The major U.S stock market indexes continued their decline last week as worsening macroeconomic conditions increased concerns of recession. The Dow Jones Industrial Average closed at its lowest level in 2022. Furthermore, major indexes recorded their fifth weekly close in the past six weeks. Although Bitcoin (BTC) has only declined marginally this week, it risks closing at the lowest level since 2020.
While a new multi-year weekly close is a negative sign, sellers will have to sustain the lower levels. If this isn’t done, it may turn out to be a bear trap.
Finally, the price action of the next few days is likely to witness heightened volatility. Here are the 3 coins expected to bull-up with bitcoin.
The Bitcoin bulls have successfully defended the $18,626 to $17,622 support zone in the past few days. However, they continue to face strong selling at the 20-day exponential moving average (EMA) of $19,720. This suggests that the bears continue to sell on minor rallies.
The downsloping moving averages indicate that the bears have the upper hand but the positive divergence on the relative strength index (RSI) suggests that the bearish momentum could be weakening.
A break and close above the 20-day EMA will be the first sign that the bears may be losing their grip. The BTC/Tether pair could then rise to the 50-day simple moving average (SMA) of $21,043 and later to $22,799. Buyers will have to overcome this barrier to set the stage for a rally to $25,211.
Another Token To Be Affected By Bitcoin Is ATOM/USDT
Cosmos (ATOM) has been trading above the breakout level of $13.46 for the past several days. This indicates that the sentiment remains positive and traders are buying on dips.
The 20-day EMA of $14.22 has flattened out and the RSI is near the midpoint, indicating a balance between supply and demand. If the price breaks above $15.26, the short-term advantage could tilt in favor of the buyers. The ATOM/USDT pair could then rise to $17.20.
This level may again act as a resistance but if buyers thrust the price above it, the pair could pick up momentum. A momentum so high that it could rise to $20.34 and later to $25.
Next on The List; ALGO/USDT
Finally, the uncertainty of the range-bound action between $0.27 and $0.38 resolved to the upside on Sept. 23, indicating the start of a new up-move. If that happens, Algorand (ALGO) could still be in its first leg of the uptrend.
The important level to watch on the downside is $0.38. If the bulls flip this level into support, it could increase the likelihood of the start of a new uptrend. The ALGO/USDT pair could then rally to $0.45 and later to $0.50.
This bullish view could invalidate in the near term if the price slips below $0.38 and re-enters the range. That could sink the price to the 20-day EMA of $0.33. If the price rebounds off this level, the bulls will again try to clear the overhead resistance.
The price rose above the overhead resistance at $0.38, but the bulls could not build upon this momentum. This shows that the bears have not yet given up and they continue to sell on rallies near $0.41.
On the upside, the bulls will have to push the price above $0.41 to signal the resumption of the up-move.