Crypto traders expect a range expansion after the Jackson Hole symposium concludes and the Fed’s perspectives on inflation, rate hikes and the health of the economy are made public. What are the critical levels to watch upstream and downstream? To find out, crypto analyst Rakesh Upadhyay analyzes the charts of the top 10 cryptocurrencies, including BTC and SHIB.
An overview of the cryptocurrency market
cryptocoin.comAs you follow, traders are avoiding placing big bets before the US Federal Reserve’s Jackson Hole Economic Symposium, which begins on August 25. In this environment, Bitcoin (BTC) and several major cryptocurrencies are trading sideways. Volatility is likely to increase as investors gain clarity on the Fed’s stance in the next few days.
On August 23, a team led by Goldman Sachs chief economist Jan Hatzius said that Fed chairman Jerome Powell’s speech on August 26 might sound like a dove. He also reiterated that the Fed is likely to move more slowly in future meetings. Analysts expect the Fed to raise interest rates by 50 basis points at its September meeting. This will remain below the 75 basis points increase in June and July.
Daily cryptocurrency market performance / Source: Coin360
Short-term price action remains uncertain. However, on-chain data shows that Bitcoin may be undervalued. So if history repeats itself, it is likely to yield strong returns. According to JJ, an analyst at Jarvis Labs, Bitcoin’s Market Cap vs. Capitalization indicator data is at its lowest level since 2015. Bitcoin’s bottom in 2015 and 2019 occurred when the indicator reached a low reading. However, this reached extremely low levels in 2022. Now it’s time for analysis…
BTC, ETH, BNB, XRP and ADA analysis
Bitcoin (BTC)
Bitcoin has been trading near the support line of the ascending channel since August 19. The bulls have successfully defended the support. However, they failed to achieve a strong recovery. This indicates that demand is drying up at higher levels.
The 20-day exponential moving average (EMA) ($22,523) has started to decline. Also, its relative strength index (RSI) is close to 41. This shows that the bears have a slight advantage. Intensification of selling is possible if the price drops below the support line of the channel. In this case, BTC is likely to drop to $18,900. To invalidate this negative view, the bulls will need to push and sustain the price above the moving averages. If they do, it is possible for BTC to gradually climb the channel’s resistance line around $26,000.
Ethereum (ETH)
The bulls are aggressively defending the 50-day simple moving average (SMA) ($1,571) as seen from the long tail on the August 22 and 23 candlestick. Ethereum will now attempt to break above the 20-day EMA ($1,712).
If this happens, it is possible for ETH to pick up momentum and rally towards the stiff overhead resistance around $2,000. Bears are expected to defend this level aggressively. Contrary to this assumption, if the price drops from overhead resistance, it will indicate that the bears are attempting to turn the 20-day EMA into resistance. ETH is likely to be stuck between the moving averages for a few more days afterward.
If the price breaks below the 50-day SMA and the $1,500 support, the selling is likely to pick up momentum. In this case, ETH is likely to decline towards the strong support at $1,280. A tight squeeze is usually followed by an expansion in volatility. However, it is difficult to precisely predict the fracture direction. Therefore, it is better to wait for the breakout to occur before starting new positions.
Binance Coin (BNB)
BNB’s recovery from $275 faced stiff resistance at the 20-day EMA ($301). A minor positive is that the bulls have not given up much ground as they expect the upward move to continue.
If the price rises from the current level and rises above $305, a rally towards the overhead resistance at $338 is possible. Such a move will create an inverted head and shoulders pattern that will complete on a break and close above $338. If this happens, BNB is likely to rally to $420 and then to $460. The model target of this bullish setup is $493.
Alternatively, BNB is likely to drop to $275 if the price drops sharply from the current level. A break below this level will complete the head and shoulders pattern. It is possible for BNB to drop to $240 and then $212 later.
Ripple (XRP)
XRP has been trading in a tight range between $0.33 and $0.35 for the past four days. This signals indecision between the bulls and bears.
If the price declines and dips below $0.33, the advantage is likely to be in favor of the sellers. XRP is likely to drop to the critical level at $0.30 later. Also, the bulls are likely to defend this level aggressively. A strong recovery from this level will suggest that XRP will remain range-bound between $0.30 and $0.39 for a while.
