Positive developments regarding the China Evergrande situation and the Federal Reserve's monetary policy have contributed to a strong rebound in Bitcoin and altcoin prices. On September 22, as fears of widespread contagion from Evergrande's potential default eased, both the cryptocurrency market and U.S. equities showed signs of recovery.
Ray Dalio, co-chairman of Bridgewater Associates, commented on September 22 that Evergrande’s debt is "manageable." Ming Tan, a director at S&P, suggested that the Chinese government might step in to restructure the company.
The Crypto Fear & Greed Index dropped to 21, indicating extreme fear among investors. However, in an interview with CNBC, Galaxy Digital CEO Mike Novogratz stated that as long as Bitcoin (BTC) holds above $40,000 and Ethereum (ETH) stays above $2,800, the crypto market remains in good shape.
Traders are now turning their attention to the Federal Reserve's policy statement on September 22, which included economic and interest rate projections, followed by a press conference by Chair Jerome Powell.
Can Bitcoin and altcoins sustain their rebound, or will higher levels attract selling pressure from bears? Let’s analyze the charts of the top ten cryptocurrencies.
BTC/USDT
Bitcoin fell below the neckline on September 21, completing a bearish head-and-shoulders pattern. However, a positive sign emerged on September 22 when buyers pushed the price back above the neckline, indicating strong buying interest at lower levels.
If buyers can sustain the price above the neckline, it could trap aggressive short sellers, leading to a short squeeze. The BTC/USDT pair might then rally toward the 20-day Exponential Moving Average (EMA) at $46,038, where bears are likely to mount a strong defense.
The moving averages have formed a death cross, and the Relative Strength Index (RSI) is in negative territory, suggesting that bears are in control. If the price fails to hold above the neckline, sellers will attempt to resume the downtrend. The first support on the downside is at $37,332.70, followed by the pattern target at $32,423.05.
A breakout and close above the moving averages would be the first sign that the correction may be over.
ETH/USDT
Ethereum plummeted on September 20, closing below $3,000 and forming a bearish head-and-shoulders pattern. Typically, a breakdown below the neckline is followed by a retest, which occurred on September 22.
The moving averages have completed a death cross, and the RSI is in negative territory, favoring the bears. If the price turns down from current levels, sellers will likely push toward the pattern target of $1,972.12.
Conversely, if buyers sustain the price above $3,000, it would signal accumulation at lower levels. The ETH/USDT pair could then rally to the 20-day EMA at $3,303, which may act as a strong resistance. A break and close above this level would indicate that bulls are back in the game.
ADA/USDT
Cardano (ADA) is in a strong corrective phase, but buyers are attempting to defend the key support at $1.94. However, they are likely to face stiff resistance at the 20-day EMA ($2.38).
The moving averages are on the verge of a death cross, and the RSI is in negative territory, suggesting that bears have the upper hand. If the price turns down from the 20-day EMA, sellers may again challenge the $1.94 support.
A break and close below this level could open the doors for a drop to $1.60. Buyers will need to push and sustain the price above the 20-day EMA to signal the start of a sustained recovery. The ADA/USDT pair could then rise to $2.60 and later to $2.80.
BNB/USDT
BNB broke below the September 7 low of $369 on September 20 and hit the strong support at $340 on September 21. Buyers are currently defending this level.
The moving averages have completed a death cross, and the RSI is below 41, indicating that bears are in command. Any recovery is likely to face strong selling near the 20-day EMA ($410).
If sellers pull the price below $340, the BNB/USDT pair could decline to the psychological support at $300 and then to $250. This negative view will be invalidated if buyers push and sustain the price above the overhead resistance at $433.
XRP/USDT
Ripple (XRP) crashed on September 20, closing below $0.95, which was also below the September 7 intraday low. This suggests that supply exceeds demand. The moving averages have completed a death cross, and the RSI is in negative territory, indicating that bears are in control.
The current relief rally is likely to face resistance at the 20-day EMA ($1.06). If the price turns down from this level, it will signal that traders are selling on rallies. Sellers will then attempt to resume the downtrend.
If the price breaks below $0.85, the XRP/USDT pair could drop to the next support at $0.75. Buyers will need to push and sustain the price above the $1.07 to $1.13 resistance zone to signal strength.
SOL/USDT
Solana (SOL) broke below and closed under the 20-day EMA ($144) on September 20, the first sign that bullish momentum may be weakening. On September 21, buyers attempted to push the price back above the 20-day EMA but failed, indicating that sellers are attempting a comeback.
