Bitcoin managed to bounce off a critical support and if the higher levels sustain, FTT, XTZ, KCS and HNT could attract buyers.
Bitcoin (BTC) is threatening to drop to its worst weekly close since December of 2020. The crypto markets are in are held firmly in a vice grip, and the selling accelerated following a higher-than-expected inflation report from the United States on June 10.
It is not only the crypto markets that are facing the brunt, even United States equities markets finished the week ending June 10 with sharp losses. Risky assets may remain volatile in the near term as traders await the outcome of the U.S. Federal Open Market Committee meeting on June 14 and June 15.
Bloomberg Intelligence senior commodities strategist Mike McGlone warned that if the stock markets continue to drop, then it will signal that most assets may have seen their peak exuberance in the past two years.
Could Bitcoin find support at lower levels and will that attract buying in select altcoins? Let’s study the charts of the top-5 cryptocurrencies that are likely to move up if the sentiment improves.
BTC/USDT
Bitcoin broke below the trendline on June 10, which negated the developing ascending triangle pattern. The bears maintained their selling pressure and pulled the price below the strong support of $28,630 on June 11.
The long tail on the June 12 candlestick shows that bulls are attempting to defend the support at $26,700. If buyers propel the price back above the breakdown level of $28,630, it will suggest that the BTC/Tether (USDT) pair may remain range-bound between $32,659 and $26,700 for some time.
On the other hand, if the price turns down from $28,630, it will suggest that bears have flipped the level into resistance. That could increase the possibility of a break below $26,700. If that happens, the selling could intensify, and the pair may drop to $22,000 and later to $20,000.
The pair rebounded sharply from $26,890, indicating aggressive buying near the crucial level of $26,700. The bulls will attempt to push the price back above the breakdown level of $28,630. If that happens, the next stop could be the 50-simple moving average (SMA). A break and close above this level could clear the path for a possible rally to $32,000.
The downsloping 20-exponential moving average (EMA) and the RSI in the negative zone indicate that bears have the upper hand. If the price turns down from $28,630, the bears will make one more attempt to sink the pair below $26,700 and resume the downtrend.
FTT/USDT
FTX Token (FTT) has been in a downtrend for the past several months, but the RSI has formed a positive divergence, indicating that the bearish momentum may be weakening.
The bulls pushed the price above the 20-day EMA of $29 on June 9 but could not sustain the higher levels. The bears pulled the price back below the 20-day EMA, but the bulls did not give up much ground. Sustained buying by the bulls has pushed the price above the resistance on June 12.
The FTT/USDT pair could rally to the 50-day SMA of $32 and if this level is crossed, the up-move may reach $35. This positive view could invalidate if the price turns down and breaks below $25. Such a move will suggest the start of the next leg of the downtrend.
The 4-hour chart shows the formation of an inverse head and shoulders pattern that will complete on a break and close above the neckline. If that happens, the pair could start a new up-move toward the pattern target of $34.
On the contrary, if the price fails to sustain above the neckline, it will suggest that bears are not willing to let go of their advantage. The sellers will then try to pull the price below $26. If they succeed, the pair could slide to $25.
XTZ/USDT
Tezos (XTZ) rose above the 50-day SMA of $2.14 on June 9, but the bulls could not build upon this strength. This suggests that the bears are active at higher levels.
Strong selling by the bears pulled the price below the moving averages and the XTZ/USDT pair dropped to the crucial support zone of $1.61 to $1.45. If the price rebounds off this zone, the bulls will again try to push the pair above the 50-day SMA and challenge the overhead resistance at $2.36.
This positive view could invalidate if the price continues lower and slips below the support zone. If that happens, the pair could resume its downtrend and drop toward the psychological level of $1.00.
The 4-hour chart shows the price is stuck inside the range between $2.30 and $1.61. Usually, when the price consolidates in a range, traders buy near the support and sell close to the resistance. That is what happened, as seen from the rebound off $1.61.
The bears may try to sell on rallies to the 20-EMA, but if bulls clear this hurdle, the likelihood of the pair rising to $2.30 increases. To invalidate this view, bears will have to sink and sustain the price below $1.61. If that happens, the pair may drop to $1.45.
( Rakesh Upadhyay, Cointelegraph, 2022 )