The U.S. stock market continues to hit new all-time highs while gold, which acts as a safe haven asset has retreated from it's all-time highs. This suggests that there sentiment is to own risky assets. Meanwhile, Bitcoin (BTC), which at times behaves as an uncorrelated asset, remains stuck in a range.
However, with the U.S. presidential elections approaching, the volatility in all the markets is likely to pick up.
If President Donald Trump is re-elected, then there is unlikely to be a huge change in the current economic policies. If Joe Biden wins the election, then economists, traders and corporations are likely to remain cautious for a few weeks and this could lead to a correction as markets hate uncertainty. Therefore, traders should get ready for a roller-coaster ride for the next few months.
Daily cryptocurrency market performance. Source: Coin360
According to PlanB, the creator of the popular stock-to-flow model, Bitcoin’s price action after its halving in May has been closely following the model. If Bitcoin continues to follow the model, then the price is likely to skyrocket within a few months and embark on a long-term bull market, with a target objective of $288,000.
While the long-term picture might look bullish, what do the charts project for the short-term?
Let’s study them to find out!
Bitcoin has once again turned down from the $12,113.50 overhead resistance, which suggests that the bears are aggressively defending this level.
BTC/USD daily chart. Source: TradingView
Currently, the 20-day exponential moving average ($11,558) has flattened out and the relative strength index is just below the midpoint, which suggests a balance between the bulls and the bears.
However, if the bears sink and sustain the price below the $11,000 support, it will complete a bearish head and shoulders pattern, which has a pattern target of $9,540.
It is unlikely to be a straight fall to the target because the bulls will attempt to defend the $10,400–$10,000 zone aggressively.
Conversely, if the price rebounds off the $11,000 levels, the BTC/USD pair is likely to remain range-bound for a few days. The trend will shift in favor of the bulls if they can scale the price above the $12,113.50–$12,460 resistance zone.
The next few days are critical because the breakout or breakdown from the $11,000–$12,113.50 range could start the next directional move.
Ether (ETH) surged above the overhead resistance of $446.479 on Sep. 1 and hit its first target objective of $480. This attracted a huge bout of profit booking from traders that resulted in a sharp intraday fall to $416.248 today.
ETH/USD daily chart. Source: TradingView
The bulls are currently attempting to defend the 20-day EMA ($408), which is a positive sign as it shows that the positive sentiment remains intact.
Both moving averages are sloping up and the RSI is still in the positive zone, which suggests that the bulls have the upper hand. However, they will have to push the price above the $480 resistance for the uptrend to resume.
If the bears sink the ETH/USD pair below $415.634, a drop to $366 is possible. A break below this support will tilt the advantage in favor of the bears.
XRP rallied just above the $0.295813 level on Sep. 1 and the bulls tried to resume the up-move today but they encountered huge selling pressure at $0.303746 and this pulled the the price to $0.262484.
XRP/USD daily chart. Source: TradingView
The positive sign is that the bulls purchased the dip to the 50-day simple moving average ($0.263) again today, which makes this a critical level to watch out for. If the bears sink the price below this support, the possibility of a deeper fall to $0.235688 increases.
Conversely, if the bulls defend the 50-day SMA, the XRP/USD pair could remain range-bound between $0.26–$0.30 for a few days. On a close (UTC time) above $0.30, a move to $0.326113 is possible.
The flat 20-day EMA ($0.280) and the RSI just below the 50 level suggests a balance between supply and demand, with a minor advantage to the bears.
Chainlink (LINK) attempted to bounce off the 20-day EMA ($14.99) on Sep. 01 but a sharp reversal today resulted in a decline to $14.
LINK/USD daily chart. Source: TradingView
The 20-day EMA has flattened out and the RSI has dipped close to the midpoint, which suggests that the LINK/USD pair could remain range-bound between $12.89 and $17.7777 for the next few days.
If the bears sink the price below $12.89, it will be a huge negative as that will form a lower high and a lower low pattern, which will suggest that the uptrend has ended.
