Bitcoin, ATOM, APE, CHZ and QNT are facing resistance at higher levels, but the charts show that the current recovery could drag on for a few more days.
US stock markets rose sharply last week, breaking a three-week losing streak. Last week, the S&P 500 was up 3.65% and the Nasdaq Composite was up 4.14%. Continuing its close correlation with US stock markets, Bitcoin (BTC) also posted a strong comeback, attempting to end the week with a gain of more than 7%.
A strong rally in the stock and crypto markets is showing signs of bottoming out, but it may be too early to predict the start of a new upward movement. Stock markets may remain tight ahead of US inflation data on September 13 and Federal Reserve meetings on September 20-21.
Daily view of cryptocurrency market data. Source: Coin360
In addition to focusing on the stock markets, the cryptocurrency space has its own important events to look forward to. Both the Ethereum merge and the Cardano Vasil hard fork planned for the next few days could increase the volatility of several cryptocurrencies.
While choppy markets increase risk, they can provide short-term trading opportunities for nimble traders. Let’s examine the charts of five cryptocurrencies that look interesting in the short term.
Bitcoin surged above the 20-day exponential moving average (EMA) of $20,662 on September 9, the first sign that selling pressure may be easing. The bears are trying to stop the rally at the 50-day simple moving average (SMA) of $21,946, but fortunately the bulls have not lost much ground.
BTC/USDT daily chart. Source: Trading View
The 20-day EMA is gradually starting to rise and the Relative Strength Index (RSI) is in positive territory, suggesting that the path of least resistance is on the upside. If the bulls push the price above the 50-day SMA, the BTC/Tether (USDT) pair could rise towards the hard upper resistance at $25,211. Bears are expected to actively defend this level.
Another possibility is that the price will deviate from the 50-day SMA. In this case, the pair may fall to the 20-day EMA. This is an important level to look out for as a break and close below could open the doors to a fall to $18,626. Alternatively, if the price recovers from the 20-day EMA, the likelihood of a breakout of the 50-day SMA increases.
4-hour BTC/USDT chart. Source: Trading View
The pair gained momentum after rising above the $19,520 breakout level. A strong rally pushed the RSI into overbought territory, indicating some minor consolidation or correction. Buyers face a major challenge around $22,000, but they didn’t give in to the bears. This suggests that every little dip will be bought.
If the bulls push the price above $22,000, the pair could quickly rise to $23,500 where the bears could again try to stop the upside move.
Contrary to this assumption, if the price reverses and falls below the 20-EMA, the pair could drop to $20,576. A break below this level suggests the pair could consolidate in the main $22,000 to $18,626 range for a while.
Cosmos (ATOM) broke the upper resistance at $13.45 on September 8, indicating stronger demand. The next tough resistance is at $20.30 leaving room for a rally.
ATOM/USDT daily chart. Source: Trading View
Before that, the bears will try to push the price below the $13.45 breakout level. This is an important level to watch as the break and close below suggests that the recent break may have been a bull trap.
On the other hand, if the price rises from current levels or recovers from $13.45, this would mean that the bulls are in control and will buy any dips. If the bulls push the price above $17.20, upside potential could pick up momentum and reach $20.30.
ATOM/USDT 4-hour chart. Source: Trading View
The 4 hours chart shows a sharp rally for the ATOM/USDT pair after breaking the upper resistance at $13.45. This pushed the RSI deep into the overbought zone and initiated a correction, but it is positive that the bulls did not lose much of their positions.
If the price bounces from the current level, the probability increases