Bitcoin could consolidate for a few more days, but some altcoins have formed inversion patterns that could lead to decisive movements
After a series of negative news in recent days, investors are concerned about the stability of the crypto. Fortunately, the markets have matured to the point that this type of news no longer causes strong price fluctuations, typical of the early days of crypto currencies.
The current stability shows that institutional investors do not see the recent KuCoin hack, the CFTC and DOJ allegations against BitMEX, and even President Donald Trump’s coronavirus diagnosis as serious enough to bring down crypto markets.
As a result, the news did not cause panic or liquidation in Bitcoin (BTC) futures and open interest remained stable.
In a bullish trend, traders take advantage of the price weakness caused by impulsive reactions to add to their positions. If Bitcoin continues to remain above the psychological fundamental level at $10,000, more and more investors may decide to accumulate more BTCs in their portfolios.
Despite Bitcoin’s lateral price action, some altcoins have continued their upward trend, and others are showing signs of a possible positive trend reversal.
Let’s analyze the graphs of the 5 cryptocurrency to follow to identify the critical levels that could signal the beginning of a decisive movement.
BTC/USD
The long-term trend in Bitcoin Code is bullish, as indicated by the simple moving average at 200 days uphill ($9,448). However, in the short term, the exponential moving average at 20 days ($10,682) and the relative strength index near the average point suggest a balance between supply and demand.
Over the last few days, the BTC/USD pair has remained constrained between $9,835 and $11,178. A break-up above or below this range could mark the start of a new trend.
Between May and July, the pair has been stuck for almost 80 days in a narrow range, and the current consolidation has been going on for about 30 days.
If history repeats itself, the price may remain within the range for a few more days. As a result, traders should be patient until the range is broken.
A breakout above $11,178 could trigger an increase with the first target at $12,460, while a fall below $9,835 and the 200-day SMA could intensify the selling pressure, as traders hurry to close their positions.
The 4-hour chart shows that the price is within a large symmetrical triangle. A breakout between half and three quarters of the distance from the base of the triangle to its vertex is considered reliable.
As a result, in the coming days both bullish and bearish could attempt a breakout from the triangle. However, if this does not work and the price reaches the vertex of the triangle, the pattern will be invalidated.
ADA/USD
On 23 September, Cardano (ADA) closed the daily candle below SMA at 200 days ($0.0837), but the bearers were unable to maintain the lower levels, and on 24 September the altcoin rose above the long-term moving average.
This development suggests that the bullish are aggressively defending the 200-day SMA. The price action of the last few days shows the formation of a possible reverse head and shoulders that will be completed with a breakout and closure above the neckline.
The pattern target is at $0.1331. This bullish view will only come into play when the neckline is overrun.
Contrary to this assumption, if the ADA/USD pair is rejected by the current level or neckline and falls below the 200-day SMA, it will invalidate the pattern. This could lead to an aggressive sale, with the next support at $0.050.
The 4-hour chart shows that the bullish are struggling to push the price above the resistance at $0.1040440. So it looks like the bearers are absorbing the relief rally by selling close to this level.
Downhill moving averages and CSR in negative territory suggest that bearers have a slight advantage in the short term. If the price falls below $0.0898, bearers will try to push it towards the decisive support at $0.074.
On the contrary, if the bullish ones succeed in pushing and keeping the price above the moving averages, a movement towards the $0.1040440 and then towards the neckline will become possible.
XMR/USD
On 29 September, Monero (XMR) passed the resistance at $97.70 and the new breakout level test on 2 October was positive. This shows that the level, once a strong resistance, is now acting as an important support.
The 20-day EMA on the rise ($97.15) and CSR in positive territory suggest that the easiest path is upwards. The first target is at $113.211, and the second at $121.427.
It is likely that the momentum will increase if the bullish push the price above this level towards the next target at $140.
This positive outlook will be invalidated if the pair XMR/USD falls below $93. The bearish movement could push the price towards the 200-day SMA, currently at $71.79.
The 4-hour chart shows that over the last few days the pair has generally remained within a channel. Although the price has risen above the upper limit, the bullish have not been able to protect the levels reached and the pair has fallen again, touching the support line of the channel.
However, the rebound from this point has been strong and the bullish are again trying to push the price over the channel. If they succeed, the momentum could increase.
In opposition to this perspective, if the price is not able to exit the channel, a gradual positive movement is likely. The first sign of weakness will be a break below the channel.
ATOM/USD
Cosmos (ATOM) is showing signs of a possible reversal, after forming a reverse head and shoulders pattern that will be completed with a breakout and closure above the neckline.
This setup has a target of $7.4, and if this level is exceeded, it may test the highs again at $8.877.
However, the 20-day EMA ($5) is currently flat and the RSI is just above the midpoint, suggesting a balance between supply and demand. Therefore, traders may wait until the price exceeds the neckline before becoming optimistic.
If the ATOM/USD pair is rejected by the neckline, a collapse to $4.50 and then to the 200-day SMA ($3.675) is possible.
The 4-hour chart shows that the bullish have absorbed the contraction towards the Fibonacci retracement by 50% on the increase from $3.78 to $5.596. Now buyers will try to push the price over $5.596 again.
If they manage to complete the breakout and maintain it, the reverse head and shoulders pattern will be complete.
This bullish view will be cancelled out if the pair falls from current levels or higher resistance, breaking down the 61.8% retracement level to $4,474. This movement could plunge the price to $3.78.
VET/USD
In the last few days, the bullish have defended support at $0.01094, but have not been able to maintain the higher levels, suggesting that the bearers continue to sell and dampen the increases. As a result, VeChain (VET) has returned to the $0.01094 support level again.
If the bearish push the VET/USD under the support level of $0.01094 and the SMA at 200 days ($0.0104), the selling pressure is likely to intensify and a collapse first to $0.008 and then to $0.0066 will become a possible scenario.
The 20-day EMA ($0.0128) is falling and the CSR has failed to stay above 50, so the bearish seem to be ahead.
This negative outlook will be invalidated if the pair rebounds from support and rises above $0.0160. Such a movement would suggest the bullish build up to lower levels.
The 4-hour chart shows the formation of a downward triangle, which will be completed following breakdown and closing below $0.010940. This setup places a target at $0.00328.
Descending moving averages and CSR in negative territory suggest that the bearish will prevail in the short term.
This scenario will be invalidated if the pair rebounds from $0.010940 and continues to rise above the triangle’s descending line.