Trader sentiment has turned bearish following an 11% plunge in Bitcoin (BTC) this week. While Bitcoin finds support near $25,000, some analysts are considering a further drop to the key $20,000 level.
This weakness is not limited to the cryptocurrency market. U.S. stocks also had a week of losses. The S&P 500 fell 2.1 percent and the Nasdaq Composite fell about 2.6 percent, with both indexes posting three-week losing streaks. This suggests that traders are in risk-off mode in the near term.
Bitcoin’s decline dragged several altcoins lower, pointing to a broad sell-off. However, in a sea of red, a few altcoins stand out by either bouncing off strong support levels or continuing to rise.
Let’s examine the charts of the top five cryptocurrencies that are likely to reverse the negative trend and maintain a positive momentum in the coming days.
Bitcoin Price Analysis
Bitcoin has been oscillating between $24,800 and $31,000 for the past few days. After failing to sustain above the resistance, the price has dropped near the range’s support.
The decline over the past few days has pulled the relative strength index (RSI) into oversold territory, suggesting a recovery may be on the horizon. If the price rises from the current levels, it could reach the 20-day exponential moving average ($28,309). Bears are likely to sell on rallies to this level.
If the price turns down from the 20-day EMA, the BTC/USDT pair could drop again to the critical support at $24,800. If this support level disappears, the pair could start a decline towards $20,000.
On the upside, a breakout and close above the 20-day EMA would suggest that the pair may stay in the range for a few more days. The bulls must push and sustain the price above $31,000 to start a fresh increase, but it looks a bit far-fetched for now.
Both moving averages are sloping down and the RSI is in oversold territory on the four-hour chart, suggesting bears are in command. If the price turns down from the 20-day EMA, the pair could retest the support area between $25,166 and $24,800.
Conversely, a break and close above the 20-day EMA could indicate that the bears may be getting out of hand. This could start a rally towards the 50% Fibonacci retracement level of $27,200 and then the 61.8% retracement level of $27,680.
Ivy Price Analysis
Hedera (HBAR) retreated from the overhead resistance at $0.078 on August 15, indicating that bears are active at higher levels. However, a small advantage in favor of the bulls is that buyers bought on dips below the 50-day moving average ($0.054).
Both moving averages are sloping up, and the RSI is in positive territory, suggesting that buyers have the upper hand. The bulls will try again to push the HBAR/USDT pair above the overhead resistance at $0.078. If this hurdle is overcome, the pair could surge to $0.093 and eventually $0.099.
Conversely, if the price turns down and breaks below the 20-day EMA, it will suggest that the bears continue to sell into rallies. Then, the pair may retest the support of the ascending trendline. A break below this level could open the door for a drop to $0.045 and then to $0.040.
The recovery faces resistance near the overhead resistance at $0.070. This shows that the bears have not given up and they continue to sell into rallies. The price has turned towards the moving averages, which is an important level to watch.
If the price rises from the current levels, it will indicate that the bulls are attempting to turn the moving averages into support. Buyers will then make another attempt to break the $0.070 barrier. If they do, the rally could reach $0.075.
If the price breaks below the moving averages, the pair could drop to the uptrend line, which is an important level for bulls to defend.
Optimistic Price Analysis
Optimism (OP) fell below the moving averages but found support at the uptrend line. This indicates that demand is at a low level.
The price has bounced off the uptrend line but is facing resistance at the 20-day EMA ($1.51). If the price does not break below the uptrend line, the chances of a rally above the 20-day EMA increase. If this happens, the OP/USDT pair could rise to the overhead resistance at $1.88.
Contrary to this assumption, if the price turns down and breaks below the uptrend line, it will indicate that the bears have seized control. The pair may first drop to $1.21 and then to $1.09.
The four-hour chart shows that the bears are trying to prevent a recovery at the 50-day moving average. If the price closes below the 20-day EMA, the next stop could be the uptrend line. A break below this support could signal the start of a deeper decline.
Contrary to this assumption, if the price recovers from current levels and breaks above the 50-day moving average, it will signal the start of a rally towards $1.61. If this level is breached, the pair could reach $1.71.
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Single shot price analysis
Injective (INJ) price action over the past few days has formed a bullish ascending triangle pattern, indicating that buyers have a slight advantage.
On Aug. 17, the bears pulled the price below the uptrend line of the triangle, but the long tail on the candlestick showed strong buying at lower levels. On Aug. 18, the bulls pushed the price above the 20-day EMA ($7.73) and have managed to hold the level since then. This shows that the bulls are attempting to turn the 20-day EMA into support.
A move above the 50-day moving average ($8.16) could signal renewed dominance of the bulls. This could clear the way for a potential rally to $10. This positive view may be invalidated in the short-term if the price turns lower and breaks below the uptrend line. The INJ/USDT pair may drop to $5.40.
The four-hour chart shows a strong rebound from an uptrend line, suggesting that the bulls are aggressively protecting this level. The recovery may face a sell-off at the overhead resistance at $8.33.
If the price pulls back from current levels or overhead resistance but bounces off the 20-day EMA, it will suggest that bulls continue to buy on dips. This will strengthen its prospects for a break above $8.33. If this resistance is cleared, the pair could rise to $8.83 and then to $9.50.
The first sign of weakness would be a break and close below the 50-day moving average. This could take the pair down to the key level of the rising trendline. If this level breaks down, the pair could drop to $6.50.
THORChain price analysis
While most altcoins are under pressure, THORChain (RUNE) has been on an uptrend for the past few days.
As can be seen from the long wick on the Aug. 19 candlestick, the uptrend faces a sell-off at resistance above $2. The sharp gains over the past few days have pushed the RSI into deeply overbought territory, suggesting a consolidation or minor correction could be in the offing.
If the bulls do not retrace too much from current levels, the chances of a break above $2 will increase. If this happens, the RUNE/USDT pair could start towards $2.30 and then $2.60.
Conversely, a break below $1.41 will signal the start of a further correction at the 20-day EMA ($1.33).
Both moving averages are sloping up on the four-hour chart, and the RSI is in overbought territory, suggesting that the bulls have the upper hand. If the price sustains above $1.80, the pair may retest the key resistance at $2.
Conversely, if the price breaks below $1.80, a drop to the 20-day SMA is possible. A strong rebound from this level would indicate that market sentiment remains positive and traders buy on dips. This will increase the chances of a rally to $2.
If the price breaks below the 20-day EMA, it will indicate that traders are selling into rallies. This could send the pair down to the 50-day moving average and then to $1.38.
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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