European and US stock markets were both in the red on August 22nd as investors feared that aggressive interest rate increases might not be off the table.
Another thing keeping investors nervous may be the upcoming Jackson Hole Economic Symposium, which is set to begin on August 25. Investors are concerned that Federal Reserve Chairman Jerome Powell could provide more details about the Fed’s hawkish stance and its plans to raise interest rates in the future.
This overall uncertainty has kept institutional investors away from the cryptocurrency markets. CoinShares data showed that crypto investment products recorded a weekly volume of $1 billion, which is 55% lower than the annual average.
Daily cryptocurrency market performance. Source: Coin360
Materials indicators for the on-chain analytics resource said that Bitcoin (BTC) did not break below its July lows. This indicates that the bear market rally is not over yet. However, buyers will have to push the price above the 200-week moving average near $23,000 to gain the upper hand.
Can Bitcoin and most cryptocurrencies come back strong in the next few days and what are the critical levels to watch out for? Let’s study the charts of the top 10 cryptocurrencies to find out.
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BTC / USDT
Buyers defended the support line of the ascending channel on August 19th and started rebounding but the recovery stalled at $21800. This indicates that the bears are posing a strong challenge near the moving averages.
BTC/USDT daily chart. Source: TradingView
The simple positive is that the long tail of the August 22 candlestick shows that the bulls are trying to defend the support line aggressively. If the bulls push the price above $21,800, the BTC/USDT pair could rise to the 20-day exponential moving average (EMA) ($22,725).
If the price drops from this resistance, it will indicate that sentiment has turned negative and that traders are selling on rallies. This could increase the possibility of a breakout below the channel. If that happens, the selling momentum could pick up and the pair could drop towards the June 18 low at $17,622.
Conversely, if the buyers push the price above the 20-day moving average, this will indicate that the pair may extend its stay inside the channel for a few more days. The bulls will then try to push the price towards the channel resistance line.
ETH / USDT
Ether (ETH) fell below the 20-day moving average ($1,718) and the breakout level at $1,700 on August 19, indicating that traders who bought at lower levels were exiting their positions.
ETH/USDT daily chart. Source: TradingView
The bulls tried to stop the decline at the 50-day simple moving average (SMA) ($1549) but the weak bounce indicates the lack of strong buying at this level. This increases the possibility of a break below the support.
If that happens and ETH/USDT breaks below $1,500, the selling may intensify as the bulls may wait for the price to reach the next strong support before buying again. Thus, the pair could drop to $1,280.
Conversely, if the price bounces off the current level and rises above the 20 day moving average, then traders who did not buy at the 50 day simple moving average may buy aggressively for fear that they miss the bullish move. That price could fetch around $2000.
BNB / USDT
Binance Coin (BNB) is bouncing off the strong support at $275 and facing heavy resistance at the 20-day moving average ($301) but the small positive is that the bulls have not ceded ground to the sellers. This indicates that buyers expect the recovery to continue further.
BNB/USDT daily chart. Source: TradingView
If the price rises above the 20-day moving average, the BNB/USDT pair could rise to the general resistance at $338. This is an important level to watch because a breakout and closing above it will complete the bullish inverse head and shoulders pattern. This setup has a pattern target of $493.
It may not be a direct rally to the target as the bears may try to stop the rally at $420 and then again at $460.
Conversely, if the price breaks below the current level and breaks below $275, the pair will complete a short-term head and shoulders pattern. That could start to decline towards the pattern target at $212.
It is best to wait for either form to complete before creating a position because settings tend to break more often.
XRP / USDT
Ripple (XRP) is still stuck within the range between $0.30 and $0.39. The bulls are trying to defend the support at $0.33 but are facing stiff resistance at higher levels.
XRP/USDT daily chart. Source: TradingView
If the price drops and breaks below $0.33, the probability of a drop to $0.30 increases. This level was previously a strong support; Thus, traders may buy on the dip, anticipating a rise to $0.39.
Another possibility is that the price rebounded from $0.33 and broke above
