On Thursday, U.S. Federal Reserve chairman Jerome Powell is expected to deliver an important speech that will highlight a new strategy of targeting “average inflation.” This means that the Fed might allow inflation to overshoot the 2% target temporarily if it has spent a long time below that level.
If the Fed adopts this new strategy, it could keep interest rates near zero for five years or more, according to a Bloomberg report.
The abundant liquidity is likely to drive asset prices higher across the board and create bubbles that will eventually burst. If this occurs, investors are likely to lose complete faith in the central banks and fiat currencies.
Daily cryptocurrency market performance. Source: Coin360
Smart investors are likely to seek the safety of gold and Bitcoin (BTC) during this time of uncertainty. Larger investors have already started accumulating Bitcoin and this has pushed the number of addresses holding over 1,000 BTC to a new record high.
While this is all great news, traders will want to know if the crypto market will extend it’s current up-move or whether a period of extended consolidation is at hand.
Let’s study the charts to find out!
BTC/USD
Bitcoin plunged and closed (UTC time) below the 20-day exponential moving average ($11,554) on Aug. 25, which is the first indication that the bulls were losing their grip.
BTC/USD daily chart. Source: TradingView
The bulls are currently attempting to defend the $11,100–$10,900 support zone but are likely to face significant resistance at the 20-day EMA.
If the bulls fail to push the price back above the 20-day EMA, a drop to the 50-day simple moving average ($10,728) and then to $10,400 is possible.
Conversely, if the bulls can push the price above the 20-day EMA, a move to $12,113.50 is likely. The bears are likely to defend this level aggressively.
The 20-day EMA has flattened out and the relative strength index is just above the midpoint, which suggests a few days of range-bound action.
The next trending move is likely to start after the bulls push the price above the $12,113.50–$12,460 resistance zone or sink the price below the $10,400–10,000 support zone.
ETH/USD
The failure of the bulls to push Ether (ETH) above the $415.634 resistance on Aug. 24 attracted profit booking on Aug. 25 that pulled down the price to the critical support at $366.
ETH/USD daily chart. Source: TradingView
Although the bulls purchased the dip on Aug. 25, they are struggling to push the ETH/USD pair above the 20-day EMA ($393), which is a negative sign. This shows a lack of demand at higher levels.
A break and close (UTC time) below $366 could intensify selling and result in a drop to the 50-day SMA ($336). Such a move will suggest that a short-term top has been made at $446.479.
However, if the bulls can push the price above the 20-day EMA, a few days of range-bound action between $366– $415.634 is likely.
XRP/USD
XRP closed (UTC time) above the 20-day EMA ($0.284) on Aug. 24 but a lack of buying at higher levels again pulled down the price to the $0.268478 support.
XRP/USD daily chart. Source: TradingView
The bulls are currently attempting to defend the $0.268478 support but unless they sustain the price above the 20-day EMA, the advantage will remain with the bears.
If the bears sink the XRP/USD pair below $0.268478, a drop to the 50-day SMA ($0.25) is possible. This is an important support to watch out for because if it cracks, the decline can extend to the 61.8% Fibonacci retracement level of $0.241068.
Contrary to this assumption, if the pair rebounds off the $0.268478 support and rises above the 20-day EMA, then a few days of range-bound action between $0.326113 and $0.268478 is likely.
LINK/USD
The bulls failed to push Chainlink (LINK) above the overhead resistance of $16 on Aug. 23 and 24, which attracted profit booking that pulled the price back below the 20-day EMA ($14.49) on Aug. 25.
LINK/USD daily chart. Source: TradingView
However, the positive thing is that the lower levels are attracting buying by the bulls, which shows that the sentiment remains bullish. Currently, the LINK/USD pair has again risen above the 20-day EMA.
If the bulls can propel the price above $16, LINK will attempt to resume the uptrend and retest the highs at $20.1111.
On the other hand, if the pair again turns down from $16, the bears will try to sink the price to the 61.8% Fibonacci retracement level of $11.9281.
