Bitcoin continues to consolidate around $20,000 as traders shift their focus to XRP, UNI, QNT and EGLD. Crypto analyst Rakesh Upadhyay examines the charts of 4 altcoin projects that look interesting in the near term, along with Bitcoin.
An overview of the cryptocurrency market
With the US dollar near several-year highs and US equity markets near June lows, it has been difficult for the Bitcoin (BTC) and crypto markets to initiate a strong sustained recovery. This shows that sentiment is negative and traders are not interested in taking risks in their portfolios.
US stock markets plunged sharply on October 7 after the release of NFP data for September. But it has managed marginal gains for this week. Last week, the S&P 500 rose 1.5% and the Nasdaq Composite 0.7%. Meanwhile, Bitcoin is on track to finish the week with marginal gains of around 2%.
Daily view of crypto market data / Source: Coin360
cryptocoin.comAs you follow, over the past few days, Bitcoin has managed to avoid a crash even when the US stock markets are clogged. This is the first indication that selling pressure may ease and traders may not be willing to leave their holdings at lower levels. However, for a sustainable recovery, Bitcoin will need some support from the return of risk-based sentiment. Until then, the volatile range-bound movement is likely to continue, with certain altcoin projects offering trading opportunities.
Leading crypto Bitcoin (BTC) is in the first place
Bitcoin is struggling to stay above the 50-day simple moving average ($19,961). This shows that the bears have not given up yet. Sellers pushed the price below the 20-day exponential moving average ($19,628) on Oct. However, they were unable to extend the decline to the support at $18,626. This shows that the bulls are buying on the dips and trying to create a higher low in the short term.
The flat 20-day EMA and the relative strength index (RSI) just below the midpoint suggest a balance between supply and demand. Buyers will have to push and sustain the price above the downtrend line to gain the upper hand. It is possible for BTC to rally to $22,800 later on, where the bears can form a strong defense again.
On the downside, the bears may find it difficult to push the price below the $18,626 to $17,622 zone as the bulls are expected to defend the area with all their might. Still, if the region cracks, BTC is likely to start the next leg of the downtrend. BTC is likely to drop to $15,000 later.
The failure of BTC to rise above the $20.475 resistance may have encouraged short-term investors to take profits. It is possible that this may have driven the price below the moving averages. A minor positive, however, is that the bulls buy the drop to the uptrend line.
If the price rises above the moving averages, BTC is likely to rise again to $20,475. The bulls will have to push and sustain the price above this resistance to complete an ascending triangle pattern. If this happens, it is possible for BTC to rally to the $22,825 pattern target. This bullish pattern will be rejected at a breakout and close below the uptrend line. If this happens, it is possible for the sell-off to intensify and BTC to slide towards the strong support at $18,125.
Ripple (XRP) first altcoin in focus
XRP bounced off the 20-day EMA ($0.47) on Oct. This shows that lower levels are attracting buyers. The rising 20-day EMA and the RSI near the overbought zone suggest that the bulls have the upper hand.
If the price rises and rises above the overhead resistance at $0.56, XRP is likely to rally to $0.66. It is possible that this level will again pose a strong challenge. However, if the bulls surpass this, the upward move is likely to extend to $0.80. Instead, if the price drops from $0.56, the bears will pull XRP back to the 20-day EMA. If this support is broken, XRP is likely to drop to the breakout level of $0.41. A strong bounce from this level is possible to keep the price range between $0.41 and $0.56 for a while.
The altcoin is slowly climbing towards the overhead resistance at $0.56. Both moving averages are gradually rising and the RSI is in the positive territory. This shows that buyers have an advantage. The altcoin fell from $0.53, but the bulls successfully defended the 20-EMA. If the buyers push the price above the $0.53 to $0.56 resistance zone, the upside move is likely to gain momentum. A break and close below the 20-EMA will be the first sign that the bulls are losing control. XRP is likely to drop to the 50-SMA and then $0.44 later.
Uniswap (UNI) another altcoin in focus
UNI is trading above the moving averages. This indicates that the bulls are trying to continue the recovery. That’s one of the reasons it’s included.
The price dropped from the overhead resistance at $7. However, the bulls are trying to stop a correction at the 20-day EMA ($6.42). If the price bounces back strongly from the current level, it will indicate that buyers are using the dips to save. The bulls will then try to push the price back above the overhead resistance zone between $7 and $7.36. If successful, UNI is likely to rise to $8.67. Conversely, if the price declines and dips below $6, a drop to the strong support at $5.66 is possible for UNI.
UNI fell sharply from overhead resistance at $7 and settled below the moving averages. This suggests that the bears have the upper hand in the near term. If the price declines from the moving averages, it is possible to increase selling. Thus, UNI is likely to drop to $6.20 and then to $6. To avoid this downside, the bulls will need to push and sustain the price above the moving averages. If that happens, it is possible for UNI to test the stiff resistance once again at $7. If this hurdle is overcome, UNI is likely to rise to $7.36.
The third subcon of the list is Quant (QNT)
QNT completed the inverted head and shoulders pattern on September 27. Thus, in the retest on October 2, he turned the neck control line to support.
The rally over the past few days has sent the RSI into the overbought territory. Therefore, the altcoin is close to the overhead resistance at $162. This is likely to cause problems for the bulls. However, the dips are likely to be bought. If the price bounces back from the 20-day EMA, it will indicate that sentiment has shifted from selling on rallies to buying on dips. This is likely to increase the likelihood of a break above $162. If this happens, it is possible for QNT to rally to the $200 and then $230 model target. If the bears want to invalidate this positive view, they will have to push the price below the neckline and the 50-day SMA ($112).
The altcoin has witnessed a sharp rally since it broke $147. Vertical rallies are rarely sustained and result in consolidation or correction. In this case, the price is likely to drop to the 20-EMA, which is an important support for the bulls’ defense. If the price bounces back from this support, it will suggest that the bulls will continue to view the dips as a buying opportunity. A break and close above $162 is likely to start the next leg of the up move. Alternatively, if the price drops sharply from the current level and dives below the 20-EMA, it will indicate that the bulls may be in a rush for an exit. It is possible that this will bring the QNT down to $130.
Latest altcoin Elrond (EGLD)
EGLD broke above the moving averages on October 3 and the 20-day EMA ($51) started to rise. This indicates a potential trend change in the near term. This is the reason for your choice.
EGLD is facing resistance near $57. However, a positive sign is that the bulls are not giving up much ground. This shows that traders are not abandoning their positions as they expect the recovery to continue. If the bulls propel the price above $57, EGLD is likely to gain momentum and move higher to $62 and then $70. On the other hand, if the price drops from $57 and dips below $53, the bears will pull EGLD to the moving averages. If this support is broken, a drop to the $47-45 region is possible for EGLD.
After the sharp rally from $47 to $57, the altcoin is correcting in a descending channel pattern. If buyers push the price above the channel, EGLD is likely to retest the resistance at $57. A break above this level likely indicates a resumption of the uptrend. On the contrary, if the price declines and dips below the 20-EMA, it suggests that EGLD will spend some more time inside the channel. The bears will have to push the price below the channel to open the doors for a possible drop.
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