The S&P 500 and Nasdaq Composite Index suffered their worst weekly performances since June as investors remain concerned that the Federal Reserve will have to continue aggressive monetary policy to curb inflation, which could trigger a recession in the United States.
Bitcoin (BTC) remains closely correlated with the S&P 500 and is on track to fall more than 9% this week. If this correlation holds, it could cause even more pain for cryptocurrency markets, as Goldman Sachs strategist Sharon Bell warned that aggressive rate hikes could trigger a 26% drop in the S&P 500.
Daily crypto market data view. Source: Coin360
The majority expects the Fed to hike rates by 75 basis points at the next meeting on September 20-21, but the FedWatch tool shows an 18% probability of a 100 basis point rate hike. This uncertainty could keep traders on their toes and lead to increased short-term volatility.
If the Fed rate hike comes in line with market expectations, select cryptocurrencies could attract buyers. Let’s examine the charts of five short-term bullish cryptocurrencies.
BTC/USDT
Bitcoin rallied from $19,320 on Sep 16 and surged above $20,000 on Sep 17, but the bulls are struggling to sustain the higher levels. This suggests that bears are active at higher levels.
BTC/USDT daily chart. Source: TradingView
The 20-day exponential moving average ($20,432) has gradually turned down and the Relative Strength Index (RSI) is in negative territory, suggesting that sentiment remains negative and traders are near overhead -Sell resistance levels.
If the price continues lower and falls below $19,320, the BTC/USDT pair could drop to $18,510. Buyers are expected to vigorously defend this level.
On the upside, the 50-day simple moving average ($21,605) is the key level to watch. If the bulls push the price above it, the pair could rally to $25,211. A break and close above this resistance could signal the start of a new uptrend.
BTC/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows that the sellers are attempting to halt the rally at the 20-EMA. This suggests that the bears are in no mood to give up their advantage. If weakness continues and the price falls below $19,320, the pair could drop to $18,510.
Conversely, if the price turns up from the current level and breaks above the 20-EMA, the rally could extend to the 50-SMA. This level could act as resistance again, but if this obstacle is removed, the next stop could be the 61.8% Fibonacci retracement level of $21,470.
XRP/USDT
Ripple (XRP) has been stuck in a range between $0.30 and $0.39 for many days. The price has reached the resistance of the range and if bulls clear this hurdle it could signal the start of a new uptrend.
XRP/USDT daily chart. Source: TradingView
In a range, traders typically buy near support and sell near resistance. If the price turns down sharply from the current levels and breaks below the moving averages, it will indicate that the XRP/USDT pair could extend its consolidation for a few more days.
Although the moving averages are criss-crossing, the RSI has jumped into positive territory, suggesting that bulls have a slight advantage. If buyers push and sustain the price above $0.39, the pair could rally to $0.48.
XRP/USDT 4 hour chart. Source: TradingView
The pair rallied sharply from $0.32 to $0.39, which indicates strong buying by the bulls. The 20-EMA has turned up and the RSI is floating in the positive territory, suggesting that the path of least resistance is up.
If the price continues higher and breaks above $0.39, bullish momentum could pick up and the pair could rally to $0.41. This level can act as resistance, but if buyers flip the $0.39 level into support, the upside could resume.
LINK/USDT
Chainlink (LINK) has been stuck in a major range between $5.50 and $9.50 for the past few weeks, suggesting buyers are attempting to form a bottom. The bulls pushed the price above the moving averages and the RSI jumped into positive territory, suggesting that the positive momentum could be improving.
LINK/USDT daily chart. Source: TradingView
There is minor resistance at $8.30 and if bulls push the price above it, the LINK/USDT pair could rally to the stiff resistance at $9.50. This level is likely to attract aggressive selling by the bears, but if bulls break the barrier, it could signal the start of a new uptrend.
The moving averages are the key support to watch on the downside because if they break, selling pressures could increase. That could start a drop to $7 and then $6.20.
LINK/USDT 4 hour chart. Source: TradingView
Buyers are attempting to defend the 4-hour chart’s moving averages. That could start a rally towards the overhead resistance at $8.20. If the price surges above this overhead resistance, the pair could rally to $9.
If the bulls fail to sink the price above $8.20, the bears could take their chances and attempt to sink the pair below the moving averages. That could tip the advantage in the bears’ favor. The pair could drop to $7.50 first and then $7.
Related: Dogecoin is down 75% against Bitcoin since Elon Musk’s SNL appearance
EOS/USDT
The bears pulled EOS below the 50-day SMA ($1.44) on Sep 15 but failed to break the support at $1.34. This suggests that bulls are buying dips and attempting to form a low near $1.34.
On a small downside, the bulls are facing stiff resistance at the 20-day EMA ($1.50). This suggests that the bears have not given up and are trying to take control. This tussle between the bulls and the bears is likely to resolve with a strong breakout.
If the price breaks out of the 20-day EMA, bullish momentum could increase and the EOS/USDT pair could rally to $1.86. Alternatively, if the price turns down and falls below $1.34, the pair could drop to $1.24. A break below this support could sink the pair to $1.
EOS/USDT 4 hour chart. Source: TradingView
The recovery stalled near $1.50, suggesting bears continue to sell on rallies. The bears will try to further increase their advantage by sinking the price below the strong $1.34 support, but it may not be that easy.
Buyers have defended the $1.34 level three times and will try again. If the price recovers from $1.34, the bulls might try again to start a rally above the $1.50 overhead resistance. If they succeed, a rally to $1.70 and later to $1.86 is possible.
XTZ/USDT
Tezos (XTZ) broke below the 20-day EMA ($1.57) on Sept. 13, but the bears failed to pull the price to the symmetrical triangle support line. This suggests that buyers are accumulating on dips and not waiting for a deeper correction to enter. This increases the likelihood of a short-term recovery.
XTZ/USDT daily chart. Source: TradingView
If the price breaks out of the 20-day EMA, the XTZ/USDT pair could rally to the 50-day SMA ($1.66). This level has acted as strong resistance on two previous occasions, so it is an important level to watch. If bulls break through this barrier, the pair could attempt a rally to the triangle’s resistance line.
A break above the triangle signals a possible trend reversal. The pair could then rally to $2 and later to $2.36.
In the meantime, the bears may have other plans. They will try to stop the rally at the moving averages. If the price turns down from current levels and breaks below the $1.50-$1.40 support zone, the June low of $1.20 could be revisited.
XTZ/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows that the bulls defended the support at $1.50 and pushed the price above the downtrend line, but failed to sustain the higher levels. If bears sink the price below $1.50, the pair could drop to $1.40.
On the other hand, if the price rebounds off the $1.50 support, it will suggest lower levels will continue to attract buyers. The bulls will then attempt to push the price above the moving averages and challenge the resistance at $1.62. If this level gives way, the upside could reach $1.70.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should do your own research when making a decision.
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