The United States equities markets have made a bullish start to the new week. The S&P 500 is up about 2.60% and the Nasdaq Composite has rallied more than 3%. This indicates that the markets have shrugged off September's high inflation reading and shifted focus onto the third-quarter earnings.
The stock market’s recovery could pave the way for Bitcoin (BTC) to break out of the range it has been stuck in for the past several days. A positive sign for the bulls is that the amount of Bitcoin held in cold storage or lost has risen to a five-year high, according to Glassnode data.
While long-term investors do not seem to be in the mood to sell their holdings at lower levels, smaller investors appear to be making the most of the depressed prices. Glassnode data shows that the number of wallets holding one whole Bitcoin or more has risen sharply in 2022.
What are the levels to watch on the upside that could signal the start of a sustained recovery in Bitcoin and altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin broke above the 20-day exponential moving average ($19,410) on Oct. 17, and the bulls are trying to extend the recovery above the zone between the 50-day simple moving average ($19,691) and the downtrend line.
If they succeed, the BTC/USDT pair could rise to the stiff resistance at $20,500. This level has acted as a strong barrier since Sept. 14. Therefore, a break and close above $20,500 could indicate that the selling pressure could be reducing. The pair could then sprint to $22,800, as there is no major resistance in between.
This positive view could be invalidated in the near term if the price turns down from the downtrend line and plummets below $18,843. Such a move will indicate that bears continue to sell at higher levels. The pair could then drop to the strong support zone between $18,125 and $17,622.
Ether’s (ETH) recovery has reached the breakdown level from the triangle. The 20-day exponential moving average ($1,323) is located close to this level. Hence, the bears are expected to defend the level aggressively.
If the price turns down from the current level and breaks below $1,263, the ETH/USDT pair could retest the Oct. 13 intraday low at $1,190. A break below this level could pull the pair to the support line of the descending channel.
On the contrary, if buyers drive the price above the overhead resistance at the 20-day EMA, the pair could rise to the downtrend line of the channel. This is an important obstacle for the bulls to overcome if they want to signal a potential trend change.
BNB (BNB) has been consolidating between $258 and $300 for the past several days. The bulls are trying to push the price above the moving averages on Oct. 17.
If they can pull it off, the BNB/USDT pair could attempt a rally to the resistance of the range at $300. The bears are likely to defend this level with all their might. A strong rejection at this level will indicate that the pair may remain stuck inside the range for a while.
The bears will have to sink the price below $258 to gain the upper hand. If they do that, the pair could decline to the next support at $216. Contrarily, if buyers propel the price above $300, the pair could rise to $338.
The price action of the past few days has formed a large symmetrical triangle for XRP (XRP). Buyers tried to push the price toward the resistance line of the triangle on Oct. 14, but the long wick on the candlestick shows aggressive selling at higher levels.
If the price sustains below the 20-day EMA ($0.47), the XRP/USDT pair could slide to the support line of the triangle. This level could attract buyers, and a strong rebound off it will suggest that the pair may continue to trade inside the triangle. On the other hand, a break below the support line could sink the pair to $0.41.
Trading inside a triangle is usually random and volatile. Although a triangle usually acts as a continuation pattern, it is better to wait for the price to break above the triangle before placing large bets.
Cardano (ADA) has formed a falling wedge pattern. The price bounced off the support line of the wedge on Oct. 13, and the bulls are attempting to push the price to the 20-day EMA ($0.40).
In a downtrend, the bears try to vigorously defend the 20-day EMA. If the price turns down from this resistance, the ADA/USDT pair could again drop to the support line. The downsloping moving averages and the relative strength index (RSI) in the oversold territory indicate that bears are in control.
To gain the upper hand in the near term, the buyers will have to push the price above the 20-day EMA. The pair could thereafter reach the downtrend line. This level could act as a strong resistance, but if bulls push the price above it, the pair could soar to $0.52.
Solana (SOL) dipped and closed below the $30 support on Oct. 15, but the bears could not capitalize on this weakness. This suggests that selling dries up at lower levels.
Buyers pushed the price back above the breakdown level of $30 on Oct. 16 and are attempting to extend the recovery to the downtrend line. The bears are likely to mount a strong defense at this level.
If the price turns down from the downtrend line, the SOL/USDT pair could drop to $29.42. A break below this level could pull the pair to $27.87. On the upside, if buyers thrust the price above the downtrend line, the pair could rally to $35.50.
Dogecoin’s (DOGE) recovery is nearing the moving averages. This is an important level for the bears to defend because a break above the 50-day SMA ($0.06) could clear the path for a potential rally to $0.07.
If the price turns down from $0.07, the DOGE/USDT pair could again drop to the support near $0.06. That could keep the pair stuck between these two levels for a few more days. The flattening 20-day EMA ($0.06) and the RSI just below the midpoint suggest a consolidation in the near term.
If bulls pierce the overhead resistance at $0.07, the pair could attempt a rally to $0.09. Such a move will bring the large $0.05 to $0.09 range into play. Another possibility is that the price turns down sharply from the moving averages. If that happens, the bears will make one more attempt to pull the pair to the support at $0.05.
Related: Post-midterm elections dump? Bitcoin will see $12K if this 2018 BTC chart fractal is correct
The failure of the bears to sustain Polkadot (DOT) below $6 on Oct. 13 started a recovery that has reached the 20-day EMA ($6.29) on Oct. 17. This level is likely to witness a tough battle between the bulls and the bears.
If bulls come out on top, the DOT/USDT pair could pick up momentum and rally toward the overhead resistance at the 50-day simple moving average ($6.69). This level could again attract strong selling by the bears. If the price turns down from this resistance, the pair could extend its stay inside the $6-to-$6.64 range for some more time.
The next trending move is likely to begin after the bulls push the price above the 50-day SMA or bears sink the pair below $6. If the price slips below $6, the decline could extend to $5.36.
After several unsuccessful attempts in the past few days, the bulls have finally managed to push Polygon (MATIC) above the downtrend line on Oct. 17. This is the first sign of a potential trend change.
The MATIC/USDT pair could first rise to $0.86 and, if this level is crossed, the relief rally could reach $0.94. Although the flattish moving averages suggest a balance between supply and demand, the RSI in the positive territory suggests that the momentum could be turning in favor of the bulls.
Contrary to this assumption, if buyers fail to sustain the price above the downtrend line, it will suggest that bears are active at higher levels. The sellers will have to sink the price below $0.75 to gain the upper hand in the near term.
Shiba Inu (SHIB) is attempting to bounce off the support at $0.000010, but the recovery lacks strength. This suggests that traders are in no hurry to buy at the current levels.
Both moving averages are sloping down and the RSI is in the negative territory, indicating advantage to sellers. If the price turns down from the current level or the moving averages, the bears will again try to sink the SHIB/USDT pair below $0.000010. If they manage to do that, the selling could intensify and the pair may drop toward the vital support at $0.000007.
Alternatively, if buyers drive the price above the moving averages, the pair could rise to the overhead resistance at $0.000014. A break above this level could suggest that the bulls are on a comeback. The pair could then rise to $0.000018.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.