The recovery rally in US stock markets took a breather this week as all major moving averages ended in the red. Traders appear to have posted gains ahead of next week’s busy economic calendar.
The S&P 500 Index fell 3.37%, but one small positive for the cryptocurrency markets is that Bitcoin (BTC) has not followed the stock markets lower. This suggests that crypto traders are not panicking and not selling their positions every time the stock falls.
Daily crypto market data view. Source: Coin360
Bitcoin’s range bound action suggests traders are avoiding big bets ahead of the Federal Reserve’s Dec. 14 rate hike decision. However, this has not stopped the action on select altcoins that show promise in the near term.
Let’s look at Bitcoin’s charts, select altcoins and identify the critical levels to watch out for in the short-term.
BTC/USDT
Bitcoin has been hovering around its 20-day exponential moving average (EMA) of $17,031 for the past few days. The flat 20-day EMA and Relative Strength Index (RSI) near 50 does not give any clear advantage to either the bulls or the bears.
BTC/USDT daily chart. Source: TradingView
The critical level to watch on the upside is $17,622. If buyers propel the price above this level, the BTC/USDT pair could start a stronger recovery that could lead it to the downtrend line. The bears are expected to defend this level aggressively.
If the price reverses direction from the downtrend line but fails to break below $17,622, it will indicate that the bulls are attempting to reverse the level towards support. This could increase the chances of a break above the downtrend line. The pair could then rally to $21,500.
On the upside, the bears might gain strength if the price drops below $16,678. The pair could then drop to $15,995.
BTC/USDT four hour chart. Source: TradingView
The pair has been trading within an ascending channel on the four-hour chart. The bears have kept the price in the lower half of the channel, which indicates selling on rallies. A break below the moving averages could pull the price towards the channel’s support line. If this level cannot be sustained, the pair could initiate a move down to $16,678 in the short-term.
When the price is pointing up from the current level or the channel support line, it suggests that the bulls continue to buy dips. The pair could then attempt a rally to the overhead resistance at $17,622. If this level is taken out, the pair could scale the resistance line of the channel.
XMR/USDT
Monero (XMR) has been trading inside a falling wedge pattern for the past few days. The rising 20-day EMA ($143) and the RSI in positive territory are showing that the bulls have an advantage.
XMR/USDT daily chart. Source: TradingView
The XMR/USDT pair could rally to the wedge resistance line, where the bulls are likely to meet strong selling from the bears. If the price turns down from the resistance line and breaks below the moving averages, it will suggest that the pair could extend its stay within the wedge.
If bulls instead propel the price above the resistance line, it will indicate a change in the short-term trend. The pair could then attempt a rally to $174 which could act as a roadblock. A break above this level could signal that the downtrend could be over.
XMR/USDT four hour chart. Source: TradingView
The pair is rising within an ascending channel pattern on the four-hour chart. This shows that near-term sentiment remains positive and traders are buying the dips. The pair could continue its upward move and reach the resistance line near $156. If this level is scaled, the rally could reach $162.
The first sign of weakness will be a break and close below the moving averages. The pair could then drop to the channel’s support line. A break below the channel could initiate a move down to $133.
TON/USDT
The bulls pushed Toncoin (TON) above the symmetrical triangle resistance on December 11, suggesting that uncertainty has dissipated in favor of buyers. The symmetrical triangle usually acts as a continuation pattern, increasing the likelihood of the uptrend resuming.
TON/USDT daily chart. Source: TradingView
If buyers sustain the price above the triangle, the TON/USDT pair might attempt a break above the overhead resistance zone between $2 and $2.15. If they succeed, the pair could gain momentum and climb to the pattern target of $2.87.
Conversely, when the price fails to sustain above the triangle, it suggests that the bears continue to sell on rallies. A break below the 50-day simple moving average (SMA) of $1.70 could trap the aggressive bulls and drag the pair to the triangle support line.
TON/USDT four hour chart. Source: TradingView
The four-hour chart’s moving averages are sloping up and the RSI is floating in the overbought territory, indicating that the bulls are in charge. The upside might face an obstacle near USD 2, but if the bulls sustain the price above this level, the rally could gather momentum.
If the price turns down from current levels and breaks below the 50-SMA, selling could accelerate and the pair could drop to $1.70. This is an important level to watch as a break below it could signal that the bears are back in charge.
Related: SBF ‘didn’t like’ decentralized bitcoin – Cathie Wood, CEO of ARK Invest
TWT/USDT
Trust Wallet Token (TWT) has continued its march north, suggesting traders are buying at higher levels and are not in a hurry to book profits. This increases the probability of an extension of the uptrend.
TWT/USDT daily chart. Source: TradingView
The bulls will attempt to push the price above the overhead resistance at $2.73. If they succeed, the TWT/USDT pair could surge to the psychological $3 level, where the bears could attempt to halt the upward movement.
If the buyers push through this obstacle, the uptrend could reach the $3.51 pattern target.
The bears likely have other plans as they look to defend the overhead resistance at $2.73. You need to break the price below the 20-day EMA ($2.30) to gain the upper hand.
TWT/USDT 4 hour chart. Source: TradingView
The four-hour chart shows that bulls bought the dips to the moving averages. Although the moving averages are sloping up, the RSI is showing negative divergence, suggesting that the bullish momentum might be weakening. This could change if bulls push the price above $2.73 as that could attract more buying.
The moving averages are the critical support to watch on the downside. If the 50-SMA support breaks down, several short-term traders could book gains, which could drag the pair to $2.25 and $2 thereafter.
AXS/USDT
Axie Infinity (AXS) has been in a strong downtrend but is showing the first signs of a potential reversal. Buyers pushed the price above the downtrend line on December 5 but failed to sustain the higher levels as indicated by the long wick on the daily candle.
AXS/USDT daily chart. Source: TradingView
On a small plus, the bulls have not allowed the price to break below the moving averages. This shows that buyers are attempting to flip the moving averages towards support.
The moving averages are on the verge of a bullish crossover and the RSI is in positive territory, suggesting that momentum may shift in bullish favor. If the price breaks the downtrend line and sustains, a rally to $11.85 is likely. This level is expected to act as a major hurdle to the upside.
The optimistic view could be invalidated in the short term if the price turns down and breaks below the moving averages. The AXS/USDT pair could then drop to $6.57.
AXS/USDT four hour chart. Source: TradingView
The 4-hour chart shows the bears vigorously defending the downtrend line and the bulls buying the dips to the 50-SMA. The 20-EMA has flattened out and the RSI is near 47, indicating a balance between supply and demand.
A break and close above $8.70 could shift the advantage in favor of the bulls. The pair could then rally to $9.28 and later to $10. Alternatively, a break below $7.86 could indicate that the bears are back in the driver’s seat. The pair could then drop to $6.87.
The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
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