The Federal Reserve’s decision to hold off on hiking interest rates in its September meeting has had a mixed impact on the equity and cryptocurrency markets. While risk assets typically underperform in a high-interest-rate environment, Bitcoin has remained relatively stable, while altcoins have struggled to hold on to their gains due to a risk-off sentiment.
Despite the lack of a rate hike, Fed Chair Jerome Powell warned that the process of bringing inflation down to 2% will take time, indicating that rates could remain higher for longer. This possibility may have contributed to the sell-off in the US equities markets and the cryptocurrency space.
The S&P 500 is down over 2% this week, while the Nasdaq has dropped about 3%. In contrast, Bitcoin has remained flat, suggesting that investors may be seeking the stability and store of value that the cryptocurrency offers during uncertain times.
Altcoins, on the other hand, have struggled to maintain their gains, with many unable to hold on to crucial support levels. This indicates a lack of confidence and a risk-off sentiment among investors, who may be looking to move their investments into safer assets.
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The price action over the next few days will be critical in determining whether the bears or the bulls will gain control. If the bears seize the initiative, Bitcoin and the major altcoins could be dragged lower. However, if buyers regroup and push prices higher, a rally could be in the cards.
Let’s take a closer look at the charts of the top 10 cryptocurrencies to see how they are performing and what potential price movements may be in store.
Bitcoin (BTC) has been trading within a tight range between the moving averages, indicating indecision among traders. The price is currently above the 20-day exponential moving average ($26,520), and if it rises further, the bulls will attempt to overcome the barrier at the 50-day simple moving average ($27,050). A successful break above this level could lead to a surge towards the next resistance at $28,143. However, if the price falls below the 20-day EMA, it would suggest that the bears are back in control, increasing the likelihood of a retest of the pivotal support at $24,800.
Ether (ETH) turned down from the 20-day EMA ($1,628), indicating continued selling pressure. The bears will look to push the price below the crucial support at $1,530, which could initiate a downward move towards the next major support at $1,368. On the other hand, if the price rebounds from the current level or rises off $1,530, it would suggest strong buying interest at lower levels. A break and close above $1,670 would confirm this strength and pave the way for a potential rally to $1,745.
Binance Coin (BNB) saw a decline after reaching $220 and breaking below the 20-day EMA ($214). The price is now consolidating between $203 and $220. If the bears sustain the price below the 20-day EMA, they could attempt to push it below the crucial support at $203, signaling a resumption of the downtrend. On the other hand, the bulls will need to clear the hurdle at the 50-day SMA ($222) to indicate a comeback. If they succeed, the pair could rally to $235 and then attempt a move towards $250.
XRP rose above the 20-day EMA ($0.51) on September 19 but has struggled to sustain the recovery. The price has dropped back to the 20-day EMA, which is an important support level. If the price turns up from this level, it would suggest a change in sentiment from selling on rallies to buying on dips. The bulls would then attempt to push the price above the overhead zone between the 50-day SMA ($0.53) and $0.56. However, if the 20-day EMA breaks, the pair could fall to the uptrend line, which is an important level for the bulls to defend.
Cardano (ADA) has formed a descending triangle pattern, which will complete on a break and close below $0.24. The gradually downsloping moving averages suggest an advantage for the bears. However, the bullish divergence on the relative strength index (RSI) indicates that the bearish momentum may be slowing down. For the bulls to regain control, they will need to push the price above the downtrend line and prevent a breakdown. If they succeed, the pair could see a relief rally to $0.30. On the other hand, a break below $0.24 would complete the bearish pattern and set the stage for a further decline.
Dogecoin (DOGE) turned down from the 20-day EMA ($0.06), indicating aggressive selling pressure from the bears. However, the bulls have managed to defend the support at $0.06, suggesting buying interest. The price may continue to swing between $0.06 and the 20-day EMA for the time being. If the bulls push the price above the 20-day EMA, it would indicate a sustained recovery towards the 50-day SMA ($0.07) and then $0.08. On the downside, a break below $0.06 could lead to a decline to $0.055.
Solana (SOL) rose above the 20-day EMA ($19.57) but failed to reach the 50-day SMA ($21.01), indicating selling pressure at higher levels. The 20-day EMA is currently a battleground between the bulls and the bears. If the sellers sustain the price below the 20-day EMA, the pair could drop to $18.50 and then $17.33. On the other hand, if the price sustains above the 20-day EMA, it would suggest that the bulls have gained control and could lead to a retest of the overhead resistance zone between the 50-day SMA and $22.30.
Toncoin (TON) failed to rise above $2.59, tempting short-term traders to book profits. The immediate support on the downside is at $2.25, and if this level is breached, the pair could drop to the 20-day EMA ($2.08). To maintain a positive sentiment, the bulls must defend this level. A strong rebound from the 20-day EMA could keep the pair within the range between $2.07 and $2.59. On the other hand, if the price snaps back from $2.25, it would suggest that traders are not waiting for a deeper correction to buy, increasing the likelihood of a break above $2.59 and a potential rally to $2.90.
Polkadot (DOT) continues to face resistance at the breakdown level of $4.22, indicating that every minor rally is being sold into. The downsloping moving averages and negative RSI suggest that the bears have the upper hand. If the price falls below $3.90, it would suggest the start of the next leg of the downtrend towards $3.58. On the other hand, a positive divergence forming on the RSI indicates that selling pressure may be reducing. A break above $4.22 would signal a possible rally to the downtrend line.
Polygon (MATIC) closed above the 20-day EMA ($0.54) but failed to maintain momentum. The price has now dropped back below the 20-day EMA, and the bears will attempt to push it below the strong support at $0.49. If they succeed, the pair could resume its downtrend, with the next support at $0.45. On the other hand, if the price bounces off the $0.50 support, it would suggest buying interest at lower levels.
In conclusion, the lack of a rate hike by the Federal Reserve has had mixed effects on the equity and cryptocurrency markets. While Bitcoin has remained relatively stable, altcoins have struggled to hold on to their gains. The price action over the next few days will be critical in determining whether the bears or the bulls will gain control, and traders will be closely watching the support and resistance levels mentioned above.
