Bitcoin (BTC) attempted to break out of its range last week but failed to sustain the higher levels. It is now trading near the $26,000 level and uncertainty about the next directional move is evident, with two successive Doji candlestick patterns forming on the weekly chart.
It is difficult to predict the direction of the breakout, but the downside may be limited in the near term due to expectations that the United States Securities and Exchange Commission (SEC) may eventually approve one or more pending applications for a spot Bitcoin exchange-traded fund (ETF). Former SEC chair Jay Clayton recently stated that an approval is inevitable.
In the short term, there is no specific catalyst that could shake Bitcoin out of its range, leading to pressure on most major altcoins. However, a few altcoins are showing signs of strength in the short term. Let’s analyze the charts of the top five cryptocurrencies that may start a rally if they break above their respective overhead resistance levels.
Bitcoin Analysis:
Bitcoin is back inside the $24,800 to $26,833 range, but the bulls continue to buy the dips. The downsloping moving averages indicate an advantage to bears, but the gradually recovering relative strength index (RSI) suggests that bearish momentum may be weakening. A break and close above the range at $26,833 could lead to a retest of the Aug. 29 intraday high of $28,142. On the other hand, if bears sink the price below $24,800, it could drop to $20,000.
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Toncoin Analysis:
Toncoin (TON) is in an uptrend but is facing resistance near the overhead resistance at $2.07. The moving averages have turned up, indicating an advantage to buyers, but the overbought levels on the RSI suggest that a minor correction or consolidation is possible. A rally above $2.07 could push the price to $2.40, while a deeper correction may pull it to the 20-day exponential moving average (EMA) at $1.61.
Chainlink Analysis:
Chainlink (LINK) has been trading inside a large range between $5.50 and $9.50 for the past few months. The recent dip near the support of the range was bought by the bulls. If the price turns up and closes above the downtrend line, the positive momentum may pick up and the price could rally to $1,370. On the other hand, if the price sustains below the 20-day EMA, it will suggest that bears have the upper hand.
Maker Analysis:
Maker (MKR) has taken support near $1,000, but the bulls are facing resistance near the downtrend line. If the price turns up and closes above the line, it could suggest that buyers are back in the game and the pair may rally to $1,370. However, if the price sustains below the 20-day EMA, bears may have the advantage and the price could slump to $980.
Tezos Analysis:
Tezos (XTZ) has seen a battle between bulls and bears near the strong support at $0.70. The failure of bears to sustain the price below this level indicates buying at lower levels. A close above the 20-day EMA will be the first sign of strength, potentially leading to a rally to $0.94 and $1.04. However, if the price sustains below $0.66, this positive view will be invalidated.
In conclusion, the direction of the breakout for Bitcoin remains uncertain, but expectations of a spot Bitcoin ETF approval by the SEC may limit downside potential. Meanwhile, some altcoins are showing signs of strength and could rally if they break above their respective resistance levels. Traders should closely monitor these key levels and watch for any further developments in the cryptocurrency market.
