Bitcoin (BTC) and several altcoins are trading in a tight range over the weekend, suggesting investors are undecided about the next directional move. Traders may be waiting for Wall Street to open before placing big directional bets as Bitcoin has been closely correlated with the S&P 500 for the past few days.
The sharp fall in US stock markets on April 22 suggests that investors are increasingly nervous amid dovish central banks. The market is expecting the US Federal Reserve to hike rates by 250 basis points in 2022. In addition, the European Central Bank is expected to hike rates for the first time since 2011, according to a Reuters source.
Daily crypto market data view. Source: Coin360
Coinglass data showed that funding rates on crypto derivatives exchanges remained negative over the weekend, indicating a bearish bias. The failure to sustain a recovery has dragged the Crypto Fear and Greed Index back into “extreme fear” territory.
Could Bitcoin Attract Strong Buying At Lower Levels? In this case, select altcoins could outperform. Let’s examine the charts of the top 5 cryptocurrencies that have a positive chart structure.
BTC/USDT
Bitcoin broke below the psychological support at $40,000 on April 22, but the bears failed to extend this advantage. The consecutive intraday candlestick patterns on April 23 and April 24 indicate indecisiveness in both bulls and bears.
BTC/USDT daily chart. Source: TradingView
The 20-day exponential moving average ($41,150) is sloping down and the Relative Strength Index (RSI) is in negative territory, suggesting the sellers have a slight advantage. If the bears sink and sustain the price below $39,000, the BTC/USDT pair could drop to the ascending channel support line. The bulls are expected to vigorously defend this level.
When the price bounces off the support line with force, it indicates strong demand at lower levels. The bulls need to push and hold the price above the 50-day simple moving average ($41,993) to indicate that the correction may be over. The pair could then attempt a rally to the 200-day SMA ($47,828).
Alternatively, if the price falls below the channel, selling could further intensify and the pair could drop to $34,322 and later to $32,917.
BTC/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows the price stuck in a tight range between $39,177 and $39,980. This suggests that the bears are attempting to sink the $40,000 level into resistance. The falling 20-EMA and the RSI in the negative territory suggest that the path of least resistance is to the downside.
If the price falls below $39,177, the pair could drop to $38,536. A break and close below this level could open the doors for a drop to $37,000.
Contrary to this assumption, if the price turns up from current levels and breaks above the 50-SMA, bullish momentum could increase and the pair could rally to the 200-SMA.
DOT/USDT
Polkadot (DOT) has been trading near the overhead resistance at $19 for the past few days. This suggests that the bears have successfully defended the level, but on a small positive note, the bulls have not given much ground to the sellers.
DOT/USDT daily chart. Source: TradingView
The slightly falling 20-day EMA ($19) and the RSI in the negative territory suggest that the bears have a slight advantage. If the price turns down and breaks below $18, chances of a drop to the strong $16 support will increase.
On the other hand, if the bulls propel the price above the 50-day SMA ($19), bullish momentum could increase and the DOT/USDT pair could rally to the overhead resistance at $23. Bears are expected to build strong defenses at this level.
DOT/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows the formation of a descending triangle pattern, which completes on a break and closes below $18. In this case, the pair could drop to $17 and later to $16.
Conversely, if the price turns up from the current level and surges above the downtrend line, it can invalidate the bearish setup. This could attract buying and the pair could rally to the 200-SMA.
A break and close above this level could signal an advantage for the buyers. The pair could then attempt a rally to $23.
XMR/USDT
Monero (XMR) corrects on an upward move. The price fell from $290 on April 22, suggesting that bears are posing a strong challenge near the $300 psychological level.
XMR/USDT daily chart. Source: TradingView
The XMR/USDT pair might initially drop to the 20-day EMA ($245), which is likely to act as strong support. If the price recovers from this level with strength, it will indicate that bulls are buying on dips. The pair may then attempt another break above the overhead resistance at $300. In that case, the pair could rally to $340.
Alternatively, if the price breaks below the 20-day EMA, selling may intensify and the pair could drop to the 50-day SMA ($215).
XMR/USDT 4 hour chart. Source: TradingView
The pair has fallen below the 50-SMA, suggesting that short-term traders are booking profits. If the price continues lower and breaks below $250, selling could accelerate and the pair could drop to $240 and later the 200 SMA.
Any rally is likely to be preceded by a sell at the 20-EMA. The bulls need to push and sustain the price above the 20-EMA to indicate that the correction may be over. The pair could then rally to $280 and later to $290.
Related: Monero “Falling Wedge” Breakout Positions XMR Price For A 75% Rally
APE/USDT
ApeCoin (APE) broke out of the symmetrical triangle pattern on April 19, suggesting that indecisiveness among the bulls and bears has ebbed in favor of buyers.
APE/USDT daily chart. Source: TradingView
The 20-day EMA ($13.67) is up and the RSI is in positive territory, suggesting that the bulls are in charge. There is a minor resistance at $18.44 where the APE/USDT pair turned down on April 23rd.
If the price surges up from the current levels, the bulls will attempt to push the pair above $18.44. If they succeed, the pair could climb towards $20 and later to $24. This bullish view could be invalidated in the short-term if the price turns down and breaks below the 20-day EMA.
APE/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows the pair turned down from $18 but recovered strongly from the 20-EMA. This suggests that sentiment remains positive and traders are buying on dips. If the price sustains above $17, the bulls will attempt to continue the upward move.
Although the rising 20-EMA indicates an advantage for buyers, the RSI has formed a negative divergence, suggesting that the positive momentum may be weakening. If the price turns down from current levels and breaks below the 20-EMA, selling could intensify and the pair could slide towards the 50-SMA.
CAKE/USDT
PancakeSwap (CAKE) recently bounced off the downtrend line, suggesting that the bulls had flipped levels towards support. The price broke above the 20-day EMA and is attempting to reach the 200-day SMA ($11.52).
CAKE/USDT daily chart. Source: TradingView
The 20-day EMA ($8.69) and 50-day SMA ($7.71) are gradually rising and the Relative Strength Index is in the positive territory, suggesting that the bulls have the upper hand. If buyers push the price above the 200-day SMA and sustain it, the CAKE/USDT pair could rally to $13.50 and later to $15.
Contrary to this assumption, if the price turns down from the 200-day SMA, it will indicate that the bears are not giving up and will continue to sell on rallies. The pair could then drop to the 20-day EMA. If the price bounces off this support, the likelihood of a break above the 200-day SMA increases. This bullish view could be invalidated if the price breaks below the 50-day SMA.
CAKE/USDT 4 hour chart. Source: TradingView
The 4-hour chart’s moving averages have turned up and the RSI is floating in positive territory, indicating that the bulls are gaining the upper hand. If the price turns up from the current level or the 20-EMA, the buyers will try to push the pair above the psychological $10 level. If they succeed, the pair could gain momentum.
Contrary to this assumption, if the price turns down from the current levels, the bears will try to pull the pair below the 20-EMA. If they do, the pair could slide to the 50 SMA and later the 200 SMA. A break and close below this support could indicate that the bears are back in the game.
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 involves risk, you should do your own research when making a decision.