Conversely, if the bulls manage to push the pair above $17.7777, a retest of the highs at $20.1111 is possible.
Bitcoin Cash (BCH) broke above the 20-day EMA ($280) on Sep. 1 but that victory for the bulls was short-lived as the altcoin reversed sharply today, which suggests that bears are selling aggressively at higher levels.
BCH/USD daily chart. Source: TradingView
The BCH/USD pair has bounced off $245.63 today, which is just above the intraday low of $245 made on Aug. 2. This is an important support to watch out for because if it cracks, a drop to $217.55 is possible.
The moving averages are on the verge of a bearish crossover and the RSI has again dropped into the negative territory, which suggests that bears have the upper hand. This bearish view will be invalidated if the pair rises and sustains above the $280 resistance.
Litecoin (LTC) stayed above the 20-day EMA ($59.31) for the past two days but the bulls could not push the price above the $64 resistance, which suggests that the bears are aggressively defending this level.
LTC/USD daily chart. Source: TradingView
The LTC/USD pair has formed a possible head and shoulders pattern, which will complete on a breakdown and close (UTC time) below the neckline. This setup has a target objective of $39.
However, if the pair rebounds off the 50-day SMA ($55.36) or the neckline, the bulls will again attempt to push the price above $64. If they succeed, a rally to $68.90 is possible.
Binance Coin (BNB) broke out of the $24.4588 overhead resistance on Sep. 1, which suggested a resumption of the up-move.
BNB/USD daily chart. Source: TradingView
However, the BNB/USD pair reversed direction sharply from $25.8262 today. The only positive thing is that the bears could not sink the price below the 20-day EMA ($22.85), which suggests strong buying on dips.
The 20-day EMA is sloping up and the RSI is in the positive territory, which suggests that the advantage is with the bulls.
If the pair rises above $24.4588 once again, it is likely to rally to $27.1905 and if this level is scaled, a move to $32 is possible. The bullish view will be invalidated if the pair breaks below $20.5710.
Crypto.com Coin (CRO) has broken below the breakout level of $0.176596, which suggests profit booking at higher levels. If the bears sink the price below the 20-day EMA ($0.171), a drop to the 50-day SMA ($0.162) is likely.
CRO/USD daily chart. Source: TradingView
However, the 20-day EMA is gradually sloping up and the RSI is just above the midpoint, which suggests a minor advantage to the bulls.
If the CRO/USD pair rebounds off the 20-day EMA, the bulls will once again try to push the price above the $0.176596–$0.183416 resistance zone. If they succeed, a retest of $0.191101 is likely.
Bitcoin SV (BSV) broke above the $200 overhead resistance on Sep. 1 but that proved to be a bull trap as the price turned down sharply today and fell to an intraday low of $173.53.
BSV/USD daily chart. Source: TradingView
The next support on the downside is $160 and if that also cracks, a retest of $146.20 will be on the cards. The downsloping 20-day EMA ($198) and the RSI in the negative zone suggest advantage to the bears.
This bearish view will be invalidated if the BSV/USD pair turns around from the current levels and breaks out of the downtrend line. Such a move will suggest that bulls are back in the game.
The rebound off the $0.10 critical support in Cardano (ADA) hit a barrier just below the previous support turned resistance of $0.13, which suggests that the bears are selling on rallies to critical resistance levels.
ADA/USD daily chart. Source: TradingView
The 20-day EMA ($0.122) is sloping down and the RSI is in the negative territory, which suggests that bears have the upper hand.
If the bears sink the ADA/USD pair below the $0.10 support, it will be a huge negative as it will suggest the possible start of a new downtrend. The next support on the downside is way lower at $0.08.
However, if the bulls defend the $0.10 support, the pair could remain range-bound for a few days. The trend will shift in favor of the bulls on a close (UTC time) above $0.13.
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 when making a decision.
Market data is provided by HitBTC exchange.