Bitcoin and altcoins are likely to remain range-bound in the short-term
as the bulls and the bears attempt to assert their dominance.
On Thursday, U.S. Federal Reserve chairman Jerome Powell is
expected to deliver an important speech that will highlight a new
strategy of targeting “average inflation.”
This means that the Fed might allow inflation to overshoot the 2%
target temporarily if it has spent a long time below that level.
If the Fed adopts this new strategy, it could keep interest rates near zero for five years or more, according to a Bloomberg report.
The
abundant liquidity is likely to drive asset prices higher across the
board and create bubbles that will eventually burst. If this occurs,
investors are likely to lose complete faith in the central banks and
fiat currencies.
Daily cryptocurrency market performance. Source: Coin360
Smart investors are likely to seek the safety of gold and Bitcoin (BTC) during this time of uncertainty. Larger investors have already started accumulating Bitcoin and this has pushed the number of addresses holding over 1,000 BTC to a new record high.
While
this is all great news, traders will want to know if the crypto market
will extend it’s current up-move or whether a period of extended
consolidation is at hand.
Let’s study the charts to find out!
BTC/USD
Bitcoin
plunged and closed (UTC time) below the 20-day exponential moving
average ($11,554) on Aug. 25, which is the first indication that the
bulls were losing their grip.
BTC/USD daily chart. Source: TradingView
The
bulls are currently attempting to defend the $11,100–$10,900 support
zone but are likely to face significant resistance at the 20-day EMA.
If
the bulls fail to push the price back above the 20-day EMA, a drop to
the 50-day simple moving average ($10,728) and then to $10,400 is
possible.
Conversely, if the bulls can push the price
above the 20-day EMA, a move to $12,113.50 is likely. The bears are
likely to defend this level aggressively.
The 20-day EMA
has flattened out and the relative strength index is just above the
midpoint, which suggests a few days of range-bound action.
The
next trending move is likely to start after the bulls push the price
above the $12,113.50–$12,460 resistance zone or sink the price below the
$10,400–10,000 support zone.
ETH/USD
The failure of the bulls to push Ether (ETH)
above the $415.634 resistance on Aug. 24 attracted profit booking on
Aug. 25 that pulled down the price to the critical support at $366.
ETH/USD daily chart. Source: TradingView
Although
the bulls purchased the dip on Aug. 25, they are struggling to push the
ETH/USD pair above the 20-day EMA ($393), which is a negative sign.
This shows a lack of demand at higher levels.
A break
and close (UTC time) below $366 could intensify selling and result in a
drop to the 50-day SMA ($336). Such a move will suggest that a
short-term top has been made at $446.479.
However, if
the bulls can push the price above the 20-day EMA, a few days of
range-bound action between $366– $415.634 is likely.
XRP/USD
XRP
closed (UTC time) above the 20-day EMA ($0.284) on Aug. 24 but a lack
of buying at higher levels again pulled down the price to the $0.268478
support.
XRP/USD daily chart. Source: TradingView
The
bulls are currently attempting to defend the $0.268478 support but
unless they sustain the price above the 20-day EMA, the advantage will
remain with the bears.
If the bears sink the XRP/USD
pair below $0.268478, a drop to the 50-day SMA ($0.25) is possible. This
is an important support to watch out for because if it cracks, the
decline can extend to the 61.8% Fibonacci retracement level of
$0.241068.
Contrary to this assumption, if the pair
rebounds off the $0.268478 support and rises above the 20-day EMA, then a
few days of range-bound action between $0.326113 and $0.268478 is
likely.
LINK/USD
The bulls failed to push Chainlink (LINK)
above the overhead resistance of $16 on Aug. 23 and 24, which attracted
profit booking that pulled the price back below the 20-day EMA ($14.49)
on Aug. 25.
LINK/USD daily chart. Source: TradingView
However,
the positive thing is that the lower levels are attracting buying by
the bulls, which shows that the sentiment remains bullish. Currently,
the LINK/USD pair has again risen above the 20-day EMA.
If the bulls can propel the price above $16, LINK will attempt to resume the uptrend and retest the highs at $20.1111.