BCH/USD
The rebound from the breakout level of $280 in Bitcoin Cash (BCH) turned down from the 20-day EMA ($288) on Aug. 25, which suggests that the bears are aggressively defending this resistance.
BCH/USD daily chart. Source: TradingView
The bulls purchased the dip to the 50-day SMA ($271) on Aug. 25 but if they fail to push the price back above $280, it is likely to attract another round of selling that could sink the BCH/USD pair to $260 and then to $240.
The downsloping 20-day EMA and the RSI in the negative territory suggest that bears have made a comeback.
This bearish view will be invalidated if the pair rebounds off the current levels and rises above the $280–$295 resistance.
LTC/USD
Litecoin (LTC) turned around and plunged below the 20-day EMA ($59) on Aug. 25, which suggests selling by the bears on minor rallies.
LTC/USD daily chart. Source: TradingView
The next support on the downside is the 50-day SMA ($53) and if this support also gives way, a drop to $51 will be on the cards.
Conversely, if the LTC/USD pair rebounds off the current levels, the bulls will attempt to push the price above the downtrend line. If they succeed, a move to $64 and then to $68.9008 is possible.
The flat 20-day EMA and the RSI close to the midpoint suggest a few days of range-bound action.
BSV/USD
The bulls pushed Bitcoin SV (BSV) above the overhead resistance of $200 but could not clear the 20-day EMA ($206) hurdle on Aug. 24, which attracted selling on Aug. 25 that pulled the altcoin back below $200.
BSV/USD daily chart. Source: TradingView
The moving averages are on the verge of a bearish crossover and the RSI is in the negative zone, which suggests that the bears have the upper hand.
If the bulls fail to push the price back above $200 within the next few days, the BSV/USD pair is likely to slide to $160 and then to $146.20.
This bearish view will be invalidated if the bulls can push the price back above the downtrend line.
CRO/USD
Crypto.com Coin (CRO) turned down from the overhead resistance of $0.176596 on Aug. 25, which suggests that the bears are aggressively defending this level.
CRO/USD daily chart. Source: TradingView
However, both moving averages are gradually sloping up and the RSI is in the positive territory, which suggests that the bulls are at a minor advantage.
If the CRO/USD pair rebounds off the 20-day EMA ($0.166), the bulls will once again attempt to scale the price above $0.176596. If they succeed, the uptrend is likely to resume. The first target on the upside is $0.191101 and then $0.20.
Conversely, if the pair turns down and breaks below the 20-day EMA, a drop to the 50-day SMA ($0.157) is possible.
BNB/USD
Binance Coin (BNB) turned down from the overhead resistance of $22.93 on Aug. 25 and dropped below the 20-day EMA ($22), which suggests aggressive selling by the bears at higher levels.
BNB/USD daily chart. Source: TradingView
However, the bears could not capitalize on the opportunity and sink the BNB/USD pair below the critical support at $20.5710.
This has attracted buying from the aggressive bulls who are attempting to push the price above the downtrend line. If they succeed, a move to $22.93 and then to $23.91 is likely.
On the other hand, if the pair turns down from the downtrend line and plummets below $20.5710, a deeper correction to $19.10 is possible.
ADA/USD
Cardano (ADA) plunged to the $0.10–$0.11 support zone on Aug. 25, which is a negative sign. The moving averages have completed a bearish crossover and the RSI is in the negative territory, suggesting advantage to the bears.
ADA/USD daily chart. Source: TradingView
Currently, the bulls are attempting to defend the support zone aggressively. However, any recovery is likely to face stiff resistance from the 20-day EMA ($0.129). If the ADA/USD pair turns down from the 20-day EMA, the bears will attempt to sink the price below $0.10.
If they succeed, it will be a huge negative as the next support on the downside is way lower at $0.075.
This negative view will be invalidated if the bulls can push the price back above the 20-day EMA and the overhead resistance at $0.13.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.