US equity markets rallied sharply last week, ending a three-week streak of defeats. The S&P 500 rose 3.65% last week while the Nasdaq Composite was up 4.14%. Continuing its close correlation with US equity markets, Bitcoin (BTC) has also made a strong comeback and is looking to end the week with gains of more than 7%.
The strong rally in the equity and cryptocurrency markets is showing signs of a low formation, but it may be too early to predict the start of a new bullish move. Equity markets could hang in the balance ahead of the release of US inflation data on September 13 and the Federal Reserve meeting on September 20-21.
In addition to taking a cue from the stock markets, the cryptocurrency space has its own important events to look forward to. Both the hard fork of Ethereum’s Merge and that of Cardano (ADA) Vasil scheduled in the coming days could increase volatility in various cryptocurrencies.
Although unstable markets increase risk, they can offer short-term trading opportunities for nimble traders. Let’s study the charts of five cryptocurrencies that look attractive in the short term.
BTC / USDT
On September 9, bitcoin rose above the 20-day exponential moving average ($ 20,662), which was the first indication that selling pressure may be easing. The bears are trying to stop the recovery at the 50-day simple moving average ($ 21,946), but a positive sign is that the bulls haven’t lost much ground.
The 20-day EMA has started to gradually rise and the Relative Strength Index (RSI) is in positive territory, indicating that the path of least resistance is to the upside. If the bulls push the price above the 50-day SMA, the BTC / USDT pair could reach the strong resistance at $ 25,211. Bears should defend this level vigorously.
Another possibility is that the price will drop from the 50-day SMA. If so, the pair could fall to the 20-day EMA. This is an important level to watch as a break and close below it could open the door to a drop to $ 18,626. Alternatively, if the price bounces off the 20-day EMA, it will increase the likelihood of a break above the 50-day SMA.
The pair gained momentum after breaking out of the breakout level of $ 19,520. The strong rally pushed the RSI into overbought territory, suggesting a minor consolidation or correction. Buyers are facing a tough challenge near $ 22,000 but have not given way to the bears. This suggests that every small drop is bought.
If the bulls push the price above $ 22,000, the pair could quickly rise to $ 23,500, where the bears may again attempt to stop the upward movement.
Contrary to this assumption, if the price dips and falls below the 20-EMA, the pair could fall to $ 20,576. A break below this level will suggest that the pair could consolidate in a broad range of $ 22,000 to $ 18,626 for some time.
ATOM / USDT
Cosmos (ATOM) broke out of the above resistance of $ 13.45 on September 8, indicating demand at higher levels. The next hard resistance is at $ 20.30, which leaves room for a rally.
First, however, the bears will attempt to drive the price below the breakout level of $ 13.45. This is an important level to watch for as a break and close below it will indicate that the recent breakout may have been a bullish trap.
On the other hand, if the price rises from the current level or rebounds from $ 13.45, it will suggest that the bulls are in control and are buying with each decline. If the bulls push the price above $ 17.20, the upward move could gain momentum and reach $ 20.30.
The 4-hour chart shows that the ATOM / USDT pair rose after breaking out of the overhead resistance at $ 13.45. This pushed the RSI deep into the overbought territory and initiated a correction, but a positive sign is that the bulls have not lost much ground.
If the price rebounds from the current level, the possibility of a break above $ 17.20 increases. If that happens, the upward movement can continue and the pair can reach $ 20.30.
This positive view could invalidate in the short term if the price continues to fall and plummets below the 20-EMA. If that happens, the pair can drop to the 50% Fibonacci retracement level at $ 14.36.
APE / USDT
ApeCoin (APE) has rebounded strongly from the support at $ 4.17, indicating aggressive buying at lower levels. This suggests that the corrective phase may be over, making it an attractive candidate for the short term.
Buyers pushed the price above the 20-day EMA ($ 5) on September 9 and the APE / USDT pair formed an inside-day Doji candlestick pattern on September 10. This uncertainty was resolved to the upside on September 11 with a strong rally to the 50-day SMA ($ 5.85). The bears may try to stop the recovery at this level.
If the price falls from the current level but bounces off the 20-day EMA, it will suggest that sentiment has turned positive and that traders are buying down. The bulls will then again attempt to push the price above the 50-day SMA. If so, the pair could move towards the overhead resistance of $ 7.80.
This positive view could invalidate in the short term if the price dips and dips below the 20-day EMA. If so, the pair could fall to $ 4.17.
The 20-EMA on the 4-hour chart has started to rise and the RSI has moved up into the overbought territory. This indicates that the bulls have the upper hand, but a short-term pullback is possible.
If the price falls from the current level but bounces off $ 5.30, it will suggest strong demand at lower levels. The bulls will then make another attempt to push the price above $ 5.83 and extend the recovery to $ 6.44.
Alternatively, if the price falls and falls below the 20-EMA, the lead could skew in favor of the bears.
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CHZ / USDT
Chiliz (CHZ) broke above the 20-day EMA ($ 0.20) on September 9, which was the first indication of the end of the corrective phase. Hence, this token entered the list.
The bears tried to push the price back below the 20-day EMA on September 10, but the bulls held their position. Buyers are attempting to push the price towards the overhead resistance at $ 0.26, but the upward move could encounter strong headwinds near $ 0.23.
If the price falls but does not fall below the 20-day EMA, the probability of a rally to $ 0.26 increases. Contrary to this assumption, if the price falls and falls below $ 0.20, it will suggest that the bears are active at higher levels. This could lead the price to the 50-day SMA ($ 0.18).
The 4-hour chart shows that the bears are defending the downtrend line. If the price falls from the current level but bounces off the moving averages, it will suggest that the bulls are attempting a comeback.
Buyers will then try again to bring the price above the downtrend line. If successful, the pair could begin its northward march to $ 0.23 and then to $ 0.26 thereafter.
Alternatively, if the price dips below $ 0.20, it would suggest that the pair may remain within the declining wedge pattern. This could bring the price down to $ 0.18.
QNT / USDT
Quant (QNT) has not fallen below the strong support at $ 87.60, indicating that sentiment is positive and the bulls are buying down. This is the reason for its selection.
The strong rebound from $ 87.60 broke above the 20-day EMA ($ 100) on September 8, which was the first indication of the end of the corrective phase. The bears presented a strong challenge near the 50-day SMA ($ 105), but failed to bring the price back below the 20-day EMA.
This indicates that the sentiment has turned positive and that the bulls are buying down. Buyers pushed the QNT / USDT pair above the 50-day SMA on Sept. 11. If the bulls sustain the higher levels, the pair can move up to $ 117 and then to $ 124. A break above this level could open the door to a rally to $ 130.
This bullish view could be invalidated if the price falls and falls below the 20-day EMA. If that happens, the pair can drop to the strong support at $ 87.60.
The 4-hour chart shows that the pair has rebounded sharply from the support at $ 87.60. The bears have posed a strong challenge near $ 108, but a positive sign is that the bulls have bought the dip towards the 20-EMA. This indicates that traders see dips as a buying opportunity.
Buyers resumed the recovery by pushing the price above the environmental resistance of $ 108. The pair could move up to $ 113 and then to $ 117. Conversely, if the price were to drop and plummet below the 20-EMA, the pair could drop to the 50-SMA.
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 carries risk, you should conduct your research when making a decision.