On the other hand, if the price rises above $0.35 and the moving averages, it will indicate that the bulls are attempting to form a base at $0.33. XRP is likely to rally to $0.39 later. This is an important level to consider. If the bulls break this hurdle, XRP is likely to rise to $0.48.
Cardano (ADA)
ADA has been trading between $0.43 and $0.47 for the past four days. Although the bulls bought the dip at $0.43, they failed to clear the overhead barrier of $0.47.
On August 24, price action formed an intraday candlestick pattern, signaling indecision among buyers and sellers. If the bulls push the price above $0.47, ADA is likely to rise to the moving averages. A break and close above this resistance is likely to open the doors for a rally to the downtrend line. Conversely, if the price declines and dips below $0.43, a slide to strong support at $0.40 is possible. This is an important level to pay attention to. Because if it is broken, ADA is likely to resume its downtrend.
SOL, DOGE, DOT, SHIB and MATIC analysis
Left (LEFT)
SOL is struggling to start a recovery as the bears pose a strong challenge near $37. The bears are now likely to try to push the price towards the strong support at $32.
The bulls successfully defended the $32 support on the previous two events. Therefore, it is possible that the level will attract repeat buyers. If the price bounces back from $32, the bulls will again try to push the SOL above the moving averages. If successful, SOL is likely to rise to the overhead resistance at $48. Buyers will have to push the price above this level to signal a possible trend change. Conversely, if the price drops and dips below $32, it means the bears are in control. SOL is likely to drop to key support at $26 later.
Dogecoin (DOGE)
DOGE broke below the trendline on August 22. However, the bulls bought the dip, as seen by the long tail on the day’s candlestick. However, the failure of the bulls to break the overhead resistance at the 50-day SMA ($0.07) is a negative sign.
The bears will try to push the price below the trendline once again. If successful, DOGE is likely to drop to $0.06. If this support is also broken, the next stop is possible at the critical level of $0.05. Contrary to this assumption, if the price rises from the current level and rises above the 20-day EMA ($0.07), it indicates strong demand at lower levels. DOGE is likely to rally to the overhead resistance at $0.08 and then $0.09.
Polkadot (DOT)
DOT is attempting to climb above the 50-day SMA ($7.81). But the bears held their ground. The long tail on the August 22 and 23 candlestick indicates strong buying at the lower levels.
The bulls will have to push the price above the 50-day SMA and the 20-day EMA ($8.07) to open the way for a possible rally. They will then head towards $9.17 and then $10. This is an important level to focus on. Because a break and close above it is possible to signal that DOT has bottomed out. The DOT is likely to rise to the overhead resistance at $12.44 later.
Conversely, if the price drops from the moving averages, it will indicate that the bears are active at higher levels. Sellers will then try to lower the DOT below $7. If they do, it is possible for the DOT to slide to $6.
Shiba Inu (SHIB)
SHIB has been trading near the 20-day EMA ($0.0000013) for the past few days. This indicates a state of indecision between SHIB bulls and bears.
The flattening of the 20-day EMA and the RSI near the midpoint suggest that the SHIB may remain range-bound for the next few days. If SHIB price stays below the 20-day EMA, a drop to $0.000012 is possible. This is an important support for the bulls’ defense. Because a break below this is likely to open the doors for a drop to $0.000010. Alternatively, if SHIB price rallies above $0.0000014, SHIB could start its journey towards $0.0000018. The bulls will have to break through this hurdle to signal the start of a new uptrend.
Polygon (MATIC)
While the bulls are buying the dips, MATIC has been rising along the 50-day SMA ($0.82) for the past four days. The bears will try to stop the recovery at the 20-day EMA ($0.86).
If the price breaks from the 20-day EMA, the bears will make another attempt to sink the MATIC below the critical level at $0.75. If this happens, it is possible for MATIC to slide to the next major support at $0.63. Alternatively, if the $0.75 support holds, MATIC will attempt to climb above the 20-day EMA and move higher to the overhead resistance at $1.05. The bulls will have to break through this hurdle to signal the resumption of the uptrend.
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