Last week brought about a decline in the U.S. equities markets, marking a third consecutive week of losses. The Nasdaq Composite saw a six-day decline, a first since 2019. The market’s negative response to a seemingly positive jobs report for August indicates traders’ unease regarding the Federal Reserve’s future actions and its impact on the economy.
The weakness in the U.S. equities markets led to Bitcoin (BTC) dropping below $20,000 on September 2, with bears keeping the price below this level during the weekend. Consequently, Bitcoin’s market dominance fell to just under 39% on September 4, the lowest since June 2018 according to data from CoinMarketCap.
Despite the prevailing negative sentiment and the challenge of predicting a bottom, investors optimistic about the long-term potential of cryptocurrencies may utilize lower price levels to gradually build their positions, rather than attempting to time the market bottom. It’s advisable for investors to avoid chasing prices during bear market rallies and instead consider buying when prices reach strong support levels.
If Bitcoin experiences a recovery, certain altcoins may see upward movement. Let’s analyze the charts of the top 5 cryptocurrencies showing strength on the charts.
BTC/USDT
Bitcoin has been trading within a narrow range of $19,520 to $20,576, indicating a balance between buyers and sellers in the short term. While buyers are stepping in on dips, they are facing resistance at higher levels. The downward 20-day exponential moving average ($20,863) and the negative region of the relative strength index (RSI) favor sellers. Should bears push the price below $19,520, the BTC/USDT pair could drop to a robust support range between $18,910 and $18,626.
This support zone is likely to attract strong buying interest from bulls, as seen in previous instances. To confirm a bearish trend continuation, bears would need to bring the price below $17,622. Conversely, a sustained price rise above the 20-day EMA could signal weakening bearish momentum, potentially leading the pair to the 50-day simple moving average ($22,271).
The recent bounce near $19,520 faces resistance at the moving averages, indicating bearish pressure. A drop below $19,520 could resume the downtrend, whereas a breakthrough above the moving averages might signal a potential trend shift in the near term if buyers surmount the $20,576 hurdle.
ADA/USDT
Cardano (ADA) is consolidating but aiming to surpass the moving averages, suggesting demand at lower price levels and increasing the prospects of an upward move.
With the 20-day EMA ($0.47) flattening out and RSI entering positive territory, selling pressure seems to be easing. Sustaining prices above the 50-day SMA ($0.50) could fuel a rally towards the downtrend line, with a potential target of $0.70 if the barrier is breached.
A negative scenario might unfold if prices dip below the 20-day EMA, leading to a potential slide towards the strong support at $0.40. Short-term 20-EMA uptrend and overbought RSI on the 4-hour chart suggest bullish control, though a minor correction or consolidation could be imminent.
Breaking above $0.48 or the 20-EMA could shift the sentiment from selling on rallies to buying on dips, forcing the price towards $0.54 and potentially the downtrend line. Conversely, a drop below $0.48 could push the pair down to $0.44 and $0.42.
ATOM/USDT
Cosmos (ATOM) has held ground near overhead resistance at $13.45, indicating traders’ anticipation of an upward price movement.
The ATOM/USDT pair rebounded from the 50-day SMA ($11.08) on Aug. 29, with moving averages trending up and RSI in positive territory, suggesting bullish momentum. A breakthrough above $13.45 might lead to further gains to $15.30 and $20, while a sharp downturn below $10 could invalidate the positive view.
The bullish scenario is supported by the 20-EMA slope and buyer interest at this level, with resistance at $13.45 pivotal for potential trend resumption. Failure to breach this level could confine the pair within a range of $10 to $13.45.
FIL/USDT
Filecoin (FIL) broke out of a tight range between Aug. 27 and Sept. 2, signaling buyers’ potential continuation.
The FIL/USDT pair surged and surpassed the 20-day EMA ($6.39) on Sept. 3, indicating a comeback attempt by buyers. However, facing resistance near the 50-day SMA ($6.92) poses a challenge from bears. Maintaining prices above the 50-day SMA could propel the pair to $9 and $9.50, while a drop below could signal a decline to $5.50.
Despite resistance encountered around $6.80 and $6.60, buyers have defended the 20-EMA, hinting at a potential upside breakout. Achieving this could trigger an upward move towards $7.6 and $8.30, negated if prices close below the 20-EMA, leading to a potential slide to $5.50.
EOS/USDT
EOS remains above moving averages amid market turmoil, suggesting short-term outperformance and potential rally upon improved sector sentiment.
An earlier rounding bottom near $1.33 was disrupted by a bearish pullback, yet the recent rebuy near the 50-day SMA indicates a balanced market. Surmounting $1.60 may drive prices to resistance near $2, whereas a breakdown below $1.46 could lead to a drop towards $1.15.
Though a rebound near $1.60 faces challenges from bears, maintaining prices above this level could denote a bullish momentum towards $1.80 and $2. Conversely, falling below the uptrend line could signal a reversal, pushing the pair down to $1.24.
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