U.S. cryptocurrency and stock markets struggled to recover on September 22 amid contagion fears over Chinese developer Evergrande’s default on debt cuts. Ray Dalio, co-chair and co-director of Bridgewater Associates’ investment desk, said on September 22 that Evergrande’s debt was “manageable.”
Min Tan, director of rating agency Standard & Poor’s, said the Chinese government could step in and restructure Evergrande.
The Crypto Fear & Greed Index fell to 21, indicating intense fear among investors. However, Galaxy Digital CEO Mike Novogratz told CNBC that cryptocurrency markets remain in good shape as long as Bitcoin (BTC) is above $40,000 and Ether (ETH) is above $2,800.
Daily market indices for cryptocurrency. Source: Coin360
Traders can now turn their attention to the Federal Reserve’s policy statement on economy and rents on September 22, followed by a press conference by Federal Reserve Chairman Jerome Powell.
Can Bitcoin and altcoins withstand a rebound, or will higher levels attract bearish sales? Let’s take a look at the top 10 cryptocurrency charts to find out.
BTC / USDT
Bitcoin fell below the neck on September 21 and completed a bearish head and shoulders pattern. On the positive side, however, on September 22nd the bulls put the price back in their necks. This indicates strong buying at lower levels.
BTC/USDT daily chart. Source: TradingView
If buyers keep the price above their necks, they can catch some aggressive bears, which could lead to a short term hug. The BTC/USDT pair could then move up to the 20-day exponential moving average (EMA) ($46,038), where the bears could be a big problem.
The moving averages have completed a bearish cross and the Relative Strength Index (RSI) is in negative territory, indicating bears in control.
If the price does not stay above the neck, the bears will try to continue the downtrend. Initial support on the downside is $37332.70, then a target for the pattern is $32423.05.
The breakout and closing above the moving averages will be the first indication that the correction is over.
ETH / USDT
Ether dropped to nearly $3,000 on September 20, completing a bearish head and shoulders pattern. Throat eruptions are usually retested and this is what happened on September 22nd.
ETH/USDT daily chart. Source: TradingView
The moving averages have completed a bearish cross, and the RSI is in negative territory, indicating the advantage of the bears. If the price reverses from the current level, the bears will attempt to resume the downside move towards the target pattern at $1,972.12.
Conversely, if the bulls support the price above $3000, this will indicate a buildup in deflationary periods. Then the ETH/USDT pair could rise to the 20-day moving average ($3,303), which could act as a strong resistance once again. A breakout and a close above this level could signal that the bulls are back in play.
ADA / USDT
Cardano (ADA) is in a strong rebound phase, but the bulls are trying to cap the decline near the strong support to $1.94, where they are likely to hit a wall of the 20-day EMA ($2.38).
ADA/USDT daily chart. Source: TradingView
The moving averages are close to completing a bearish crossover, and the RSI is in negative territory, indicating that the bears have an advantage. If the price returns from the 20-day moving average, the bears may challenge the $1.94 support once again.
A break and end below this level could open the door for further declines to $1.60. The bulls should push the price and hold it above the 20 day EMA to signal the beginning of a sustainable recovery. Then the ADA/USDT pair could rise to $2.60 and then $2.80.
BNB / USDT
Binance Coin (BNB) broke the September 7 low of $369 on September 20 and reached a strong support at $340 on September 21. The bulls are currently trying to defend this level.
BNB/USDT daily chart. Source: TradingView
The moving averages completed a bearish cross, and the RSI was below 41, which indicates the advantage of the bears. Any pullback is likely to be met with strong sales around the 20-day moving average ($410).
If the bears break below $340, BNB/USDT may drop to $300 for psychological support and then to $250. This negative outlook will reverse if the bulls push in and keep the price above the $433 upper resistance.