The S&P 500 and Nasdaq Composite Index suffered their worst weekly performance since June as investors worried that the Federal Reserve would need to continue aggressive monetary policy to curb inflation, which could trigger a recession in the United States.
Bitcoin (BTC) is closely linked to the S&P 500 and is on track to fall more than 9 percent this week. If this correlation continues, Goldman Sachs strategist Sharon Bell warned it could trigger a 26% drop in the S&P 500.
Many expect the Fed to hike by 75 basis points at its next meeting from September 20 to September 21, but the FedWatch Tool shows an 18% chance of a 100 basis point rate hike. This uncertainty can keep traders on edge, increasing short-term volatility.
If the Fed’s rate hikes are in line with market expectations, select cryptocurrencies could attract buyers. Let’s study the charts of five cryptocurrencies that are positive in the near term.
Bitcoin bounced back from $19,320 on September 16 and rallied above $20,000 on September 17, but the bulls are struggling to sustain higher levels. This shows that bears are highly active.
The 20-day exponential moving average ($20,432) has gradually fallen and the Relative Strength Index (RSI) is in the negative zone, indicating that sentiment remains negative and traders are selling above resistance levels.
If the price is low and breaks below $19,320, the BTC/USDT pair may drop to $18,510. Buyers are expected to defend this level effectively.
On the upside, the 50-day simple moving average ($21,605) is a key level to watch. If bulls push the price above it, the pair could rally to $25,211. A break and close above this resistance could signal the start of a new uptrend.
The 4-hour chart shows that the sellers are trying to stop the recovery at the 20-EMA. This indicates that the bears are in no mood to surrender their advantage. If the weakness continues and the price breaks below $19,320, the pair could slide towards $18,510.
On the contrary, if the price breaks from the current level and breaks above the 20-EMA, the recovery can reach up to the 50-SMA. This level can again be used as a resistance but if this barrier is cleared, the next stop could be the 61.8% Fibonacci retracement level at $21,470.
Ripple (XRP) has been stuck in the range between $0.30 and $0.39 for several days. The price has reached the resistance of the range and if the bulls clear this barrier, it could signal the beginning of a new uptrend.
In a range, traders usually buy near the support and sell towards the resistance. If the price declines significantly from the current level and breaks below the moving average, this indicates that the consolidation of the XRP/USDT pair may be extended for a few days.
Although the moving averages are crossing each other, the RSI has jumped into positive territory, indicating that the bulls have a slight edge. If buyers drive above $0.39, the pair could rise to $0.48.
The pair has mixed sharply from $0.32 to $0.39, which indicates strong buying by bulls. The 20-EMA has reversed and the RSI is in the positive zone, indicating that the path of least resistance is up.
If the price continues higher and breaks above $0.39, the momentum may pick up and the pair may rally to $0.41. This level could act as resistance but if buyers break the $0.39 level into support, the move could resume.
Chainlink (LINK) has been stuck in a large range between $5.50 and $9.50 for the past several weeks, indicating that buyers are trying to establish a bottom. The bulls pushed the price above the moving averages and the RSI jumped into positive territory indicating that the positive momentum may be improving.
There is a small resistance at $8.30 and if the bulls push the price above it, the LINK/USD pair may rally to strong resistance at $9.50. This level may attract aggressive selling by bears, but if bulls break through the wall, this may signal the start of a new uptrend.
Moving averages are the important support to watch on the downside because if they give way, the selling pressure can be lifted. That could start to drop to $7 and then to $6.20.
Buyers are trying to protect the moving averages on the 4-hour chart. That could start a recovery of resistance to the upside at $8.20. If the price rises above this upper resistance, the pair may rally to $9.
If the bulls fail to push the price above $8.20, the bears may wish their luck and dip the pair below the moving average. That tilts the advantage to the bears. The pair may drop first to $7.50 and then to $7.
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Bears pulled EOS below the 50-day SMA ($1.44) on September 15 but failed to break the support at $1.34. This indicates that bulls are buying the dips and trying to establish a low near $1.34.
A slight downside is that bulls are facing strong resistance at the 20-day EMA ($1.50). This indicates that the bears have not given up and are trying to control. This tussle between the bulls and the bears could resolve with a strong breakout.
If the price breaks above the 20-day EMA, the momentum may rise and the EOS/USDT pair may rally to $1.86. Alternatively, if the price declines and breaks below $1.34, the pair may decline to $1.24. A break below this support could sink the pair to $1.
The rebound weakened to around $1.50, indicating bears continue to sell into rallies. The bears will try to strengthen their upside by pulling the price below the strong support at $1.34, but that may not be easy.
Buyers have defended the $1.34 level on three occasions and will attempt to do so again. If the price recovers from $1.34, the bulls may retest resistance above $1.50. If you can do that, a rally to $1.70 and then $1.86 is possible.
Tezos (XTZ) broke below the 20-day EMA ($1.57) on September 13, but the bears failed to pull the price to the symmetric triangle support line. This indicates that buyers are accumulating on the dips and not waiting for a deep correction to enter. This increases the chance of recovery in the near future.
If the price breaks above the 20-day EMA, the XTZ/USDT pair may move higher towards the 50-day SMA ($1.66). This level has served as strong resistance on the previous two occasions, so it is an important level to watch. If the bulls overcome this obstacle, the pair may try to rally into a triangle defensive line.
A break above the triangle indicates a possible trend reversal. The pair may then rise to $2 and later to $2.36.
Meanwhile, the bears may have other plans. They try to stop the recovery on the moving averages. If the price declines from current levels and slips below the $1.50 to $1.40 support zone, the June low at $1.20 could be revisited.
The 4-hour chart shows that the bulls defended the support at $1.50 and pushed the price above the low line, but could not continue the higher levels. If the bearish price is below $1.50, the pair may drop to $1.40.
On the other hand, if the price recovers support from $1.50, it suggests that lower levels will continue to attract buyers. The bulls will try to push the price above the moving averages and challenge the resistance at $1.62. If this level gives way, an upward move could reach $1.70.
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.