Bitcoin (BTC) is likely to stabilize for a few days, but select altcoins are likely to accelerate their up-movement during this period.
Brad Garlinghouse, CEO of Ripple Labs, assumes the U.S. The recent decision by the Federal Reserve to allow inflation to remain above its 2 % target could further debase the dollar. According to Garlinghouse, this move is likely to contribute “to more diversification of assets that would definitely be good for crypto.”
The numerous stimulus and fiscal initiatives announced worldwide to tackle the coronavirus pandemic that has led to the economic recession are bullish for BTC. However, the big bull market cycles of BTC show that each successive cycle has been longer than the previous one.
Thus, if history were to repeat itself, BTC would be able to stabilize for another 3-12 months before making a decisive move.
During this time, when Bitcoin remains within range, several other altcoins are likely to rally in rotation.
The market activity has been in the DeFi tokens for the past few months, which have been in the bull run of their own.
So, while BTC is consolidating, let’s look at some of the altcoins that might provide an opportunity in the short term.
The mean directional index (ADX), a part of the directional movement indicator, has fallen below 24. The 20-day exponential moving average ($11,534) has flattened, indicating that Bitcoin’s trend has weakened considerably.
Actually, the price is essentially trapped between the $12,000 and $11,000 ranges, putting the positive directional indicator (+ DI) and the negative directional indicator (-DI) closer together.
After the bears failed to lower the $11,000 support price on Aug. 25 and 27, the bulls are now trying to drive the market beyond the $12,000–$12,460 resistance level. If they succeed, the next leg of the up-movement is likely to begin.
However, if the price drops from the overhead resistance zone, the BTC / USD pair is likely to spend some more time inside the range.
The-DI and the + DI are closer to each other, and the ADX is below 18, which implies a balance between supply and demand.
However, the small positive point is that the buyers are vigorously defending the $11,000 – $11,200 support zone. They’re going to try to drive the pair to $12,000.
Unless the pair picks up momentum, the likelihood of a short-term break-up is small, so the range-bound action is likely to be extended for a few more days.
ATOM / USD:
The bears vigorously defended the $8.50 amount of Cosmos (ATOM), which attracted short-term traders to book income, which took the price down to $7.249.
If the ATOM / USD pair recovers from the breakout stage, it is likely to serve as a strong floor during further declines.
The ADX remains high above 35, and the + DI is above the-DI, which means that the bulls have the upper hand. At a break above $8, a retest of recent highs at $8,877 is possible.
If the bulls can drive the price above this amount, the uptrend could restart at $10,471 with the next goal.
Contrarily to this theory, if the pair turns down from $8, the bears will again attempt to sink and keep the market below $7,249. A decrease to the 20-day EMA ($6.69) is likely if they succeed.
Although the bears pulled the pair below $7.249, they could not sustain the price below it, which shows that the bulls are buying at lower levels.
If the bulls can push the price above the $7.844 resistance, a retest of $8.877 is possible. Above this level, the uptrend is likely to resume.
This bullish view will be invalidated if the pair turns down and sustains below $7.249. Such a move will suggest that the correction could deepen to $6.604 and then to $5.50.
The ADX is trading above 55, and the +DI is above the -DI, which suggests that Aave (LEND) is in a strong uptrend, with the bulls firmly in command.
The LEND / USD pair is currently pulling back after hitting a high of $0.89985 on August 26. However, the good thing is that the bulls have not allowed the price to fall below $0.70426, which is the 50 percent Fibonacci retracement of the most recent leg of the rally.
History indicates that the pair have not spent a long time in consolidation since July (marked by ellipses on the chart). As a result, the bulls are likely to try again to restart the uptrend by raising the market above $0.89985.
If they succeed, a $1 rally and a $1,10918 rally is likely to be over. However, if the price is lower than $0,89,985, the pair might enter a consolidation.
The 4-hour chart shows that ADX has fallen below 23, and the 20-EMA is flattened, indicating a balance between supply and demand. The pair formed a symmetrical triangle, usually serving as a pattern of continuity.
If the bulls can drive the price above the triangle, a retest of $0,89,985 is possible. The break-up of this resistance is likely to restart the uptrend.
Contrarily to this theory, if bears lower the price below the triangle, a drop to $0.65 is likely. If this help breaks as well, it will mean that the pair is over $0.89985. In the short term.
NEM (XEM) broke off a $0.1295715 overhead support on Aug. 29, which is a major bullish warning. However, the last few days’ sharp upward shifts have led to short-term traders booking profits today.
Bulls are likely to defend the $0.1215678–$0.1129611 support range, which is the 50 percent and 61.8 percent Fibonacci retracement of the most recent leg of the rally. If the XEM / USD pair rebounds from this region, the bulls will attempt to restart the uptrend again.
The ADX is high above 63, and the + DI is just above the-DI, indicating that the bulls have the upper hand. If the price above $0.158037 can be scaled, the up-move can be expanded to $0.18 and then $0.20.
Conversely, if bears drop below $0.1129611, a drop to the 20-day EMA ($0.091) is likely. A bounce off this level would be a good sign as it indicates that the bulls are buying dips for this help.
The bullish view would be invalidated if bears sink and hold the price below the 20-day EMA. Such a move would suggest that the latest breakout was a fake one.
The ADX on the 4-hour chart is above 48, and the + DI is above the-DI, which means that the advantage is with the bulls.
Currently, benefit booking has taken the price down to the $0.1295715 breakout mark. If the pair bounces from this level, it will be a big positive one, as it will suggest that the bulls have secured the breakout level, which will increase the likelihood that the uptrend will restart.
However, if this stage breaks, the next help will be the 20-EMA. If the pair bounces off this help, the bulls will try to restart the uptrend again.
YFI / USD
Yearn.finance YFI was on a spectacular streak. It rose from a low of $3,000 on August 13 to a high of $38,855.31 today, which is a 1.195 trillion rise within a short timeframe. Usually, such vertical rallying is not feasible.
Today, the YFI / USD pair witnessed a profit booking close to 200 percent of Fibonacci’s $38,451.95 expansion and a return to intraday earnings.
If the price closes near the lows of the day, a bearish shooting star candlestick pattern will develop. Typically, if a big bearish candlestick accompanies this pattern on the next day, it may mean that a short-term top is in place.
But the bulls are unlikely to give up without a contest. They will try to provide help between $26,436.24 and $23,505.34, 50 percent and 61.8 percent of Fibonacci’s most recent leg of the rally.
If the price bounces off this level, the bulls will again try to drive the market above $38,855.31 and restart the uptrend. If they succeed, the next goal will be a 261.8 percent Fibonacci extension of $46,899.39.
The ADX is above 54, and the +DI is above the -DI, which suggests that the trend remains strong and in favor of the bulls.
Currently, the pair is attempting to rebound off the 50% Fibonacci retracement level of $26,436.24. If the bulls can push the price above $32,500, a retest of $38,955.31 is likely.
On the other hand, if the bears sink the price below $26,436.24, a drop to the 20-EMA is possible. A break below this support could sink the price to $19,332.53 and below that to $14,017.17.