bitcoins (BTC) rebounded to near $24,500 on Aug. 17, indicating that the rally is still facing strong resistance from the bears. On-chain monitoring resource Material Indicators said demand liquidity on the Fire Charts was similar to previous local highs.
Another reason for caution among crypto investors was that the recovery in the The S&P 500 was reaching extreme overbought levels Short term. Jurrien Timmer, director of global macroeconomics at asset manager Fidelity Investments, said 88% of S&P 500 stocks were trading above their 50-day moving average, which was “breathtaking”.
Some were also cautious, like Michael Burry, the investor who sold short the 2008 housing bubble, almost emptied his stock portfolio in the second quarter of this year in expectation of a sharp fall in the stock markets.
While the short term looks uncertain, corporate investors who are typically in the long term game have increased their investments in the blockchain industry, including the crypto space. Top 40 listed companies has invested around $6 billion in blockchain startups between September 2021 and June 2022, according to an August 17 Blockdata blog post. That’s more than three times the $1.9 billion invested by companies between January 2021 and September 2021.
What are the critical downside levels that suggest the recovery may be running out of steam? Let’s study the charts of the top 10 cryptocurrencies to find out.
The bulls attempted to push Bitcoin above the overhead resistance at $24,668 on August 17, but the long wick on the candlestick shows that the bears are aggressively defending the level. The price moved lower and reached the 20-day exponential moving average (EMA) ($23,496). This level is likely to attract strong buying by the bulls.
The 20-day EMA flattened out and the Relative Strength Index (RSI) fell near the midpoint, indicating a balance between supply and demand. If the price holds below the 20-day EMA, the scale could tip in favor of the bears and the pair could drop to the 50-day SMA ($22,160).
Conversely, if the price rebounds from the current level and breaks above $25,200, it will suggest that the bulls are back in command. The BTC/USDT pair could then rally to $28,000 where the bears could once again mount a strong defense.
Ether (ETH) rose from $1,853 on August 16 and bulls attempted to push the price above $2,000 on August 17. However, the long wick on today’s candlestick suggests that traders could lighten their positions on rallies.
The bears will try to take advantage of the situation and attempt to pull the price towards the strong support zone between the 20-day EMA ($1,772) and $1,700. This is an important area for bulls to defend if they want to keep the uptrend intact.
If the price bounces off this support zone, the ETH/USDT pair could retest the resistance at $2,030. A break and close above this level could pave the way for a rally towards the downtrend line.
Instead, if the support at $1,700 cracks, the pair could fall to the 50-day SMA ($1,492). This could delay the start of the next leg of the upward move and keep the pair rangebound for a few days.
Buyers tried to push BNB higher on August 17, but the long wick on the candlestick suggests the bears are active at higher levels. This pulled the price up from the 20-day EMA ($307).
If the price slips below the 20-day EMA, the BNB/USDT pair could drop to the 50-day SMA ($270). This level may again attract buyers and if the price rebounds, the pair could consolidate between $270 and $338 for a while.
Another possibility is that the price might rebound forcefully off the current level. If this happens, it will suggest that sentiment remains positive and traders are buying lower. The bulls will then attempt to breach the overhead resistance zone between $338 and $350 again. If successful, the pair could start a rally to $383 and then to $413.
The bulls successfully defended the area between the moving averages and attempted to push Ripple (XRP) above overhead resistance at $0.39 on Aug 17. The long wick on today’s candlestick shows that the bears are unwilling to surrender and they continue to defend overhead resistance with vigour.
If the price breaks and closes below the 20-day EMA ($0.37), the next stop could be the 50-day SMA ($0.35). This is an important level for bulls to defend, as a breakout and close below could suggest that the XRP/USDT pair could continue its range-bound action between $0.30 and $0.39 for a while. a few more days.
Alternatively, if the price bounces off the moving averages, the bulls will again try to breach the overhead hurdle at $0.39. If they succeed, the pair could rally to $0.48 and then to $0.54.
Cardoon (ADA) bounced off the $0.55 breakout level on August 16, but the bears continue to pose a strong challenge at higher levels, as seen by the long wick of the August 17 candlestick.
The strong selling by the bears pulled the price towards the important support of the EMA at $20 ($0.53). A breakout and close below this level will suggest that the short-term advantage has tilted in favor of the sellers. The ADA/USDT pair could then decline to the 50-day SMA ($0.49).
Conversely, if the price bounces off the 20-day EMA, it will suggest strong demand at lower levels. The bulls will then attempt to resume the bullish move by pushing the pair above $0.60. This could open the doors for a possible rally to $0.63 and then to $0.70.
Solana (FLOOR) attempted to bounce off the 20-day EMA ($42), but the long wick of the August 17th candlestick shows that the bears are selling on every minor upside.
The bears will try to drive the price down below the support line. If they succeed, it will invalidate the developing bullish ascending triangle pattern. The SOL/USDT pair could then decline to $37.50 and later to $34.50.
Alternatively, if the price bounces off the moving averages, it will indicate that the bulls may accumulate on the lows. The buyers will then try to push the price above the overhead resistance at $48. If successful, the bullish setup will end and the pair could start a rally to $60.
Bears Pulled Dogecoin (DOGE) below the $0.08 breakout level on August 15, but could not hold the lower levels. The bulls bought the decline aggressively and resumed the rally on August 16th.
The bears attempt to block the rally to $0.09, but if the bulls do not allow the price to drop below $0.08, the likelihood of a rally to $0.10 increases. This is an important level to watch, as a breakout and close above it could signal a potential trend change.
The 20-day EMA ($0.07) has started to rise and the RSI is in positive territory indicating that the bulls have the upper hand. To invalidate this bullish view, the bears will have to sink and hold the price below the triangle trendline.
The bulls successfully defended the 20-day EMA ($8.62) on August 15-16, but were unable to pull off a strong rebound. Attempts by the bulls to push Polkadot (POINT) above the overhead resistance at $9 encountered strong resistance on August 17th.
The bears are trying to keep the price below the 20-day EMA. If they succeed, it could trap several aggressive bulls that could have bought at higher levels. This could push the DOT/USDT pair into the 50-day SMA ($7.72).
Conversely, if the price rises from the current level and breaks above $9, it will suggest that the bulls are buying aggressively at lower levels. The bulls will then attempt to push the pair above the overhead resistance at $9.68 and resume the rally. The pair could then rally to $10.80 and later to $12.44.
Shiba Inus (SHIB’s) the correction stalled at $0.000015 on August 15, but the bulls are facing strong resistance at the overhead resistance of $0.000017, as seen in the long wick of the August 16-17 candlesticks.
The inability to clear the overhead hurdle may embolden the bears who will attempt to pull the price towards the strong support at $0.000014. This is an important level for bulls to defend, as a breakout and close below could weaken the positive momentum.
The SHIB/USDT pair could then remain stuck in a wide range between $0.000010 and $0.000018 for a few days.
Alternatively, if the price rises from the current level and breaks above the overhead resistance zone from $0.000017 to $0.000018, the pair could reach $0.000022. If the bulls clear this hurdle, the rally could extend to $0.000026.
Avalanche (AVAX) continues to slide towards the breakout level of $26.38. Bulls are likely to buy the dip and attempt to turn this level into support.
If the price rebounds from $26.38 with strength, the buyers will again try to push the AVAX/USDT pair above the broad resistance at $31. If successful, the pair could rally back to $33 and later to the pattern target of $39.05.
Contrary to this assumption, if the price falls below the breakout level, several aggressive bulls can be trapped. This could lead to a decline in the 50-day SMA ($22.70) and then the ascending triangle support line.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research before making a decision.
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