Bitcoin bulls are attempting to reclaim the $40,000 level and if this happens, DOT, XMR, APE, and CAKE could be the first altcoins to break higher.
The sharp drop in US stock markets on April 22 suggests that investors are becoming increasingly nervous about the aggressive stance of central banks. The market expects a 250 basis point rate hike by the US Federal Reserve in 2022. In addition, there is an expectation that the European Central Bank will raise rates for the first time since 2011, according to a source in Reuters.
Data from Coinglass showed that funding rates on crypto derivatives exchanges remained negative over the weekend, indicating a bearish bias. Failure to hold a rally has pushed the Crypto Fear and Greed Index back into “extreme fear” territory.
Could Bitcoin attract strong buying at lower levels? If that happens, the selected altcoins could outperform. Let us study the charts of the top five cryptocurrencies that show a positive chart structure.
BTC/USDT
Bitcoin broke below the psychological support at $40,000 on April 22, but the bears have been unable to build on this advantage. The successive inside candlestick patterns on April 23 and 24 suggest indecision between the bulls and the bears.
If the price bounces hard off the support line, it will indicate strong demand at lower levels. The bulls will have to push and sustain the price above the 50-day SMA ($41.993) to signal that the correction may be over. Afterwards, the pair can attempt a rally to the 200-day SMA ($47.828).
Alternatively, if the price breaks below the channel, the selling could intensify further and the pair could drop to $34.322 and then $32.917.
DOT/USDT
Polkadot (DOT) has been trading near the overhead resistance at $19 for the past few days. This suggests that the bears have successfully defended the level, but a minor upside is that the bulls have not given much ground to the sellers.
The slightly downward sloping 20-day EMA ($19) and the RSI in the negative zone suggest that the bears have a slight advantage. If the price turns down and drops below $18, the possibility of a drop to the strong support at $16 increases.
Conversely, if the bulls push the price above the 50-day SMA ($19), the bullish momentum could pick up and the DOT/USDT pair could rally to the overhead resistance at $23. The bears will likely ride strong defense at this level.
USDT/XMR
Monero (XMR) is correcting in a bullish move. The price turned down from $290 on April 22, which indicates that the bears pose a strong challenge near the psychological level of $300.
The XMR/USDT pair might first drop to the 20-day EMA ($245), which is likely to act as strong support. If the price bounces hard off this level, it will indicate that the bulls are buying the dips. Then, the pair might again try to break above the overhead resistance at $300. If that happens, the pair can rally to $340.
Alternatively, if the price breaks below the 20-day EMA, the selling could intensify and the pair could slide to the 50-day SMA ($215).
APE/USDT
Ape Coin (APE) broke out of the symmetrical triangle pattern on April 19, indicating that the indecision between the bulls and bears has resolved in favor of the buyers.
The 20-day EMA ($13.67) has turned up and the RSI is in the positive zone, which indicates that the bulls are in command. There is minor resistance at $18.44 from where the APE/USDT pair turned down on Apr 23.
If the price turns up from the current level, the bulls will try to push the pair above $18.44. If they are successful, the pair could rally to $20 and then $24. This positive view could be not valid in the short term if the price turns down and breaks below the 20-day EMA.
CAKE/USDT
PancakeSwap (CAKE) recently bounced off the downtrend line, indicating that the bulls had flipped the level to support. The 20-day EMA ($8.69) and the 50-day SMA ($7.71) are gradually rising and the relative strength index is in the positive territory, which suggests that the bulls have the upper hand. If the buyers push and sustain the price above the 200-day SMA, the CAKE/USDT pair could rally to $13.50 and then $15.
By Audy Castaneda
