US stock markets saw a sharp comeback last week, led by the Nasdaq Composite, which rose 7.5%. The S&P rose about 6.5% for the week while the Dow Jones Industrial Average gained 5.4%.
Continuing its close association with the stock market, the cryptocurrency markets are also trying to rally. Bitcoin (BTC) has seen a modest recovery but some altcoins have risen sharply in the past week. This indicates that investors are taking advantage of the sharp drop in price to accumulate altcoins at lower levels.
View daily crypto market data. Source: Coin360
Smaller investors use the drop in Bitcoin to build their position into at least one Bitcoin. Glassnode data shows that the number of Bitcoin wallet addresses with more Bitcoins increased by 873 between June 15 and June 25.
Can recovery in Bitcoin and altcoins gain momentum? Let’s examine the charts of the top 5 cryptocurrencies that could charge higher fees in the short term.
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BTC / USDT
Bitcoin’s relaxed rally is facing heavy resistance near $22,000 as evidenced by the long wick on the June 26 candlestick. This indicates that the bears are not willing to give up their advantage and are selling on rallies.
BTC/USDT daily chart. Source: TradingView
The sellers will attempt to pull the price towards the vital $20,000 support. This is an important level to watch because the bounce will suggest that the bulls are trying to make a higher bottom.
That could boost the odds of a break above the 20-day exponential moving average ($23,155). If that happens, the BTC/USDT pair could signal a possible change in trend. The bulls will then try to push the price towards the 50-day simple moving average ($27,424).
Conversely, if the price drops and falls below $20,000, this will indicate that the bears are still in control. The sellers will then try to sink the BTC/USDT pair to the crucial level of $17,622.
4 hour BTC/USDT chart. Source: TradingView
The failure of the bulls to push the price to the 38.2% Fib retracement level of $23,024 indicates a lack of demand on the higher levels. The moving averages have flattened and the RSI is slightly above their midpoint, indicating range-bound action in the near term.
If the price breaks below the moving averages, the pair may drop to $20,000. A break below this support could indicate weakness.
Alternatively, if the price bounces off the moving averages, it will indicate that bulls are buying on dips. The bulls will then attempt to push the price towards $23,024. If this level is exceeded, the next stop could be the 50% retracement level of $24,693.
UNI / USDT
Uniswap (UNI) rebounded sharply from $3.33 on June 18 and reached the severe overall resistance at $6.08. Bears are defending the level aggressively but the small positive is that the bulls haven’t given up much ground.
UNI/USDT daily chart. Source: TradingView
The moving averages are close to completing a bullish crossover and the RSI is in positive territory, indicating that the path of least resistance is to the upside.
If the buyers push the price above $6.08, bullish momentum could increase and UNI/USDT could rise to $8. This level again could be a strong hurdle but if the bulls beat it, the next stop could be $10.
Conversely, if the price breaks below the current level and breaks below the 20-day EMA ($4.90), it will indicate that the trend is still negative and traders are selling near the resistance levels. The pair could then drop around $4.
UNI/USDT 4-hour chart. Source: TradingView
The bears are trying to stop the recovery near the upper resistance at $6.08, but the bullish moving averages on the 4 hour chart are indicating that the bulls have the upper hand in the near term.
If the bounce above the 20-EMA continues, it may increase the possibility of a break above $6.08. If that happens, the pair could gain momentum and rise to $6.66 and then to $7.34.
Another possibility is for the pair to decline and break below the 20-EMA. In this case, the pair can slip to the 50-SMA. A break below this support could invalidate the upside.
XLM / USDT
Stellar (XLM) was in a strong downtrend but the bulls are trying to bottom near $0.10. Buyers pushed the price above the 20-day moving average ($0.12) on June 24 but were unable to clear the hurdle at the 50-day simple moving average ($0.13).
XLM/USDT daily chart. Source: TradingView
The simple positive is that the bulls did not allow the price to slide below the 20-day EMA ($0.12). The 20-day stable EMA and the RSI near its midpoint indicate that the bulls are trying to return.
If buyers push the price above the 50-day SMA, the XLM/USDT pair may attempt to rise to the general resistance at $0.15. If this level is cleared, I