Bitcoin, altcoins and stock price action reflect investor concerns over the Fed’s rate hike plans, bear market easing and this week’s Jackson Hole Economic Symposium.
European and US equity markets are deep red on August 22 as investors fear aggressive rate hikes will not be dismissed from the agenda.
Another source of concern for investors could be the upcoming Jackson Hole Economic Symposium, which is scheduled to begin on August 25. Investors are concerned that Federal Reserve Chair Jerome Powell could extend the Fed’s hawkish stance and plans for future rate hikes.
This macro uncertainty is keeping institutional investors away from the cryptocurrency markets. Data from CoinShares showed that crypto investment products recorded $1 billion in weekly volume, down 55% from the annual average.
Cryptocurrency market daily indicators. Source: Coin360
On-chain analytical resource Material Indicators reported that Bitcoin (BTC) has failed to break below its July lows. This suggests that the bear market rally is not over yet. However, buyers need to push the price above the 200-week moving average of around $23,000 to gain the upper hand.
Can Bitcoin and most major altcoins rally sharply over the next few days, and what are the critical levels to look out for? Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Buyers defended the support line of the rising channel on Aug 19 and started a rally, but the rally stalled at $21,800. This suggests that the bears are creating a strong problem near the moving averages.
BTC/USDT daily chart. Source: Trade View
As a small positive note, the long tail of the August 22nd candle shows that the bulls are vigorously trying to defend the support line. If the bulls push the price above $21,800, BTC/USDT could rally to a 20-day exponential moving average (EMA) of $22,725.
If the price breaks down from this resistance, it would indicate that sentiment has turned negative and traders are selling on the upside. This may increase the likelihood of a breakout below the channel. In that case, selling momentum could pick up and the pair could drop to the June 18 low of $17,622.
Conversely, if buyers push the price above the 20-day EMA, it would mean that the pair could extend its stay in the channel by a few days. The bulls will then try to push the price towards the channel resistance line.
Ether (ETH) fell below the 20-day EMA ($1,718) and the breakout of $1,700 on Aug. 19, suggesting traders who bought at lower levels were exiting their positions.
Daily ETH/USDT chart. Source: Trade View
The bulls attempted to halt the decline at the 50-day SMA ($1,549), but a weak rebound from it suggests no aggressive buying at this level. This increases the likelihood of a break below the support level.
If this happens and the ETH/USDT pair breaks below $1,500, selling might increase as the bulls might wait for the price to reach the next strong support before buying again. Thus, the pair could drop to $1,280.
Conversely, if the price bounces off the current level and scales above the 20-day EMA, traders who have not bought at the 50-day SMA can buy aggressively to avoid missing out on the rise. This could push the price towards $2,000.
Binance Coin’s (BNB) bounce off the strong support at $275 is facing stiff resistance at the 20-day EMA ($301), but the small benefit is that the bulls have not given in to the sellers. This suggests that buyers expect the recovery to continue.
BNB/USDT daily chart. Source: Trade View
If the price scales above the 20-day EMA, BNB/USDT could rally to the upper resistance at $338. This is an important level to watch as a break and close above it will complete a bullish inverse head and shoulders pattern. This setup has a model target of $493.
This may not be a direct run to the target as the bears could attempt to stop the rally at $420 and then pull back to $460.
On the other hand, if the price deviates from the current level and falls below $275