Cryptocurrency markets and the United States equity market witnessed profit-paying this week as macroeconomic data showed continued rate hikes by the Federal Reserve. Bitcoin (BTC) fell more than 4% and the S&P 500 fell 2.7% to record its worst week of the year.
The CME FedWatch tool shows a 73% chance of a 25-basis-point rate hike by the Fed at its March meeting but after reading warmer-than-expected inflation in two weeks, the likelihood of a 50-basis-point rate hike has begun to slow. gain traction.
During periods of uncertainty, some coins went into deeper corrections, but some bucked the trend and continued to outperform the market. Therefore, it becomes important to choose the right coin to trade.
A few coins that have witnessed a shallow correction or have bounced too much off support have been selected in this list. Let’s look at the chart and determine which levels to watch out for.
BTC/USDT
Bitcoin fell below its 20-day exponential moving average ($23,391) on February 24 but the bears could not build on the gains and supported the price below the strong support at $22,800.
The price rebounded to $22,800 on February 25 and the bulls tried to push the price above the 20-day EMA. If it does, it would indicate that the BTC/USDT pair could consolidate between $25,250 and $22,800 for a few days.
The flat 20-day EMA and the relative strength index (RSI) near the midpoint also suggest a near-term action.
Alternatively, if the price falls below $22,700, selling may increase and the pair may drop to the next strong support at $21,480.
The 20-EMA has declined on the 4-hour chart and the RSI is in negative territory. This shows an advantage for the bears. Sellers will try to protect the 20-EMA and if the price drops from this level, the probability of a break below $22,800 increases. If this happens, selling could intensify and the pair could slide towards $21,480.
On the contrary, if the price breaks above the 20-EMA, it will suggest that bulls buy on dips. That could push the pair to the 50-simple moving average and keep the price stuck for a while longer.
LDO/USDT
Lido DAO (LDO) did not hold below the 20-day EMA ($2.75) during the recent correction, which is a positive sign. Another bullish sign is the formation of a pennant near a local high.
The bulls will try to push the price above the pennant resistance line. If they succeed, the LDO/USDT pair can start the next leg of the up-move. The pair may rise to $3.90 and then try to rally to $4.24.
On the contrary, if the price falls from the resistance line, it will suggest bear selling in a rally. That could keep the price in the pennant longer. Bears need to put the price below the flag if they want to signal a short-term trend reversal.
A strong bounce off the support line of the pennant indicates aggressive buying on dips. Buyers must overcome obstacles in the resistance line to regain control. If they do, the pair can continue their ascent.
However, the bear has other plans as it will try to protect the resistance line. If the price falls from this level, the equilibrium situation may continue for some time.
A break below the pennant can attract profit-booking by short-term traders. That can tug the price to $2.20 and later to $2.
EGLD/USDT
MultiversX (EGLD) declined from the resistance line but an encouraging sign is that the bulls are trying to defend the 20-day EMA ($47).
Both moving averages are sloping upwards and the RSI is above 54, indicating that buyers have a slight edge. The bulls will try to push the price to the resistance line where they are again likely to face strong opposition from the bears.
This bullish view may become invalid in the near term if the price declines and falls below the 20-day EMA. That will show selling by bears in every small rally. The EGLD/USDT pair could then go down to the 50-day SMA ($44) and later to $40.
The 4-hour chart shows that the price is falling in a descending channel pattern. Buyers are buying at lower levels and have pushed the price to the resistance line of the channel. If this resistance gives way, the pair can rise to the 50-SMA and then try again from the strong barrier at $54.
On the contrary, if the price falls from the resistance line, it will suggest that the bear does not give up. That can cause a drop to the support line of the channel.
related: How does the US Dollar Index (DXY) affect cryptocurrencies? Watch the Macro Market
THETA/USDT
Bulls are trying to capture the pullback of Theta Network (THETA) at the 20-day EMA ($1.15). Both moving averages are sloping upwards and the RSI is in positive territory, indicating an advantage for the bulls.
If buyers push the price above the downtrend line, the THETA/USDT pair may rise to overhead resistance at $1.34. This is a formidable resistance and a break above it could open the gate for a possible rise to $1.70.
However, if the price breaks down and breaks below the 20-day EMA, it will suggest that the short-term bulls may exit soon. This may initiate a deeper correction to the 50-day SMA ($1.05) and then to psychological support at $1.
The 4-hour chart shows the formation of a symmetrical triangle pattern. The two moving averages have flattened out and the RSI has been oscillating near the middle, indicating a balance between supply and demand.
A break below the triangle can tilt the short-term advantage in favor of the bear. The pair was able to first drop to $1.12 and then to $1.
If the bulls want to prevent the decline, they need to quickly push the price above the triangle. That can start the journey for $1.27 and later for $1.30.
CLAY/USDT
Klaytn (KLAY) is trying to break out of the base pattern. The price rebounded from the 20-day EMA ($0.26) on February 25, indicating solid buying on dips.
Bulls will try to pierce overhead resistance at $0.34. If they do, the KLAY/USDT pair could pick up momentum and soar toward psychological resistance at $0.50. Such a move would signal a potential trend change.
If the price drops from $0.34, it will show that the bears are very protective of that level. That can again pull the price down to the 20-day EMA. A break below this level can indicate that the pair can spend some more time in the base pattern.
The bulls caught a pullback near the 61.8% Fibonacci retracement of $0.26 and started a recovery. There is a small resistance at $0.32 but if this level is crossed, the pair can try to rally to $0.34 and then to $0.37.
On the other hand, if the price falls from the overhead resistance, it will suggest that the bears are selling in rallies. That could increase the prospect of a break below $0.26. If that happens, the pair can slide to $0.22.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.