In the past week, the S&P 500 ended its four-week rallyafter what Fed July meeting minutes hinted that central bank rate hikes will continue until inflation is controlled. Fed members said there was no evidence inflationary pressures are easing..
Another factor that slowed the rise was the statement by the president of the St. Louis FedJames Bullard, who said he would support a 75 basis point rate hike at the September policy meeting. This dampened hopes that the era of aggressive rate hikes might be over.
Weakening sentiment sent the S&P 500 down 1.29% for the week. Following its close correlation with the S&P 500, the price of bitcoin (BTC) also presented a significant drop on August 19 and is likely to end the week with heavy losses.
Will the bulls take advantage of the dips to accumulate at lower levels? If they do, let’s study the charts of the top 5 cryptocurrencies that may attract buyers due to their bullish setups.
Bitcoin price fell below the 20-day exponential moving average ($22,864) on August 17 and then below the 50-day simple moving average ($22,318) on August 19. The bulls are trying to stop the decline at the support line of the ascending channel.
The 20-day EMA has started to turn down and the RSI is in the negative territory, which indicates advantage for the bears.. If the price reverses the direction of the moving averages, it will suggest that the bears are selling on the rallies.
That could increase the chance of a break below the support line of the channel.. If this happens, the crucial support zone at $18.626 to $17.622 can be attacked.
To avoid this situation, the bulls will have to push and sustain the price above the moving averages. If they do, the BTC/USDT pair could rally towards the resistance line of the channel.
Buyers are aggressively defending the support line of the channel, but falling moving averages and the RSI in negative territory suggest that higher levels are likely to attract selling from the bears.
If the price turns down from the current level or the 20-EMA, the probability of a break below the channel increases. If this happens, the bearish momentum could increase and the pair could drop towards $18.626.
The first sign of strength will be a break above the 20-EMA. This movement will indicate that the selling pressure is reducing. This could improve the prospects for a rally towards the 50-SMA.
Binance Coin (BNB) turned down from the overhead resistance at $338, but the bulls successfully defended the important support at $275. This indicates a positive sentiment as the bulls are viewing dips as a buying opportunity.
The recovery may find resistance at the 20-day EMA ($301). If the price turns down from this level, the bears will once again try to drop the BNB/USDT pair below $275. If this happens, it will suggest that the pair may range in a wide range between $183 and $338 for some time.
On the contrary, If the bulls push the price above the 20-day EMA, the pair could rally to $338. If it breaks and closes above this level, a bullish head and shoulders pattern could be completed. This could start a rally to $413 and then to the pattern target of $493.
The 20-EMA on the 4-hour chart has started to turn higher and the RSI is close to the midpoint, indicating that selling pressure may be easing.. If the price sustains above the 20-EMA, the pair could go up to the 50-SMA. If it breaks and closes above this resistance, it could increase the chance of a rally to $338.
Conversely, if the price turns down and breaks below the 20-EMA, the pair could drop back to the critical support at $275.. If this level breaks, the pair will complete a bearish head and shoulders pattern and drop towards $240.
EOS has formed a bullish inverse head and shoulders setup. The buyers pushed the price above the resistance at $1.46 on Aug 17, but the long wick on the daily candle shows significant selling at higher levels.
The bears pushed the price back below the breakout level of $1.46 on Aug 19, but the positive sign is that the buyers did not allow the EOS/USDT pair to sustain below the 20-day EMA ($1.32). This indicates that lower levels are attracting buyers.
If the bulls sustain the price above $1.46, the positive momentum could pick up and the pair could rally as high as $1.83.. If this resistance is also broken, the rally could extend to the $2.11 pattern target.
This positive view could be invalidated if the price turns down and breaks below $1.24.. In that case, the pair could drop to the 50-day SMA ($1.17).
The rally above $1.46 on Aug 17 brought the RSI on the 4-hour chart to overbought levels.. This may have tempted short-term buyers to take profits, driving the price to the important support at $1.24. The bulls bought the dip to this level and have pushed the pair back above the $1.46 hurdle.
The pair could now rise to $1.56 and then to the important resistance at $1.83. On the other hand, if the price turns down from the current level and breaks below the moving averages, the pair could remain range bound for a few days.
Billions of QNT/USDT
The series of higher highs and higher lows suggests that Quant (QNT) is in a short-term uptrend. The bulls bought the dip to the 50-day SMA ($100) and are attempting to resume the move higher.
If the price sustains above the 20-day EMA ($111), it will suggest that the correction may be over.. The QNT/USDT pair could first rally to $124 and then retest the important resistance at $133. If the bulls break through this hurdle, the pair could rally to the upper $154-$162 resistance zone.
On the contrary, if the price fails to hold above the 20-day EMA, it will indicate that traders may close their positions on rallies. The bears will have to drop the price below $98 to gain an advantage and signal the start of a deeper correction towards $79.
The pair has been correcting within a descending wedge pattern. The buyers pushed the price above the resistance line of the pattern but could not sustain the breakout. This suggests that the bears are active at higher levels.
If the price sustains below the 50-SMA, the pair could slide down to the 20-EMA. This is an important level to be aware of. If the price bounces off this level, it will suggest that the short-term trend has changed in favor of the buyers.
If it breaks out and closes above $118, it could indicate that the corrective phase is over.. Conversely, if the price breaks below the 20-EMA, the pair could drop to $100.
Chiliz (CHZ) spiked to $0.23 on Aug 18, leading the RSI into overbought territory.. This may have tempted short-term traders to take profits, driving the price back below the breakout level of $0.20.
A small silver lining is that the bulls are attempting to defend the 20-day EMA ($0.17) and push the price back above $0.20.. If they do, this will suggest that sentiment remains positive and traders are buying on dips. This increases the probability of retesting $0.23. If the bulls get past this hurdle, the CHZ/USDT pair could pick up momentum and rally to $0.26.
On the contrary, if the price does not break above $0.20, the bears will sell on the rallies. The bears will take the reins again if they take the pair below the 20-day EMA. Then the pair could drop to the 50 day EMA ($0.13).
The bulls are trying to defend the uptrend line, but the recovery is facing strong resistance at the moving averages. The moving averages have completed a bearish crossover on the 4-hour chart and the RSI is in negative territory, indicating a minor upside for sellers..
If the price turns down and breaks below the uptrend line, the selling could intensify and the pair could drop to $0.16 and then $0.14. This move will indicate that the bears remain in control.
Instead, If the price breaks above the moving averages, the bulls will try to push the pair to $0.21 and subsequently challenge the resistance at $0.23.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.