Bitcoin and altcoins followed stocks slump after hawkish comments from the Federal Reserve confirmed the central bank is serious about cutting inflation.
Federal Reserve Chair Jerome Powell warned that the central bank would continue to actively use “tools” to bring down inflation, which is near its highest level in 40 years. He warned the restrictive policies could continue for some time, warning that they “could cause some pain to households and businesses”.
US stock markets reacted negatively to Powell’s comments, and the Dow Jones Industrial Average fell more than 600 points. Cryptocurrency markets have also seen heavy selling from Bitcoin (BTC) and most altcoins, which threatened to fall below their immediate support levels.
Cryptocurrency market daily indicators. Source: Coin360
In addition to a not-so-favorable macro environment, Bitcoin’s historical data for September also paints a negative picture. According to CoinGlass data, Bitcoin fell an average of 6% in September, and apart from 2015 and 2016, the month between 2013 and 2021 delivered negative returns for investors.
Can Bitcoin and Major Altcoins Stay Weak Anytime Soon? Let’s examine the charts of the top 10 cryptocurrencies to find out.
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Bitcoin’s shallow bounce off the uplink support line suggests bulls are cautious at higher levels. The descending 20-day exponential moving average (EMA) ($22,249) and the Relative Strength Index (RSI) in negative territory are suggesting that the bears are gaining the upper hand.
BTC/USDT daily chart. Source: Trade View
Strong selling brought the price below the rising channel on August 26th. If the bears sustain the price below $20,762, selling could pick up and the BTC/USDT pair could drop to $18,900. This level could serve as strong support again, but if broken, the decline could extend to the June 18 intraday low of $17,622.
This negative view will be invalidated in the near term if the price increases from the current levels and breaks the 50-day simple moving average (SMA) ($22,414). Such a move would suggest that lower levels will continue to attract buyers. The pair can then attempt to move up to the resistance line of the channel.
Buyers failed to push Ether (ETH) above the 20-day EMA ($1,697) on Aug. 25, suggesting that the bears are vigorously defending this level.
Daily ETH/USDT chart. Source: Trade View
Selling gathered momentum and the bears dragged the price below the 50-day SMA ($1,588). A close below this support could drop ETH/USDT to $1,500. If the price breaks below this key support, the pair will complete a bearish head and shoulders pattern. Target for this setup is $1,050.
Contrary to this assumption, if the price bounces off the $1,500 support, the bulls will revisit the false barrier at $1,700. If they succeed, it would mean that the pair could rally to the upper resistance at $2,000.
The bulls pushed BNB above the 20-day EMA ($300) on Aug. 25, but the long wick on the candle suggests the bears are selling at higher levels.
BNB/USDT daily chart. Source: Trade View
On August 26, the price turned down and the bears are attempting to sink the price below the next support at $275. If successful, BNB/USDT could complete the bearish head and shoulders pattern. This could lead to a drop to $240 and then the $212 target.
On the other hand, if the price surges and surpasses $308, it could surprise aggressive bears. The pair could then rise to an upper resistance level of $338. If the bulls clear this hurdle, the pair will complete the bullish inverse head and shoulders pattern.
The bulls took Ripple (XRP) above the moving averages on Aug. 26, but the long wick on the candle suggests strong selling at higher levels.
Daily XRP/USDT chart. Source: Trade View
The price has clearly turned down and the bears are attempting to sink the XRP/USDT pair below the immediate support at $0.33. If they succeed, the next stop could be the critical support at $0.30. A break and close below this level may indicate a resumption of the downtrend.
If the price is alternatively $0.30