The World Bank has warned of a possible global recession in 2023. In a press release on Sept. 15, the bank said that the current pace of rate hikes and policy decisions is unlikely to be enough to bring inflation down to pre-pandemic levels.
Ray Dalio, the billionaire founder of Bridgewater Associates said in a blog post on Sept. 13 that if rates were to rise to about 4.5% in the United States, it would “produce about a 20 percent negative impact on equity prices.”
The negative outlook for the equity markets does not bode well for the cryptocurrency markets as both have been closely correlated in 2022.
Let’s study the charts of the S&P 500 index, the U.S. dollar index (DXY) and the major cryptocurrencies to determine the key levels that could signal the start of a trending move.
S&P 500
The S&P 500 index (SPX) attempted a rebound off the uptrend line on Sept. 14 but the weak rebound showed a lack of urgency to defend the level. Sellers took advantage of this situation and pulled the price below the uptrend line on Sept. 15.
In this case, the price could rise to the uptrend line. If the price turns down from this level, it will suggest that bears have flipped the uptrend line into resistance. That could increase the possibility of a drop to 3,700.
The downsloping 20-day exponential moving average (EMA) (4,006) and the relative strength index below 37 suggest that bears are in command.
If the price turns up and rises above the uptrend line, it will suggest that the breakdown on Sept. 15 may have been a bear trap. That could propel the index to the downtrend line.
DXY
The DXY is in a strong uptrend. The bears tried to pull the price below the moving averages but the bulls vigorously defended the 50-day simple moving average (SMA(107) on Sept. 13.
If the price turns down from the current level or the overhead resistance and breaks below the 20-day EMA (109), it will suggest a consolidation in the near term. The price could then range between 107.58 and 110.78 for a few days. A potential trend change could be signaled if bears sink the price below 107.58.
BTC/USDT
Bitcoin formed a Doji candlestick pattern on Sept. 14, indicating indecision among the bulls and the bears. The uncertainty resolved to the downside on Sept. 15 but the bears have failed to build upon this advantage. This indicates that the selling pressure reduces at lower levels.
Contrarily, if the price turns down from the current level or the 20-day EMA, it will suggest that the sentiment remains negative and traders are viewing rallies as a selling opportunity. That could sink the pair to the strong support at $18,510. The zone between $18,510 and $17,622 could witness aggressive buying from the bulls because the failure to defend this zone may start the next leg of the downtrend.
ETH/USDT
Ether (ETH) bounced off the support line on Sept. 14 but the joy of the bulls proved to be short-lived. The price turned down sharply from the 20-day EMA ($1,609) and plunged below the support line on Sept. 15.
If the price turns up from the current level, the pair could recover to the moving averages, which may act as a strong resistance. The bulls will have to clear this hurdle to suggest that the selling pressure could be reducing.
BNB/USDT
The bears pulled BNB below the immediate support at $275 but they are struggling to keep the price down. This indicates that lower levels are attracting buyers.
If the price rises above the 20-day EMA ($283), the pair could rally to the resistance line of the triangle. A break above the triangle could push the pair to $338.
Another possibility is that the price turns down from the 20-day EMA and plummets below the support line of the triangle. That could start a decline to $258 and later to $239.
XRP/USDT
Ripple (XRP) has been range-bound between $0.30 and $0.39 for the past several weeks. In the past few days, the range has shrunk further with bulls buying the dips to $0.32 and bears selling the recovery to the 50-day SMA ($0.35).
If bulls drive the price above the 50-day SMA, the likelihood of a rally to $0.39 increases. The bears are expected to defend this level aggressively. On the downside, if the price slips below $0.32, the crucial support of $0.30 may be retested.
ADA/USDT
The bears are attempting to build upon their advantage in Cardano (ADA). They sold the recovery to the 20-day EMA ($0.48) on Sept. 14 and are trying to pull the price below the immediate support at $0.45.
If bulls want to gain the upper hand, they will have to arrest the decline and push the price above the moving averages. That could clear the path for a rally to the downtrend line. A break above this resistance could indicate that the bulls are back in the driver’s seat.
Related: Does Ethereum’s new ETHPoW fork stand a chance? ETHW price falls 65% post-Merge
SOL/USDT
Solana (SOL) turned down from the 20-day EMA ($33.84) on Sept. 15, indicating that the sentiment remains negative and bears are selling on minor rallies.
The rebound off the support could continue to face hurdles at the 20-day EMA and then again at the 50-day SMA ($36.95). If the price closes above this resistance, it could open the doors for a possible up-move to $48. Conversely, if the $30 level cracks, the pair could slide to the vital support at $26.
DOGE/USDT
Dogecoin (DOGE) has continued its slide and is near the strong support of $0.06. The price rebounded off this level on Sept. 7 hence it may again attract buyers.
If the price slips below the immediate support at $0.06, the pair could slide to the June low near $0.05. The bears will have to sink and sustain the price below this level to signal the start of the next leg of the downtrend. The pair could then extend the decline to $0.04.
DOT/USDT
The bulls attempted to start a recovery on Sept. 14 but higher levels attracted selling by the bears. Polkadot (DOT) turned down on Sept. 15 and the bears are trying to sink the price below the immediate support of $6.75.
As the previous three recoveries have turned down from the 50-day SMA ($7.86), it remains the key level to watch out for on the upside. The bulls will have to overcome this barrier to start a rally to $9.17 and then to $10.
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.
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