Price analysis 9/23: SPX, DXY, BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT
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The S&P 500 is down about 5% this week, while the Nasdaq Composite is down more than 5.5%. Investors fear that aggressive rate hikes by the Federal Reserve could trigger an economic recession. The yield curve between two- and 10-year Treasuries, which analysts watch to predict a recession, has inverted the most since 2000.
Amidst all the mayhem, it’s encouraging to see that Bitcoin (BTC) has outperformed both major indices and is down less than 4% for the week. Could this be a sign that Bitcoin’s bottom might be near?
Chain data shows that the amount of Bitcoin supply held in losses by long-term holders was around 30%, which is 2-5% below the level that hit Bitcoin’s bottom in March 2020 and December 2018. This metric suggests that Bitcoin may have more room to fall before it reaches its bottom.
Let’s examine the charts of the S&P 500, the US Dollar Index (DXY), and the major cryptocurrencies to see if the trend continues or if a reversal is likely.
The S&P 500 Index (SPX) fell below the 3,900 support on September 16, and the bears successfully defended the level in retests on September 17 and 21. Hence, this becomes an important level to keep an eye on as a break above 3,900 should be the first sign that the bulls are coming back.
A falling 20-day exponential moving average (EMA) (3,920) shows an advantage for the bears, but the relative strength index (RSI) in the oversold area suggests that the index may try to recover from the strong support area between 3,715 and 3,636.
A weak recovery from this zone indicates a lack of aggressive buying by the bulls. This could increase the chance of a drop below the crucial June low of 3,636. If this support collapses, the index could fall towards 3,325.
Conversely, a strong bounce from the support zone could lead to a retracement to 3,900. Exceeding this resistance could indicate a possible trend change in the near future.
The US dollar index (DXY) has been in a strong uptrend in recent months. Every dip is bought aggressively and the index continues to scale new highs. The bears’ attempts to force a trend reversal failed as the price broke above the 50-day simple moving average (SMA) ($108) on September 13.
After staying in a tight range for a few days, the index hit a new 52-week high on September 21. This restored the uptrend and the index could next try to rise to 115.
The sharp rally of the past few days has pushed the RSI into overbought territory, suggesting that a minor consolidation or correction is possible in the coming days.
The 20-day EMA (109) is an important support to watch on the downside, as a break below it could send the price down to the 50-day SMA. Bears need to pull the price below 107 to indicate a possible trend change in the near future.
Buyers have bought Bitcoin on a dip below $18,626, but the failure to push the price above the 20-day EMA ($19,841) shows that the bears are unwilling to give up the advantage. This raises the possibility of a retest of the vital June low of $17,622.
A break and close below $17,622 could cause panic and the BTC/USDT pair could fall to the next major support at $14,500.
While falling moving averages indicate an advantage for the bears, a positive deviation in the RSI suggests that selling pressure could ease. This view may be strengthened if the bulls drive and sustain the price above the 20-day EMA.
This could push the price towards the upper resistance zone between the 50-day SMA ($21,200) and $22,799. Such a move suggests that the pair may continue to bottom between $17,622 and $25,211 for longer.
Ether (ETH) has been trading within a bearish channel pattern for the past few days. In a channel, traders usually buy near support and sell near resistance.
The bears tried to sink the price below the channel on September 21, but the bulls successfully defended the level. The bulls are trying to push the price to the 20-day EMA ($1,467), where they may face stiff resistance from the bears.
If the price turns down from the current level or the 20-day EMA, it suggests that the sentiment remains negative and traders are selling on every small rally. The bears will then again try to pull the price below the channel and challenge the psychological support at $1,000.
Conversely, if the price rises above the 20-day EMA, the pair may reach the resistance line of the channel. A break and close above the channel can indicate a possible trend change.
Binance Coin (BNB) has fluctuated between the 20-day EMA ($276) and $258 in recent days. This shows that the bulls are defending the immediate support at $258, but they have failed to push the price above the 20-day EMA.
This tight trading is unlikely to continue for long. If buyers push the price above the 20-day EMA, the BNB/USDT pair may rise to the resistance line of the descending channel. Bulls need to overcome this obstacle to hint that the corrective phase may be over. The pair could then try to rise to $338.
If the price turns down from the current level or the resistance line of the channel, the bears will again try to sink the pair below $258. If they manage to do that, the pair can land on the support line.
XRP broke above the $0.41 overhead resistance on September 20. Bears tried to trap aggressive bulls on September 21, but buyers had other plans. They bought the dip vigorously and pushed the price above the upper resistance on September 22.
The model target to break the range of $0.30 and $0.41 was $0.52 and the same was achieved on September 23. This sharp move pushed the RSI into overbought territory, suggesting a minor correction or consolidation in the near future. The long heart of the September 23 candlestick indicates profit booking at a higher level.
Usually, after breaking a range, price tends to retest the breakout level. In this case, the price may drop to $0.41. If the bulls turn this level into support, XRP/USDT will try to continue the upward movement. If the price rises above $0.56, the next stop could be $0.66. On the other hand, a break below $0.41 could indicate that the recent breakout was a bear trap.
Cardano (ADA) bounced off the uptrend line on September 22, indicating that the bulls are vigorously defending this level. The price reached a downtrend on September 23, but a long heart on the candlestick indicates that bears are active at a higher level.
The 20-day EMA ($0.46) has started to decline and the RSI is slightly below the midpoint, indicating a slight advantage for the bears. If the price continues its decline and breaks below the uptrend, the ADA/USDT pair may fall to $0.40. This is an important level for the bulls to defend as a break below it could continue the downtrend.
If the bulls want to gain the upper hand, they need to drive and hold the price above the downtrend. The pair may then rise to $0.60, where bears may once again find stiff resistance.
Related: XRP Hits 13-Month High Against Bitcoin With 35% Daily Gain – But Is A Correction Inevitable?
Solana (SOL) has been caught between the 20-day EMA ($33) and immediate support at $30. This shows the state of equilibrium between buyers and sellers.
This uncertainty is unlikely to last long. Bears are trying to take over by pulling the price below $30. If this happens, the SOL/USDT pair could fall to a strong support at $26. Bulls are expected to aggressively defend this level because if this support is cracked, the SOL/USDT pair could witness panic selling and fall towards $20.
To reverse this negative view in the short term, buyers need to push the price above the moving averages and the ceiling resistance at $39. If they succeed, the pair could rise to $48.
Buyers bought a dip below immediate support on September 21st, but are struggling to hold Dogecoin (DOGE) above the 20-day EMA ($0.06) on September 23rd. This suggests that the bears will continue to sell in the rally.
The bears are trying to extend their advantage by pushing the price below the immediate support near $0.06. If they do, the DOGE/USDT pair could extend its decline to the June low of $0.05. This is a key level as a break below it could signal the start of the next phase of the downtrend.
Conversely, if the price stays above the 20-day EMA, the pair may rise to the 50-day SMA ($0.07). If the bulls pierce this resistance, the pair could move towards $0.09.
Buyers successfully defended the critical $6 support in September. 21 and 22, but a low bounce suggests that demand is drying up at a higher level. The longer Polkadot (DOT) trades below the 20-day EMA (6.87), the higher the chance of a break below $6.
If the bears sink and hold the price below $6, selling momentum may accelerate and the DOT/USDT pair may continue its downtrend. The next major support below is $4.
Alternatively, if the price bounces off $6 or breaks sharply below support, it suggests bulls will continue to buy at lower levels. The bulls need to push the price above the moving averages to clear the path for a possible rally to $10, which again is likely to act as a barrier.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading business involves risk. You should do your own research when making a decision.
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