Major US stock market indices extended their decline last week, as worsening macroeconomic conditions raised fears of a global recession. The Dow Jones Industrial Average closed at its lowest level in 2022, with the major indexes posting their fifth weekly close in the past six weeks.
While Bitcoin (BTC) is down only marginally this week, it risks closing at its lowest level since 2020. Although the new multi-year weekly close is a negative sign, sellers will need to maintain lower levels or it could turn to a bearish trend. be a bear trap. Price action over the next few days is likely to see increased volatility as both bulls and bears battle for dominance.
Daily display of cryptocurrency market data. Source: Coin360
Some investors miss buying opportunities during sharp corrections because they are trying to catch the bottom. It is best for traders to focus on the projects they love and collect coins in stages, over several weeks or months. Not all coins go down at the same time, so it’s best to focus on individual cryptocurrencies that are showing strength.
While Bitcoin is nearing its annual low, some altcoins are holding up quite well. Let’s take a look at the charts of five cryptocurrencies that look interesting in the short term.
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Bitcoin / US Dollar
Bitcoin bulls have successfully defended the $18,626-$17,622 support area in recent days, but are still facing a strong sell off of the 20-day exponential moving average (EMA) at $19,720. This indicates that the bears continue to sell on smaller rallies.
BTC/USDT Daily Chart. Source: TradingView
The descending moving averages indicate that the bears have the upper hand, but a positive RSI divergence indicates that the bearish momentum may be waning.
A breakout and a close above the 20-day moving average would be the first sign that the bears might be losing their grip. The BTC/Tether (USDT) pair could rise to the 50-day simple moving average (SMA) of $21,043 and then to $22,799. Buyers need to overcome this barrier to clear the way for a rally to $25211.
Conversely, if the bears push the price below the June low of $17,622, selling could pick up and the pair could resume its downtrend. The pair could then fall to $14,500.
BTC/USDT on the 4-hour chart. Source: TradingView
The bulls are buying on dips below $18,626, but the bears continue to limit recovery at the 50-SMA. This has pushed the price between these two levels, but this tight trade is unlikely to last long.
If the price turns lower and settles below $18,626, the bears could pull the pair towards the vital support at $17,622. This level could once again witness a fierce battle between bulls and bears. On the other hand, if the bulls push the price above the 50-SMA, the pair could rise to $20,400.
ATOM / USDT
Cosmos (ATOM) has traded above the breakout level of $13.46 in recent days, indicating that sentiment remains positive and traders are buying on dips.
ATOM/USDT daily chart. Source: TradingView
The 20-day moving average of $14.22 has flattened and the RSI is approaching the midpoint, indicating a balance between supply and demand. If the price rises above $15.26, the short-term advantage could tilt in favor of the buyers. Then the ATOM/USDT pair could rise to $17.20.
This level could act as resistance again, but if buyers push the price above it, the pair could gain momentum and rise to $20.34 and then to $25.
Contrary to this assumption, if the price turns lower and breaks below the 50-day SMA of $12.90, the advantage may be skewed in favor of the bears. The pair can then go down to $10.
ATOM/USDT 4-hour chart. Source: TradingView
The pair is stuck between $13.45 and $17 for a while. Buyers strongly defended the support at $13.45 and are trying to push the price above the 50-SMA. If they do, chances are it will go up to $16 and then $17.
Conversely, if the price deviates from the current level and breaks through the 20-EMA, this means that the bears continue to sell on the rallies. This could push the price towards a strong support at $13.45. Sellers need to push the pair below $13 to make room for a possible drop to $11.50.