US equity markets shrugged off warmer-than-expected labor data on December 2 and quickly recovered from their intraday lows. This suggests that market observers believe that the Federal Reserve may not change its stance of slowing the pace of rate hikes due to the latest jobs data.
However, the FTX crisis has broken the positive correlation between US equity markets and Bitcoin
, the recent strength in equities reflects a risk-on sentiment. This could be favorable for the cryptocurrency space and attract dip buyers.
Crypto market data daily view. Source: Coin360
A broader crypto recovery could pick up steam after more clarity emerges on the extent of the damage caused by the FTX collapse. Until then, bullish price action may be limited to select cryptocurrencies.
Let’s take a look at Bitcoin’s chart and pick altcoins that could be poised to start an up-move in the near term.
Bitcoin has been trading near its 20-day exponential moving average, or EMA, of $16,963 for the past three days. It suggests a fierce battle between bulls and bears to gain supremacy.
BTC/USDT Daily Chart. Source: TradingView
The main hurdle for upside buyers is $17,622. If the bulls lift the price above this level, it will suggest that the downtrend may increase. The BTC/USDT pair could then run up to the psychological level of $20,000. This level could again act as resistance, but if crossed, the pair could reach $21,500.
Conversely, if the price breaks below $17,622 and breaks below the 20-day EMA, it would suggest that the bears have not yet given up. After this the pair may strengthen in a larger range between $15,476 and $17,622.
BTC/USDT 4-Hour Chart. Source: TradingView
Buyers are defending the 20-day EMA on the four-hour chart, but failure to get a strong bounce indicates that demand dries up at higher levels. Bears may try to make the most of this opportunity and drag the price below the moving average. If they manage to do so, the pair could drop to $16,000 and then to $15,476.
On the other hand, if the price rises and breaks above $17,250, a rally to $17,622 is more likely. This level could again act as an important resistance, but if the bulls push the price above it, the pair could reach $18,200.
Toncoin (TON) moved above the symmetrical triangle pattern on November 30, but the bulls could not sustain the higher levels as seen from the long candle on the intraday candle. However, the bulls defended the 20-day EMA ($1.73) on the downside, indicating buying on the downside.
TON/USDT Daily Chart. Source: TradingView
Higher moving averages and Relative Strength Index (RSI) in the positive zone indicate gains for buyers. This improves the chances of a break above the triangle resistance line. If this happens, buying could intensify and the TON/USDT pair could rise to $2.15 and then move towards the pattern target of $2.87.
This positive view may be reversed in the near term if the price once again breaks below the resistance line and falls below the 20-day EMA. This could increase selling pressure and pull the pair towards the 50-day simple moving average ($1.62) and subsequent support line.
TON/USDT 4-Hour Chart. Source: TradingView
Bears are looking to defend overhead resistance at $1.84 while bulls are buying dips to the 20-day EMA. Price is squeezing between two levels and a range may be ripe for a breakout.
If the price breaks above the overhead zone between $1.84 and the downtrend line, it may attract more buying by the bulls. This could initiate a new up-move to $2. An important level to watch on the downside is $1.68 as a break below it could accelerate the drop to the support line.
It broke below the downtrend line on November 30, but the bulls did not allow the price to break below the 20-day EMA ($3.73). This is a positive sign as it indicates lower demand.