The relief rally in the United States equities markets took a breather this week as all major averages closed in the red. Traders seem to have booked profits before the busy economic calendar next week.
The S&P 500 index dropped 3.37%, but a minor positive for the cryptocurrency markets is that Bitcoin (BTC) has not followed the equities markets lower. This suggests that crypto traders are not panicking and dumping their positions with every downtick in equities.
The range-bound action in Bitcoin suggests that traders are avoiding large bets before the Federal Reserve’s rate hike decision on Dec. 14. However, that has not stopped the action in select altcoins, which are showing promise in the near term.
Let’s look at the charts of Bitcoin and select altcoins and spot the critical levels to watch out for in the short term.
Bitcoin has been hovering around its 20-day exponential moving average (EMA) of $17,031 for the past few days. The flat 20-day EMA and the relative strength index (RSI) near 50 do not give a clear advantage either to the bulls or the bears.
The critical level to watch on the upside is $17,622. If buyers kick the price above this level, the BTC/USDT pair could start a stronger recovery that could carry it to the downtrend line. The bears are expected to defend this level aggressively.
If the price reverses direction from the downtrend line but does not fall below $17,622, it will suggest that the bulls are attempting to flip the level into support. That could enhance the prospects of a break above the downtrend line. The pair could then rally to $21,500.
On the downside, the bears may gain strength if the price breaks below $16,678. The pair could then drop to $15,995.
The pair has been trading inside an ascending channel on the four-hour chart. The bears have kept the price in the lower half of the channel, indicating selling on rallies. A break below the moving averages could pull the price to the support line of the channel. If this level fails to hold, the pair could start a down move to $16,678 in the near term.
If the price turns up from the current level or the support line of the channel, it will indicate that bulls continue to buy on dips. The pair could then attempt a rally to the overhead resistance at $17,622. If this level gets taken out, the pair could climb to the resistance line of the channel.
Monero (XMR) has been trading inside a falling wedge pattern for the past several days. The upsloping 20-day EMA ($143) and the RSI in the positive zone indicate that bulls have an edge.
The XMR/USDT pair could rise to the resistance line of the wedge, where the bulls are likely to encounter strong selling by the bears. If the price turns down from the resistance line and breaks below the moving averages, it will suggest that the pair may extend its stay inside the wedge.
Instead, if bulls drive the price above the resistance line, it will suggest a change in the short-term trend. The pair could then attempt a rally to $174 which could act as a roadblock. A break above this level could signal that the downtrend could be over.
The pair has been rising inside an ascending channel pattern on the four-hour chart. This shows that the short-term sentiment remains positive and traders are buying the dips. The pair could continue its up-move and reach the resistance line near $156. If this level is scaled, the rally may touch $162.
The first sign of weakness will be a break and close below the moving averages. The pair could then decline to the support line of the channel. A break below the channel could start a downward move to $133.
The bulls pushed Toncoin (TON) above the resistance of the symmetrical triangle on Dec. 11, indicating that the uncertainty has resolved in favor of the buyers. The symmetrical triangle usually acts as a continuation pattern, which increases the likelihood of the resumption of the uptrend.
If buyers sustain the price above the triangle, the TON/USDT pair could attempt a break above the overhead resistance zone between $2 and $2.15. If they manage to do that, the pair could pick up momentum and soar to the pattern target of $2.87.
Contrarily, if the price fails to sustain above the triangle, it will suggest that bears continue to sell on rallies. A break below the 50-day simple moving average (SMA) of $1.70 could trap the aggressive bulls, pulling the pair to the support line of the triangle.
The moving averages on the four-hour chart are sloping up and the RSI is in the overbought zone, indicating that bulls are in command. The up-move may face hindrance near $2 but if bulls sustain the price above this level, the rally could pick up speed.
If the price turns down from the current level and breaks below the 50-SMA, the selling could accelerate and the pair may slump to $1.70. This is an important level to keep an eye on because a break below it could signal that bears are back in charge.
Related: SBF ‘didn’t like’ decentralized Bitcoin — ARK Invest CEO Cathie Wood
Trust Wallet Token (TWT) has continued its northward march, suggesting that traders are buying at higher levels and not booking profits in a hurry. That increases the possibility of the extension of the uptrend.
The bulls will attempt to drive the price above the overhead resistance at $2.73. If they succeed, the TWT/USDT pair could rally to the psychological level of $3 where the bears may try to stall the up-move.
If buyers bulldoze their way through this obstacle, the uptrend could reach the pattern target of $3.51.
The bears are likely to have other plans as they will try to defend overhead resistance at $2.73. They will have to pull the price below the 20-day EMA ($2.30) to gain the upper hand.
The four-hour chart shows that bulls have been buying the dips to the moving averages. Although the moving averages are sloping up, the RSI is showing a negative divergence, indicating that the bullish momentum may be weakening. This may change if bulls thrust the price above $2.73 as that could attract further buying.
The moving averages are the critical support to watch on the downside. If the 50-SMA support collapses, several short-term traders may book profits and that could pull the pair down to $2.25 and thereafter to $2.
Axie Infinity (AXS) has been in a strong downtrend but it is showing the first signs of a potential trend change. Buyers pushed the price above the downtrend line on Dec. 5 but could not sustain the higher levels, as seen from the long wick on the day’s candlestick.
A minor positive is that the bulls have not allowed the price to break below the moving averages. This shows that buyers are trying to flip the moving averages into support.
The moving averages are on the verge of a bullish crossover and the RSI is in the positive territory, indicating that the momentum may be shifting in favor of the bulls. If the price breaks and sustains above the downtrend line, a rally to $11.85 is likely. This level is expected to act as a major hurdle on the upside.
The bullish view could invalidate in the near term if the price turns down and breaks below the moving averages. The AXS/USDT pair could then slide to $6.57.
The four-hour chart shows that bears are vigorously defending the downtrend line and the bulls are buying the dips to the 50-SMA. The 20-EMA has flattened out and the RSI is near 47, indicating a balance between supply and demand.
A break and close above $8.70 could shift the advantage in favor of the bulls. The pair could then rally to $9.28 and later to $10. Alternatively, a break below $7.86 could suggest that bears are back in the driver’s seat. The pair could then slide to $6.87.
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