Some altcoins like FLOW, THETA, QNT, and MKR could surge if Bitcoin breaks the tough upside resistance at $24,668.
US payroll data for August 5th beat market expectations, suggesting that inflation has not cooled. Strong numbers make it less likely that the Federal Reserve will slow its aggressive pace of rate hikes. Following the release, the probability of a 75 basis point gain in September rose to 68%, according to CME Group.
However, analysts at Fundstrat Global Advisors disagree. They stressed that the S&P 500 bottomed three times out of six in the six months leading up to the Fed’s latest rate hike. As such, the company expects the S&P 500 to stage a strong rally to 4,800 in the second half of the year.
Daily cryptocurrency market data view. Source: Coin360
If the close correlation between stock markets and crypto markets continues, there could be more room for a recovery in crypto markets to get off the ground. On-chain monitoring resource Material Indicators said in a Twitter update Aug. 5 that if Bitcoin (BTC) surges above $25,000, there will be no major resistance in the $26,000-$28,000 range.
Can bitcoin surge above the upper resistance level and extend its recovery by pulling some altcoins higher? Let’s examine the charts of the top 5 cryptocurrencies that can move forward in the short term.
Bitcoin has been trading near the 20-day exponential moving average (EMA) of $22,719 for the past few days, indicating an uphill battle between bulls and bears. Although the bulls held the level, they failed to recover strongly from it. This indicates a lack of demand at higher levels.
BTC/USDT daily chart. Source: Trade View
Both the moving averages have settled and the Relative Strength Index (RSI) is just above the midpoint, indicating a balance between buyers and sellers. The advantage could turn in the buyers’ favor if they push and sustain the price above $24,668.
If they succeed, the BTC/Tether (USDT) pair could rally to $28,000 and then to the next resistance level at $32,000.
Contrary to this notion, if the bears sink the price below the 20-day EMA, the pair could drop to the 50-day SMA (simple moving average) of $21,719. If this support also gives way, the next stop could be an uptrend line.
BTC/USDT on the 4 hour chart. Source: Trade View
On the 4-hour chart, the price is stuck between $22,400 and $23,648. Both the moving averages have settled and the RSI is near the midpoint, indicating a balance between supply and demand. If the bulls take the price above $23,648, the pair could rally to an upper resistance level at $24,668.
Conversely, if the price reverses and falls below $22,400, the short-term advantage will shift in favor of the bears. The pair could then drop to an uptrend line which could become strong support.
Trading in a narrow range in flow (FLOW) was resolved with the range extension on August 4th. This indicates accumulation at lower levels and the start of a fresh move higher.
Daily FLOW/USDT chart. Source: Trade View
The bears are attempting to halt the upside move around $3.00 but the small benefit is that the bulls have not lost much ground. This suggests that traders are in no rush to take profits after the recent rally.
The 20-day EMA at $2.07 has started turning higher and the RSI is near the overbought zone, indicating that the bulls have gained the upper hand. If buyers push the price above the $3.00-$3.30 resistance zone, the FLOW/USDT pair could gain momentum and rally to $4.60.
FLOW/USDT 4 hour chart. Source: Trade View
The pair bounced off the upper resistance near $3.00 but found support at the 20-EMA on the 4-hour chart. If the bulls push the price above $2.80, the pair could retest the upper resistance at $2.99. A break above this level could signal a resumption of the uptrend.
Alternatively, if the price breaks below the 20-EMA, the pair could drop to the 50% Fibonacci retracement of $2.41 and then the 61.8% retracement of $2.27. A break below this level could tip the advantage in bears’ favor and push the pair to $2.00.
Theta Network (THETA) collapsed and was shut down