The United States equity market made a strong recovery this week but Bitcoin (BTC) failed to follow suit. This means that cryptocurrency investors stay away and can worry about the problems with Silvergate bank. This fear could be the reason why the total capitalization of the crypto market dropped to almost $1 trillion.
The behavioral analytics platform Santiment said in a report on March 5 that there was a “huge spike of bearish sentiment” according to the bullish versus bearish word comparison Social Trends chart. However, the company added that “a very bearish type of sentiment could lead to a nice bounce to silence the critics.”
Another short-term positive for the crypto market is weakness in the US dollar index (DXY), which is down 0.70 in the past 7 days. This suggests that the crypto market may attempt a recovery in the next few days. As long as Bitcoin remains above $20,000, select altcoins can outperform the broader market.
Let’s study the chart of Bitcoin and four altcoins that show promise in the near term.
BTC/USDT
Bitcoin fell below the $22,800 support on March 3. The buyers tried to push the price back above the breakdown level on March 5 but the long wick on the candlestick shows that the bears are trying to flip $22,800 into resistance.
The 20-day exponential moving average ($23,159) has started to decline and the relative strength index (RSI) is below 44, indicating that the bear is trying to strengthen its position. Sellers will try to push the price below the support at $21,480. If they can pull it off, the BTC/USDT pair could retest the important support at $20,000.
If the bulls want to prevent the decline, they need to quickly break the price above the 20-day EMA. Such a move would suggest aggressive buying at lower levels. The pair could rise to $24,000 and then rally to $25,250. A break above this resistance will indicate a potential trend change.
The moving average is turning down on the 4-hour chart and the RSI is near 39. This indicates that the bears have the upper hand. If the price breaks down from the 20-EMA and breaks below $21,971, the pair can retest the support at $21,480.
However, if the bulls drive the price above the 20-EMA, it will suggest that the bears may lose their grip. The pair can then rise to the 50-simple moving average. This is an important level for bears to defend as a break above could open the gate for a rally to $24,000.
EOS/USDT
EOS (EOS) broke above the vital resistance of $1.26 on March 3 but the bulls could not hold higher levels. However, a positive sign is that the price did not fall below the 20-day EMA ($1.17).
The moving average is gradually rising and the RSI in the positive zone indicates an advantage for the bulls. The EOS/USDT pair has formed a circular bottom pattern that will end on a break and close above the $1.26 to $1.34 resistance zone. This reversal setup has a target price at $1.74.
Important support to watch on the downside is the 50-day SMA ($1.10). Buyers have not allowed prices to fall below this support since January 8th, so a break below may accelerate selling. The next support at the bottom is $1 and then $0.93.
Bears pulled the price below the 20-EMA but a small positive is that the bulls did not allow the pair to slide to the 50-SMA. This shows that the lower levels continue to attract buyers. If the price rises above the 20-EMA, the bulls will again try to clear the barrier at $1.26. If they do, the pair could rise to $1.34.
This positive view may become invalid in the near term if the price declines and falls below the 50-SMA. That can be extended to fall to $1.11.
STX/USDT
Stacks (STX) rallied strongly from $0.30 on February 17 to $1.04 on March 1, up 246% in a short time. Usually, a vertical rally is followed by a sharp decline and it happens.
The STX/USDT pair fell to the 20-day EMA ($0.69) where it found buying support. The 50% Fibonacci retracement level of $0.67 is also close, so bulls will try to protect this level with enthusiasm. On the upside, the bears will try to sell the rally in the zone between $0.83 and $0.91.
If the price drops out of this overhead zone, the sellers will attempt another correction. If $0.67 is cracked, the next support is at the 61.8% retracement level of $0.58.
Contrary to this assumption, if buyers push the price above $0.91, the pair can rise to $1.04. A break above this level will indicate a possible resumption of the uptrend. The pair could then go up to $1.43.
The 4-hour chart shows that the 20-EMA is sloping down and the RSI is in negative territory, indicating that bears have a slight edge. Sellers tend to defend moving averages during pullbacks. They will try to keep hold and sink the price to $0.65 and then to $0.56. The bulls will try to defend this support zone.
The first sign of strength will break and close above the 50-SMA. The pair was then able to rise to $0.94 and later to $1.04.
related: Binance recommends P2P as Ukraine suspends use of hryvnia in crypto exchange
IMX/USDT
ImmutableX (IMX) retook the 50-day SMA ($0.88) on March 3 and closed above the 20-day EMA ($1), indicating solid demand at lower levels.
The IMX/USDT pair may rise to $1.12 where bears will try again to prevent a recovery. If buyers bulldoze through, the pair may accelerate to stiff overhead resistance at $1.30. This is an important level to watch out for as a break and close above it could signal the start of a new uptrend. The pair may rise to $1.85.
On the contrary, if the price drops from the current level or $1.12, it will suggest that the bears have not given up. Sellers will then try to sink the pair below the 50-day SMA and gain the upper hand. If they succeed, the pair can slump to $0.63.
The 4-hour chart shows that the price is oscillating between $0.92 and $1.12. Usually, in a range, traders buy near support and sell near resistance. Price action in a range can be random and volatile.
If the price rises above the resistance, this indicates that the bulls have defeated the bears. The pair could then rally to $1.30. On the contrary, if the bears put the price below $0.92, the pair could turn negative in the near term. Support at the bottom is $0.83 and next at $0.73.
MKR/USDT
After a quick retreat, Maker (MKR) tried to continue his move. This suggests that sentiment remains positive and traders see the decline as a buying opportunity.
The upsloping moving average and the RSI in the positive area indicate that the path is the most resistance to the rise. If the buyers maintain the price above $963, the MKR/USDT pair may start traveling to the resistance zone of $1,150 to $1,170.
If the bears want to stop the bullish trend, they need to pull the price below the 20-day EMA ($807). If possible, stop some short-term traders may be affected. The pair can then move down to the 50-day SMA ($731).
The pair has been trading between $832 and $963 for some time, but the bulls are trying to push the price above the range. The 20-EMA has turned on and the RSI is in positive territory, indicating that the bulls are in command.
If the price holds above $963, the pair may try to rally towards the target price of $1,094. On the other hand, if the price falls sharply below $963, it will suggest that the breakout may be a bull trap. That could add to the consolidation for a while longer.
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