For large parts of this year, the US equities markets were under a strong bear grip. The S&P 500 Index and the Nasdaq Composite both have fallen three quarters in succession, which is a first since 2009. The Dow Jones Industrial Average was the worst September since 2002, with no respite from selling. These numbers show the extent of the market’s chaos.
These disappointing numbers aside, Bitcoin ( BitcoinTC) as well as select altcoins did not lose much ground in September. This is the first sign of selling slowing down at lower levels. Long-term investors might have begun bottom fishing.
Investors will continue to pay attention to the inflation data in the fourth quarter. An indication of inflation topping could lead to a sharp recovery of risk assets. However, if inflation continues to be stubbornly high, then there could be a series of sell-offs.
Let’s look at the charts for the S&P 500, DXY and major cryptocurrencies to see if there is a recovery.
The S&P 500 index (SPX), has been subject to intense selling pressure over the last few days, but the bulls have held firm. Bulls are now buying dips close to $3,636.
The $3,737 level is the first resistance to the upside. Bulls could push the price higher than this level and the index could reach the 20-day exponentially moving average (EMA) (3,818). This is an important level to watch in a downtrend. A break or close below it could indicate that bears are losing their grip.
Strong rallies follow sharp declines. This could lead to the index reaching the downtrend line, and then the 50-day simple movement average (SMA), which is $4,012.
They will likely have other plans. They will attempt to prolong the downtrend by sustaining the price below $3.636 and sinking it further. The index could fall to $3500 if they succeed. It may also plummet to $3325.
On Sept. 28, the U.S. dollar index soared to $114.77, pushing the relative strength indicator (RSI) into deep overbought territory. The short-term traders may have profited from this and pulled the price close to the 20-day EMA 111.
To indicate that bullish momentum is weakening, the bears will need to yank the price lower than the 20-day EMA. This could open the way for a drop to the 50 day SMA (108).
Bulls will likely be aggressive in buying the area between the 50-day SMA (uptrend line) because failure to defend this zone could indicate that the index has topped.
If the price rises from its current level or bounces off the 20-day EMA it will be a sign that bulls are buying on dips. The buyers will attempt to push the price higher than $114.77, thereby resuming the uptrend. The next objective is $118.
Bitcoin rebounded from the $18,626 support on Sept. 28, which indicates that bulls are still fiercely defending this level. Bulls are buying intraday dips as evidenced by the long tail of the candlestick over the past two days.
On Sept. 30, the bulls pushed the price higher than the 20-day EMA ($19.602) but are having trouble maintaining the higher levels. This indicates that bears are selling close to the 50-day SMA ($20.621).
The likelihood of a rally towards the downtrend line is increased if bulls don’t allow the price to fall below the 20-day EMA. Although bears will likely resist at this level, if bulls overcome this obstacle, the BTC/USDT pairing could indicate a short-term trend shift. This could lead to a rise of the pair to $22,799.
Contrary to this assumption the pair could drop back to the $18,626-$17,622 support zone if the price falls below the current level or 50-day SMA ($20.625).
The price of Ether ( ETH) has been falling in a downward channel pattern over the past few days. The price is stuck at $1,250 to $1,410 in the short-term, which indicates that there is still demand for Ether, but the price is selling close to the resistance.
The price movement within the range is often random and volatile. It is therefore difficult to predict with certainty the direction of the breakout.
The bulls will absorb the supply if the price breaks $1,410. This could push the price above the channel’s resistance line. To suggest a possible trend change, the bulls will need to overcome this obstacle.
The bears will try to consolidate their advantage by pulling down the ETH/USDT pairs below the channel if the price falls below $1,250. The pair could fall to $1,000 if they succeed.
BNB rose sharply from $266, breaking above the 20-day EMA ($278) Sept. 28. This shows that bulls are buying lower levels.
Although the bulls have pushed the price higher than the resistance line of descending channel on September 29, they are now facing resistance at the 50 day SMA ($288). The chances of a break above 50-day SMA will increase if bulls don’t allow the price to fall below the 20-day EMA. The BNB/USDT exchange could rally to $300, and then to $338.
Contrarily, if the price falls below the 20-day EMA it will indicate that bears are continuing to sell higher levels. The price could fall to $258, which is strong support.
XRP recovered from the 20-day EMA ($0.43) Sept. 28, indicating a shift in sentiment from buying on dips to selling on rallies. The bears will not give up, as they will continue to try to stop the recovery in $0.52-$0.56 zone.
The possibility of a break above this overhead zone is increased if buyers don’t give up too much ground. A break above $0.56 signals the resumption or continuation of the uptrend. The XRP/USDT exchange rate could rise to $0.66.
If the price falls further, the pair may drop to the breakout point of $0.41. This level will be vigorously defended by the bulls. The pair could enter range bound action for a few more days if the price bounces off of this level.
Cardano’s ( AD) September 28 and 29 candlesticks shows that bulls bought at lower levels to protect the uptrend line. Despite the fact that the price rose above its uptrend line on Sept. 29, buyers were unable to sustain the recovery.
The price fell below the Sept. 30 uptrend line. The downward-sloping moving averages, and the RSI in negative territory indicate that the path to the downside is the most likely. The ADA/USDT currency pair could fall to $0.40 if the price falls below $0.42. This level is expected to be defended by the bulls.
However, strong buying at lower levels will be encouraged if the price moves up from its current level. The bulls will attempt to push the price higher than the 20-day EMA ($0.45), and then challenge resistance at the 50 day SMA ($0.47).
Related: Bitcoin rises above $20K as 6% BTC rally gains steam before the monthly close
Buyers are trying to find a lower price in Solana ( SOL). The price recovered from $31.65 on Sept. 28, and reached the 50 day SMA ($34.70 on Sept. 30.
The 20-day EMA ($33.30), is trying to rise, and the RSI just above the halfway point, suggesting that bulls are attempting a return. The bullish momentum could pick-up if the price breaks above the 50 day SMA. If that happens, the SOL/USDT exchange could rise to $39. This level is expected to be a strong resistance for the bears.
Alternativly, if the price drops below the 50-day SMA the pair could fall to $31.65. A drop below this support can send the pair down to $30.
Dogecoin ( DOGE) fell below the 20-day EMA ($0.06) Sept. 25, and the bears stopped attempts by the bulls for a resumption of recovery on Sept. 27,
The 20-day EMA is not flattish, and the RSI is just above the midpoint. This indicates a balance between supply/demand. If the price falls below $0.06, this balance could favor the bears. This could lead to a plunge of the price to $0.05
If the bulls drive the price higher than the 50-day SMA ($0.06), they will have the upper hand. The DOGE/USDT currency pair could rally to $0.07, where bears might again mount stiff resistance.
For the past few days, Polkadot ( DOT), has traded in a narrow range of $6.64 to $6.64. This is a sign of a difficult battle between the bears and bulls.
Bears are favored by the slowly decreasing moving averages and the RSI that is in the negative territory. The DOT/USDT pairing could begin the next leg in the downtrend if the price falls below $6. This could lead to the pair sliding to $4.
Bulls must push the price higher than the 20-day EMA ($6.64) to negate this negative bias. This will indicate that consolidation close to the support was an accumulation phase. The pair could then reach the 50-day SMA ($7.26) or later, to $8.
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph. Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.
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