On
the other hand, if the pair again turns down from $16, the bears will
try to sink the price to the 61.8% Fibonacci retracement level of
$11.9281.
BCH/USD
The rebound from the breakout level of $280 in Bitcoin Cash (BCH) turned down from the 20-day EMA ($288) on Aug. 25, which suggests that the bears are aggressively defending this resistance.
BCH/USD daily chart. Source: TradingView
The
bulls purchased the dip to the 50-day SMA ($271) on Aug. 25 but if they
fail to push the price back above $280, it is likely to attract another
round of selling that could sink the BCH/USD pair to $260 and then to
$240.
The downsloping 20-day EMA and the RSI in the negative territory suggest that bears have made a comeback.
This bearish view will be invalidated if the pair rebounds off the current levels and rises above the $280–$295 resistance.
LTC/USD
Litecoin (LTC) turned around and plunged below the 20-day EMA ($59) on Aug. 25, which suggests selling by the bears on minor rallies.
LTC/USD daily chart. Source: TradingView
The
next support on the downside is the 50-day SMA ($53) and if this
support also gives way, a drop to $51 will be on the cards.
Conversely,
if the LTC/USD pair rebounds off the current levels, the bulls will
attempt to push the price above the downtrend line. If they succeed, a
move to $64 and then to $68.9008 is possible.
The flat 20-day EMA and the RSI close to the midpoint suggest a few days of range-bound action.
BSV/USD
The bulls pushed Bitcoin SV (BSV)
above the overhead resistance of $200 but could not clear the 20-day
EMA ($206) hurdle on Aug. 24, which attracted selling on Aug. 25 that
pulled the altcoin back below $200.
BSV/USD daily chart. Source: TradingView
The
moving averages are on the verge of a bearish crossover and the RSI is
in the negative zone, which suggests that the bears have the upper hand.
If
the bulls fail to push the price back above $200 within the next few
days, the BSV/USD pair is likely to slide to $160 and then to $146.20.
This bearish view will be invalidated if the bulls can push the price back above the downtrend line.
CRO/USD
Crypto.com Coin (CRO)
turned down from the overhead resistance of $0.176596 on Aug. 25, which
suggests that the bears are aggressively defending this level.
CRO/USD daily chart. Source: TradingView
However,
both moving averages are gradually sloping up and the RSI is in the
positive territory, which suggests that the bulls are at a minor
advantage.
If the CRO/USD pair rebounds off the 20-day
EMA ($0.166), the bulls will once again attempt to scale the price above
$0.176596. If they succeed, the uptrend is likely to resume. The first
target on the upside is $0.191101 and then $0.20.
Conversely, if the pair turns down and breaks below the 20-day EMA, a drop to the 50-day SMA ($0.157) is possible.
BNB/USD
Binance Coin (BNB)
turned down from the overhead resistance of $22.93 on Aug. 25 and
dropped below the 20-day EMA ($22), which suggests aggressive selling by
the bears at higher levels.
BNB/USD daily chart. Source: TradingView
However, the bears could not capitalize on the opportunity and sink the BNB/USD pair below the critical support at $20.5710.
This
has attracted buying from the aggressive bulls who are attempting to
push the price above the downtrend line. If they succeed, a move to
$22.93 and then to $23.91 is likely.
On the other hand,
if the pair turns down from the downtrend line and plummets below
$20.5710, a deeper correction to $19.10 is possible.
ADA/USD
Cardano (ADA)
plunged to the $0.10–$0.11 support zone on Aug. 25, which is a negative
sign. The moving averages have completed a bearish crossover and the
RSI is in the negative territory, suggesting advantage to the bears.
ADA/USD daily chart. Source: TradingView
Currently,
the bulls are attempting to defend the support zone aggressively.
However, any recovery is likely to face stiff resistance from the 20-day
EMA ($0.129). If the ADA/USD pair turns down from the 20-day EMA, the
bears will attempt to sink the price below $0.10.
If they succeed, it will be a huge negative as the next support on the downside is way lower at $0.075.
This
negative view will be invalidated if the bulls can push the price back
above the 20-day EMA and the overhead resistance at $0.13.
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