A relief rally in the United States equity markets took a breather this week as all major averages closed in the red. Traders appear to have booked profits ahead of next week’s busy economic calendar.
The S&P 500 index fell 3.37%, but a slight positive for cryptocurrency markets is that Bitcoin (BTC) did not follow equity markets lower. This shows that cryptocurrency traders do not panic and unload their positions with every drop in stocks.
Bitcoin’s range-bound action suggests traders are avoiding big bets ahead of the Federal Reserve’s interest rate hike decision on December 14. However, this has not stopped the movement in selected altcoins that show promise in the near term.
Let’s look at the charts of Bitcoin and select altcoins and note the critical levels that we should pay attention to in the short term.
BTC/USDT
Bitcoin has been hovering around the 20-day exponential moving average (EMA) of $17,031 for the past few days. A flat 20-day EMA and relative strength index (RSI) near 50 do not clearly favor either the bulls or the bears.
A critical level to watch from the upside is $17,622. If buyers push the price above this level, the BTC/USDT pair could start a stronger recovery that could take it to the downside. Bears are expected to defend this level aggressively.
If the price reverses from the downtrend line, but does not break below $17,622, it will indicate that the bulls are trying to turn the level into support. This could increase the prospects of a break above the downtrend line. The pair can then go up to $21,500.
On the downside, bears could gain strength if the price breaks below $16,678. The pair can then drop to $15,995.
The pair is trading within a rising channel on the four-hour chart. Bears have held the price in the lower half of the channel, indicating selling in rallies. A break below the moving averages can pull the price to the support line of the channel. If it fails to hold this level, the pair may start a decline towards $16,678 in the near term.
If the price rises above the current level or the support line of the channel, it will indicate that the bulls are continuing to buy on the downside. The pair may then attempt to climb above the overhead resistance at $17,622. If this level is removed, the pair may rise to the resistance line of the channel.
XMR/USDT
Monero (XMR) has been trading within a falling wedge pattern for the past few days. A rising 20-day EMA ($143) and an RSI in the positive zone suggest that the bulls have an edge.
The XMR/USDT pair may rise to the resistance line of the wedge where the bulls are likely to face strong selling by the bears. If the price breaks below the resistance line and falls below the moving averages, it will suggest that the pair may extend its stay in the wedge.
Instead, if the bulls break the price above the resistance line, it will suggest a change in the short-term trend. The pair may then try to rise above $174, which could act as a barrier. A break above this level may signal the end of the downtrend.
The pair is rising within an ascending channel pattern on the four-hour chart. This indicates that short-term sentiment remains positive and traders are buying the dips. The pair may continue its rise and reach the resistance line near $156. If this level scales, the rally could reach $162.
The first sign of weakness will be a break and close below the moving averages. The pair can then descend to the support line of the channel. A break below the channel could initiate a move down to $133.
TON/USDT
Bulls pushed Toncoin (TON) above the symmetric triangle resistance on December 11, indicating that uncertainty has resolved in favor of buyers. A symmetrical triangle usually acts as a continuation pattern that increases the likelihood of a bullish recovery.
If buyers hold the price above the triangle, the TON/USDT pair may attempt to break above the overhead resistance zone between $2 and $2.15. If they can do that, the pair could gather momentum and move towards the $2.87 pattern target.
Conversely, if the price fails to break above the triangle, it will suggest that the bears continue to sell in rallies. A break below the 50-day simple moving average (SMA) of $1.70 could trap aggressive bulls and pull the pair to the triangle support line.
On the four-hour chart, the moving averages are trending higher and the RSI is in an overbought zone, indicating that the bulls are in command. The upside may face a hurdle near $2, but if the bulls hold the price above that level, the rally could accelerate.
If the price breaks below the current level and falls below the 50-SMA, selling may accelerate and the pair may fall to $1.70. This is an important level to watch out for, as a break below it could indicate that the bears are back in charge.
Related: SBF ‘didn’t like’ decentralized Bitcoin — ARK Invest CEO Cathie Wood
TWT/USDT
Trust Wallet Token (TWT) continues its northward march, indicating that traders are buying higher and not in a rush to take profits. This increases the probability of an extension of the uptrend.
The bulls will try to push the price above the upper resistance at $2.73. If they succeed, the TWT/USDT pair could rise to the psychological level of $3, where the bears could try to stop the upward movement.
If buyers bulldoze their way past this barrier, the bullish trend could reach the $3.51 target.
Bears may have other plans as they look to maintain overhead resistance at $2.73. To take advantage, they will need to pull the price below the 20-day EMA ($2.30).
The four-hour chart shows that bulls are buying dips to moving averages. While the moving averages are trending higher, the RSI is showing a negative divergence, indicating that the bullish momentum may be weakening. That could change if the bulls push the price above $2.73, as that could attract more buying.
Moving averages are critical support to watch on the downside. If the 50-SMA support collapses, a few short-term traders can take profits, which could take the pair to $2.25 and then $2.
AXS/USDT
Axie Infinity (AXS) has been in a strong downtrend, but is showing early signs of a potential trend reversal. Buyers pushed the price above the downtrend line on December 5, but failed to sustain higher levels as shown by the long wick on the day’s candlestick.
A small positive is that the bulls did not allow the price to fall below the moving averages. This indicates that buyers are trying to turn the moving averages into support.
The moving averages are on the verge of a bullish crossover and the RSI is in positive territory, indicating that momentum may be shifting in favor of the bulls. If the price breaks above the descending line and continues, a rally to $11.85 is likely. This level is expected to act as a major obstacle to the upside.
If the price falls below the moving averages, the bullish view may be invalidated in the near term. The AXS/USDT pair may then drop to $6.57.
The four-hour chart shows that bears are strongly defending the downtrend line and bulls are buying dips to the 50-SMA. The 20-EMA has flattened and the RSI is near 47, indicating a balance between supply and demand.
A break and close above $8.70 could shift the advantage in favor of the bulls. The pair could then rise to $9.28 and then $10. Alternatively, a break below $7.86 could indicate that the bears are back in the driver’s seat. The pair could then fall as low as $6.87.
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