying opportunity.
Buyers continued to recover, pushing the price above the $108 overhead resistance. The pair could rally to $113 and later to $117. On the contrary, if the price declines and falls below the 20-EMA, the pair may move down to the 50-SMA.
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