Cryptocurrency markets and United States equity markets witnessed profit-booking this week as macroeconomic data hinted at continued rate hikes by the Federal Reserve. Bitcoin (BTC) is down more than 4% and the S&P 500 fell 2.7% to record its worst week of the year.
The CME FedWatch Tool shows a 73% probability of a 25 basis point rate hike by the Fed at the March meeting, but after higher than expected inflation readings in two weeks, the probability of a 50 basis point rate hike basis points has slowly started to gain momentum.
During periods of uncertainty, some currencies enter a deeper correction, while some buck the trend and continue to outperform markets. Therefore, it becomes important to select the correct currencies to trade.
Selected on this list are a few coins that have witnessed a shallow correction or bounced off support sharply. Let’s look at your charts and determine the levels to watch out for.
USDT/BTC
Bitcoin fell below the 20-day exponential moving average ($23,391) on Feb. 24, but the bears were unable to seize this advantage and hold the price below the strong support at $22,800.
The price bounced off $22,800 on Feb 25, and the bulls are trying to push the price above the 20-day EMA. If they manage to do that, it will indicate that the BTC/USDT pair may consolidate between $25,250 and $22,800 for a few days.
The flattening out of the 20 day EMA and the RSI near the midpoint also suggest range bound action in the short term.
Alternatively, if the price falls below $22,700, the selling could intensify and the pair could plummet to the next strong support at $21,480.
The 20-EMA has turned down on the 4-hour chart and the RSI is in the negative territory. This indicates an advantage for bears. The sellers will try to protect the 20 day EMA and if the price turns down from this level, the probability of a break below $22,800 increases. If that happens, the selling may intensify and the pair may slide to $21,480.
Conversely, if the price breaks above the 20 day EMA, it will suggest that the bulls are buying dips. That could take the pair to the 50 simple moving average and keep price range bound for longer.
LDO/USDT
Lido DAO (LDO) did not hold below the 20-day EMA ($2.75) during the recent correction, which is a positive sign. Another bullish sign is the formation of the pennant near the local highs.
The bulls will try to push the price above the resistance line of the pennant. If they succeed, the LDO/USDT pair could start the next leg of the up move. The pair may first rally to $3.90 and then attempt a rally to $4.24.
Conversely, if the price turns down from the resistance line, it will suggest that the bears are selling rallies. That could keep the price within the pennant for a while longer. The bears will have to sink the price below the pennant if they want to signal a short-term trend change.
The sharp bounce off the pennant support line indicates aggressive buying on dips. Buyers will have to clear the hurdle at the resistance line to regain control. If they do, the pair may resume its uptrend.
However, the bears likely have other plans as they will try to protect the resistance line. If the price falls below this level, the steady state can continue for a longer time.
A break below the pennant could attract short-term traders to book profits. That can bring the price to $2.20 and then to $2.
USDT/EGLD
MultiversX (EGLD) turned down from the resistance line, but an encouraging sign is that the bulls are trying to defend the 20-day EMA ($47).
Both moving averages are sloping up and the RSI is above 54, indicating that the buyers have a slight edge. The bulls will try to push the price towards the resistance line, where again they are likely to face strong opposition from the bears.
This bullish view could be invalidated in the short term if the price turns down and breaks below the 20 day EMA. That will indicate selling from the bears on every minor rally. The EGLD/USDT pair could then drop to the 50-day SMA ($44) and then to $40.
The 4 hour chart shows that the price is falling within a descending channel pattern. The buyers bought at lower levels and pushed the price to the resistance line of the channel. If this resistance gives way, the pair could rally to the 50-SMA and then attempt a retest of the strong barrier at $54.
Conversely, if the price turns down from the resistance line, it will suggest that the bears have not given up. That could result in a drop towards the support line of the channel.
Related: How does the US Dollar Index (DXY) affect cryptocurrencies? See macro markets
THETA/USDT
The bulls are trying to stop the pullback of Theta Network (THETA) at the 20-day EMA ($1.15). Both the moving averages are sloping up and the RSI is in the positive territory, indicating an advantage for the bulls.
If the buyers push the price above the downtrend line, the THETA/USDT pair could rally to the overhead resistance at $1.34. This is formidable resistance, and a break above it could open the doors for a possible rally to $1.70.
Instead, if the price turns down and breaks below the 20 day EMA, it will suggest that the short-term bulls may be racing to the exit. That may initiate a deeper correction to the 50-day SMA ($1.05) and then psychological support at $1.
The 4-hour chart shows the formation of a symmetrical triangle pattern. Both moving averages have flattened out and the RSI is hovering near the center, indicating a balance between supply and demand.
A break below the triangle could tip the short-term advantage in favor of the bears. The pair could drop to $1.12 first and then to $1.
If the bulls want to avoid the dip, they will have to quickly push the price above the triangle. That could start a trip to $1.27 and then to $1.30.
KLAY/USDT
Klaytn (KLAY) is attempting to break out of a base pattern. The price rallied from the 20-day EMA ($0.26) on February 25, indicating solid buying on dips.
The bulls will try to break through the overhead resistance at $0.34. If they do that, the KLAY/USDT pair could pick up momentum and shoot up to the psychological resistance at $0.50. Such a move will indicate a possible change in trend.
If the price turns below $0.34, it will indicate that the bears are fiercely protecting the level. That could send the price back down to the 20 day EMA. A break below this level could indicate that the pair may spend more time in the base pattern.
The bulls stopped the pullback near the 61.8% Fibonacci retracement of $0.26 and started a rally. There is minor resistance at $0.32 but if this level is crossed, the pair could attempt a rally to $0.34 and then $0.37.
On the other hand, if the price turns down from the overhead resistance, it will suggest that the bears are selling rallies. That may improve the prospects for a break below $0.26. If that happens, the pair can slide to $0.22.
The views, thoughts and opinions expressed here are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