The SOL/USDT pair bounced from the 61.8% Fibonacci retracement level at $123.42 and has reached the 20-day EMA.
If buyers drive the price above the 20-day EMA and the descending trendline, the pair could rally to $171.47. This level may again act as resistance, but a break above it could result in a move to $200 and then to $216.
Conversely, if the price turns down from current levels or the trendline, it will signal selling at higher levels. Sellers will then try to pull the price below $123.42 and extend the decline to the 50-day Simple Moving Average (SMA) at $104.
DOT/USDT
Polkadot (DOT) broke below the 50-day SMA ($27.71) on September 21, but buyers purchased aggressively and reclaimed the level on September 22. This appears to have trapped sellers, resulting in a short squeeze.
The DOT/USDT pair has reached the 20-day EMA ($31.42), a critical level to watch. If buyers thrust the price above this resistance, the pair could rally to $35 and then retest $38.77.
Conversely, if the price turns down from the 20-day EMA, it will signal that traders are selling on rallies. Sellers will then make another attempt to pull the price to the September 7 intraday low of $22.66.
DOGE/USDT
Dogecoin (DOGE) broke below the $0.21 support on September 20, but sellers could not sustain the breakdown below the next support at $0.19. This suggests demand at lower levels.
Buyers are attempting to sustain the price above $0.21 on September 22. If successful, the DOGE/USDT pair could rise to the 20-day EMA ($0.24), where sellers are likely to mount a strong defense.
If the price turns down from the 20-day EMA, sellers will again try to pull the price below the $0.21 to $0.19 support zone. If they succeed, the pair could drop to the critical support at $0.15.
Buyers will need to push and sustain the price above the descending trendline to signal that the correction may be over.
AVAX/USDT
Avalanche (AVAX) rebounded strongly from the 20-day EMA ($56.34) on September 22, indicating that sentiment remains positive and traders are buying the dips.
Buyers have pushed the price above the overhead resistance at $66.24, increasing the possibility of a retest of the all-time high at $76.27. A break and close above this resistance would signal the resumption of the uptrend.
Contrary to this assumption, if the price turns down from current levels or the overhead resistance, it will signal profit-booking at higher levels. Sellers will then make another attempt to pull the price below the 20-day EMA.
If they succeed, the AVAX/USDT pair could start a deeper correction to $48 and then to the 50-day SMA ($40.49).
UNI/USDT
Uniswap (UNI) broke below the September 7 intraday low of $21, indicating that traders were rushing to exit. The price is currently correcting within a descending channel pattern.
The 20-day EMA ($24.10) is sloping down, and the RSI is below 41, suggesting that bears have the upper hand. Any recovery from current levels is likely to face strong resistance at the 20-day EMA.
If the price turns down from this resistance, the UNI/USDT pair could drop to the support line of the channel. A break below $18 could open the doors for a decline to $13.
This negative view will be invalidated if the price breaks out and closes above the descending channel. The pair could then gradually move up to $27.62.
Frequently Asked Questions
What is a death cross in technical analysis?
A death cross occurs when a short-term moving average (like the 50-day SMA) crosses below a long-term moving average (such as the 200-day SMA). It is often considered a bearish signal, indicating potential further downside.
How does the Fear & Greed Index work?
The Crypto Fear & Greed Index measures market sentiment based on factors like volatility, market momentum, and social media activity. A low value (like 21) suggests extreme fear, which can sometimes indicate a buying opportunity.
Why is the neckline important in head-and-shoulders patterns?
The neckline acts as a key support or resistance level. A break below it in a head-and-shoulders top pattern often signals a trend reversal from bullish to bearish, with price targets derived from the pattern's height.
What does RSI below 40 indicate?
An RSI below 40 typically indicates bearish momentum, suggesting that selling pressure is dominant. However, it can also signal oversold conditions, which might precede a rebound.
How do Fibonacci retracement levels help in trading?
Fibonacci retracement levels (like 61.8%) indicate potential support or resistance areas where traders might expect price reversals during corrections within a larger trend.
What is a short squeeze?
A short squeeze happens when prices rise rapidly, forcing traders who had shorted an asset to buy it back to limit losses. This buying can further fuel the price increase. For the latest tools to monitor such market movements, 👉 explore real-time analytics platforms.