The United States 10-year Treasury yields surpassed 4.8% on October 3rd, reaching their highest level since 2007. This increase in yields has caught the attention of investors and analysts, with some warning of potential economic risks. DoubleLine Capital CEO Jeffrey Gundlach pointed out that the spread between the 2-year and 10-year Treasury yields has significantly narrowed from 109 basis points a few months ago to just 35 basis points, which is considered a recession warning sign. Meanwhile, Arthur Hayes, former CEO of crypto exchange BitMEX, warned that the government may need to print money to save the bond market as a faster bear steepener could cause firms to collapse. This growing economic uncertainty has led some investors to believe that it could trigger a cryptocurrency bull market.
Interestingly, institutional investors seem to be warming up to cryptocurrencies amid this uncertain macro environment. CoinShares’ latest Digital Asset Fund Flows Weekly Report revealed inflows of $21 million into digital asset investment products for the first time in six weeks. With these developments in mind, let’s take a closer look at the charts to determine the potential next moves for some popular cryptocurrencies.
Bitcoin (BTC) recently rose above $28,143, however, the long wick on the candlestick suggests that bears are aggressively selling at higher levels. Despite this, the upsloping 20-day exponential moving average ($26,903) and the positive-relative strength index (RSI) indicate that bulls are currently in control. Bullish buyers will likely attempt to break the overhead resistance at $28,143. If successful, this could complete a short-term double bottom pattern with a target objective of $31,486. However, a failure to break this resistance level could lead to a price drop to $26,000, potentially causing the BTC/USDT pair to consolidate between $24,800 and $28,143 for an extended period.
Ether (ETH) suffered a sharp downturn from its overhead resistance level of $1,746, indicating strong bearish resistance at this level. The 20-day exponential moving average ($1,640) is now flattening out, and the RSI is near the midpoint, suggesting a balance between supply and demand. If the price rebounds from the current level, bulls will likely attempt to overcome the obstacle at $1,746, potentially triggering a double bottom pattern with a target objective of $1,961. On the flip side, a continued decline and a break below the moving averages may result in the ETH/USDT pair remaining within a range of $1,531 and $1,746 for some time.
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Binance Coin (BNB) experienced a rise above the $220 resistance level, but the subsequent failure of bulls to maintain the price above the 20-day exponential moving average ($214) suggests a negative sign. Currently, traders appear to be rushing to the exit, potentially leading the BNB/USDT pair to fall to the uptrend line. However, if the price rebounds from this level, bulls may attempt to push the pair above $220, with a successful close above this resistance signaling the start of an upward movement towards $235 and potentially $250. Conversely, if the price breaks below the uptrend line, the pair may decline to the strong support level at $203.
XRP managed to break above the symmetrical triangle pattern on September 29 and has so far resisted multiple attempts by bears to pull the price back into the triangle. In the near future, if buyers successfully push XRP above the overhead resistance at $0.56, this could signal the start of a new uptrend, potentially leading the XRP/USDT pair to reach $0.66. On the other hand, a price downturn from $0.56 and a drop below the uptrend line could indicate profit-taking by bulls, resulting in a range-bound movement between $0.56 and $0.41 for some time.
Solana (SOL) has been moving within a large range of $14 to $27.12, and recent price action suggests a potential inverse head and shoulders pattern. Although setups formed within a range tend to be less reliable, they should not be ignored. If the price turns up and breaks above the neckline, the SOL/USDT pair may attempt a rally to $27.12, with a pattern target of $32.81. However, a slide below the 20-day exponential moving average ($20.95) could indicate that the bulls have given up, potentially leading to a drop to $17.33.
Cardano (ADA) experienced a downturn from $0.27 on October 2nd and reached the 20-day exponential moving average ($0.25) on October 4th. This level will be important to watch in the near term, as a rebound from the 20-day EMA could indicate a shift in sentiment from selling on rallies to buying on dips. If bulls manage to push the price above $0.27, an up-move towards $0.29 and later $0.32 could be expected. On the other hand, bears will have to bring the price below the 20-day EMA to prevent a rally and may push the ADA/USDT pair down to the significant support level at $0.24.
Dogecoin (DOGE) briefly rose above the 50-day simple moving average ($0.06) on October 2nd, but bearish resistance brought the price back down, suggesting that bears are still selling on relief rallies. The DOGE/USDT pair has now reached the formidable support level at $0.06, which has been tested repeatedly within a short time period. A break below this level may cause the pair to slump to the next major support at $0.055. However, the RSI has formed a bullish divergence, suggesting that bears may be losing their hold. The indicators, however, do not provide clear direction, so it may be best to wait for the price to close above the 50-day SMA or drop below $0.06 before placing any directional bets.
Other cryptocurrencies such as Toncoin (TON), Polkadot (DOT), and Polygon (MATIC) have also witnessed their own price movements and patterns. TON fell below the 20-day EMA ($2.09) on September 30, and bears have been successful in preventing the price from reclaiming this level. The TON/USDT pair will need to rebound above the 20-day EMA to suggest that the markets have rejected lower levels. DOT turned down sharply from the 50-day SMA ($4.24) on October 2 and broke below the 20-day EMA ($4.10) on October 3. The crucial support to watch for DOT is at $3.91, as a break below this level could signal further downward movement. Finally, MATIC experienced a tough battle between bulls and bears near the moving averages, with buyers eventually bouncing back on October 4. If buyers continue to build strength, they may push the price above the overhead resistance at $0.60.
In conclusion, the volatility in the bond market, coupled with growing economic uncertainty, has drawn attention to the crypto market as investors seek alternative investment opportunities. Institutional investors have also shown interest in cryptocurrencies, further indicating a potential bullish market. However, the price movements for individual cryptocurrencies will ultimately depend on various factors and market conditions. Traders should carefully analyze the charts and indicators while considering the overall market sentiment before making any investment decisions.
