The S&P 500 and Nasdaq have fallen for five weeks in a row, indicating that traders continue to reduce their exposure to risky assets. Bitcoins (BTC) close correlation with US stock markets has led to the price remaining under pressure.
Bitcoin has extended its decline over the weekend and is now heading for its sixth consecutive weekly loss, the first such event since 2014. The weakness of Bitcoin has dragged down entire crypto markets, whose market value has fallen below $ 1.6 trillion.
When the feeling is bearish, traders sell on all negative news. The decoupling of Terra̵[ads1]7;s stackecoin in US dollars TerraUSD (UST) also appears to increase sales pressure across the crypto market.
After Bitcoin’s six consecutive weekly bars in red, is it time for an improvement? Let’s study the charts of the 5 best cryptocurrencies that show signs of stabilizing in the short term.
BTC / USDT
Bitcoin fell from the 20-day exponential moving average (EMA) of $ 38,268 on May 5, plunging below the rising line of support. This move also invalidated the positive divergence on the relative strength index (RSI).
The moving averages have started to decline and the RSI is approaching the oversold zone, which signals that the bears are in control.
The BTC / Tether (USDT) pair has a minor support of $ 34,322, but if bulls fail to defend this level, the decline could extend to $ 32,917. This is a crucial level to keep an eye on, because if it breaks, the pair could witness panic selling and the next stop could be $ 28,805.
If the price goes up from $ 34,322, the rise could face sales close to the 20-day EMA. If the price falls from this level, it will indicate that sentiment remains negative and traders are selling at the rally. This may increase the prospects for a resumption of the downtrend.
This negative view can become invalid in the short term if the bulls push and maintain the price above the 20-day EMA. If that happens, the pair could rise to the 50-day simple moving average (SMA) of $ 41,466.
The declining moving averages indicate that the bears are in command, but the oversold levels of RSI suggest that a relief rally or consolidation is possible in the short term. If recovery fails to rise above the 20-EMA, the Bears could maintain selling pressure and the pair could drop to $ 32,917.
Conversely, a break and closure above the 20-EMA may signal the start of a strong relief rally. The pair can then rise to 50-SMA. Buyers must push and maintain the price above $ 40,000 to signal that the downtrend may be over.
ALGO / USDT
Algorand (ALGO) has been trading in a declining channel pattern in recent days. The price jumped off the channel’s guideline on May 1 and the bulls have cleared the barrier at the $ 0.69 20-day EMA, indicating that sales pressure could be reduced.
If buyers maintain the price above the 50-day SMA of $ 0.76, the ALGO / USDT pair may increase to the resistance line of the channel. This is an important level for the bulls to overcome. If they succeed, it will suggest the start of a new up-pull. The pair may rise first to $ 1.10 and later to $ 1.25.
On the other hand, if the price goes down from the resistance line, it will indicate that the couple can extend their stay inside the canal for a few more days. The bears must sink and maintain the price below the channel to indicate a resumption of the downtrend.
20-EMA has emerged and RSI is in the positive territory, indicating advantage for buyers. There is a smaller resistance of $ 0.80, and if bulls overcome this obstacle, the pair can rise to the resistance line of the channel.
On the downside, the 20-EMA is the critical level to keep an eye on. If the price falls from this level, it will indicate that sentiment has turned in favor of buyers. This can increase the likelihood of a break above $ 0.80. Alternatively, if the price falls below 20-EMA, the next stop may be 50-SMA.
XMR / USDT
Monero (XMR) has found support close to psychological support at $ 200 in recent days. Buyers have not let the price break below the downtrend line, which indicates that they are trying to turn the level to support.
The bulls must push and maintain the $ 223 20-day EMA price mark to indicate that the correction phase may be over. There is a small resistance of $ 240, but if bulls overcome this obstacle, the XMR / USDT pair can increase to $ 289.
On the contrary, if the price drops from today’s level or the 20-day EMA, it will indicate that the bears have not yet given up. This can increase the likelihood of a break below $ 200. If that happens, sales could intensify and the pair could drop to $ 150.
The pair has formed a symmetrical triangular pattern that suggests indecision among the bulls and bears. If bulls drive the price above the resistance line of the triangle, it will indicate that the downtrend may be over. The pair can then rally to 200-SMA and later rise to the $ 252 target.
Conversely, if the uncertainty of the triangle passes downwards, it would indicate that the triangle had acted as a continuation pattern. It may signal the resumption of downward movement. The pattern size on the bottom is $ 164.
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XTZ / USDT
Tezos (XTZ) broke below the long-term uptrend line on April 29 and the Bears defended the collapse level on May 5. The Bears tried to start the downtrend, but are struggling to maintain the lower levels.
If bulls push and maintain the price above the uptrend line, it will indicate that the markets have rejected the collapse. The XTZ / USDT pair can then attempt a rally to the overhead zone between the 50-day SMA of $ 3.18 and $ 3.40.
This positive view may become invalid if the price again falls from the uptrend line. If this happens, it will indicate that bears have turned the trend line into resistance. A break and close below $ 2.39 could start a new downtrend that could reach $ 2.00.
The 20-EMA has leveled off and the RSI has formed a bullish divergence on the 4-hour chart indicating that the negative momentum is weakening. The pair can now try a rally for $ 2.90 where the bears can offer strong resistance. A pause and closing above this level can open the doors for a possible up-pull to $ 3.00 and later to $ 3.30.
Alternatively, if the price drops from the current level or overhead resistance, it will indicate that bears are selling at the rally. It can keep the pair limited to between $ 2.90 and $ 2.39. The downtrend could accelerate if bears fall in price below $ 2.39.
THETA / USDT
Theta Network (THETA) had traded between $ 2.27 and $ 4.40 in recent weeks. This range was resolved to the downside on May 6, indicating that the bears had the upper hand.
Although the $ 2.57 20-day EMA is falling, the RSI is trying to form a bullish divergence, indicating that the sales momentum is weakening. If bulls push the price back above the collapse level of $ 2.27, it could catch several aggressive bears that may have initiated short positions during the break below the area.
The THETA / USDT pair can then rise to the 20-day EMA. This is an important level to keep an eye on, because if bulls overcome this barrier, the pair can rally to the 50-day SMA of $ 3.10.
This positive view may become invalid if the price drops from the current level or the collapse level of $ 2.27 and falls below $ 2.00.
The bulls buy dips close to the psychological level at $ 2.00. If buyers run the price above the downtrend line, it will indicate that the bears may lose their grip. The pair can then increase to the overhead resistance of $ 2.64. This level may again act as a strong resistance, but if buyers overcome this obstacle, the bullish momentum may pick up.
Contrary to this assumption, if the price drops from the 20-EMA or the downtrend line, it will indicate that bears continue to sell at the rally. This could increase the chance of a break below $ 2.00 and a resumption of the downtrend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade involves risk, you should conduct your own research when making a decision.