BTC at $28K, ARB, XRP, EOS and AAVE charts hint upside potential
On May 27, the White House and House Republicans agreed upon a tentative deal to avoid a catastrophic debt default in the United States. The U.S. equities markets rallied in anticipation of the deal on May 26, and the positive sentiment has rubbed off onto the cryptocurrency sector, which is attempting a recovery.
Buying is not limited to Bitcoin (BTC) alone, as select altcoins are also showing signs of a short-term up-move. However, sustaining the rally at higher levels may prove to be difficult for the bulls.
After the debt ceiling deal, traders are likely to focus their attention on the Federal Reserve’s rate hikes. The hot Personal Consumption Expenditures data on May 26 increased the likelihood of a rate hike at the Fed’s June meeting. The probability of a 25 basis point rate hike has risen from 17% a week back to 64% on May 28, according to the CME FedWatch Tool.
Along with Bitcoin, which altcoins are looking ripe for a short-term up-move? Let’s study the charts of these top five cryptocurrencies to spot the important levels to watch out for.
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Bitcoin price analysis
Bitcoin has reached the overhead resistance zone between the 20-day exponential moving average ($27,146) and the support line of the symmetrical triangle. This zone is likely to witness a solid tussle between the bulls and the bears.
If the price turns down from the overhead zone, the bears will make another attempt to yank the price to the pivotal support at $25,250. The bulls are expected to defend the zone between $25,250 and $24,000 with all their might because a break below it could intensify selling. The BTC/USDT pair could then tumble to $20,000.
On the contrary, if buyers overcome the overhead obstacle and push the price back into the triangle, it will suggest strong buying on dips. That increases the possibility of a break above the resistance line of the triangle. The pair may then soar to $31,000.
The four-hour chart shows that the pair is trading inside a descending channel pattern, and the bears are trying to defend the resistance line. If the price turns down from the current level but rebounds off the 20-EMA, it will indicate that dips are being bought.
The bulls will then again try to thrust the price above the channel. If they succeed, the pair may start an up-move to $28,400.
Contrarily, a break below the moving averages will suggest that the pair may extend its stay inside the channel for some more time.
XRP price analysis
XRP (XRP) has formed an inverse head and shoulders pattern, which will complete on a break and close above the neckline.
The 20-day EMA ($0.45) is sloping up gradually, and the RSI has jumped into positive territory, indicating that the path of least resistance is to the upside. If bulls drive and sustain the price above the neckline, the XRP/USDT pair could start a rally to the overhead resistance zone between $0.54 and $0.58. The pattern target of the bullish setup is $0.55.
This positive view will be negated in the near term if the price turns down from the neckline and plummets below the 20-day EMA. The pair could then descend to the important support near $0.40.
The chart for the past four hours shows that the pair is experiencing a difficult struggle between buyers and sellers near the neckline. However, the rising 20-EMA and the RSI in the positive zone indicate a slight advantage for the buyers.
If the price bounces off the 20-EMA, it will increase the likelihood of breaking above $0.48. If this happens, the pair is expected to start moving up. On the other hand, if the price turns down and breaks below the moving averages, it will give a short-term advantage to the sellers. The pair may then drop to $0.44.
Analysis of the price of Arbitrum
The bulls pushed Arbitrum (ARB) back above the 20-day EMA ($1.17) on May 28, indicating the start of a potential recovery.
The sellers are likely to present a strong challenge at $1.20, but if the bulls manage to break through this level, the ARB/USDT pair could pick up momentum. There is a minor resistance at the 50-day simple moving average ($1.29), but it is likely to be crossed. The pair may then climb to $1.36 and later to $1.50.
If the bulls want to prevent the rally, they will have to quickly pull the price back below the 20-day EMA. If they manage to do that, the pair may slip to $1.06 and then to $1.01. This is an important zone for the bulls to defend because if it cracks, the pair may witness a sharp fall to $0.73.
The chart for the past four hours shows that the bulls have pushed the price above the resistance line of the symmetrical triangle pattern. The sellers are trying to stall the increase at $1.20, but if the bulls do not allow the price to re-enter the triangle, it will enhance the prospects of an upward breakout. The pattern target for the setup is $1.43.
On the other hand, if the price turns down and breaks back into the triangle, it will suggest that the recent breakout may have been a trap for the bulls. The sellers will then try to push the price back towards the support line of the triangle.
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Analysis of EOS Token price
EOS (EOS) has been fluctuating between $0.78 and $1.34 for several months. Generally, in such a large range, traders buy near the support and sell near the resistance.
The EOS/USDT pair bounced off $0.81 on May 25 and rose above the 20-day EMA ($0.89) on May 28. This is the first indication that the range remains intact. The bulls will try to push the price to the 50-day SMA ($1) where the sellers are likely to mount a strong defense.
If the next dip finds support at the 20-day EMA, it will suggest that the bulls are in control. The pair could then rise to $1.11. The sellers will have to push the price below the important support at $0.78 to indicate the start of a downtrend.
The recovery attempt is facing selling near the overhead resistance at $0.93, but the bulls have not given up much ground. The moving averages have completed a bullish crossover, and the RSI is near the overbought zone, indicating that the bulls have the upper hand.
If buyers drive the price above $0.93, the pair could pick up momentum and rise toward the psychological level of $1 and subsequently to $1.11. However, this positive outlook could be invalidated in the near term if the price turns down and breaks below the moving averages.
Aave price analysis
Aave ( AAVE ) has been experiencing a decline within a descending channel pattern, which typically acts as a bullish setup.
After struggling near the 20-day EMA ($65.50) for the past few days, the buyers managed to push the price above the resistance on May 27th. This indicates the start of a possible relief rally.
The AAVE/USDT pair may initially increase towards the 50-day SMA ($70) and then attempt to rally towards the resistance line. If this level is broken and closed above, it may initiate a short-term upward movement.
However, if the price turns downwards from the current level and breaks below the 20-day EMA, it may indicate that demand is decreasing at higher levels. The next support on the downside is at $62.
The four-hour chart reveals the formation of an ascending triangle pattern which will complete upon a break and close above $67.40. The pair may then start an upward movement towards the pattern target of $74.
However, if the price turns downwards from the current level, it may indicate that bears are strongly defending the $67.4 level. If the price falls below the moving averages, it may suggest that the pair may remain inside the triangle for some time. Breaking below the triangle will invalidate the positive setup, giving an advantage to the bears.