Bitcoin recovery could trigger buying in these 4 altcoins

The S&P 500 Index (SPX) ended the week with a slight loss of 0.29% but Bitcoin (BTC) is on target to end the week with a deep cut of more than 5%. The weakness in bitcoin dragged down many altcoins, reflecting the weak sentiment.

The ray of hope is the solid rally of bitcoin on May 12. Many analysts have been predicting that bitcoin will begin a recovery, but monitoring resource content indicators seem cautious.

In a recent analysis, he said that the lack of strong bidding from whales at lower levels could be a worrying sign. He believes that the bullish view will be invalidated if bitcoin sustains below the 200-week moving average.

Over the next few days, progress in debt ceiling talks between leaders of Congress and the White House is expected to take center stage. The uncertainty and risk of a possible US default may keep the rally in equity markets under control but it is difficult to predict how bitcoin and altcoins will react to all the chaos.

Bitcoin has started a corrective phase and most of the altcoins have broken below their respective support levels. Only a few cryptocurrencies are looking positive on the charts. Let’s analyze the charts of the top five cryptocurrencies that may change in the near term.

bitcoin price analysis

The long tail on Bitcoin’s May 12 candlestick suggests that bulls are aggressively buying dips to the neckline of an inverted head and shoulders (H&S) pattern.

The buyers will try to push the price back into the triangle but may face stiff resistance from the bears. A downside break above the 20-day exponential moving average ($27,959) and the relative strength index (RSI) below 41 indicate that the bears have a slight edge.

If the price declines from the 20-day EMA, the bears will again attempt to drag the BTC/USDT pair below $25,250. If they can pull it off, selling could intensify and the pair could drop further towards $20,000.

On the upside, the bulls will need to clear a barrier at the resistance line to regain control. The pair could then retest the overhead resistance at $31,000.

After facing stiff resistance at the 20-EMA, the bulls have overcome the hurdle. This indicates that the bulls are trying to seize control. The pair is likely to climb first towards the 50-simple moving average and then towards $28,400.

Conversely, if the price turns down sharply from the current levels, it will signal that the bears are attempting to turn the support line of the triangle into resistance. The pair could then decline towards the important $25,250 support.

cardano price analysis

Cardano (ADA)’s solid bounce from the uptrend line on May 11 shows that lower levels continue to attract strong buying.

The bulls will attempt to resume the recovery by taking the price above the 20-day EMA ($0.38). This level could act as a minor hurdle, but if the bulls overcome it, the ADA/USDT pair could continue to move towards the neckline of the inverted H&S pattern. A tough fight can be seen between the Bulls and the Bears at this level.

Another possibility is that the price breaks below the 20-day EMA and drops to the uptrend line. Frequent retesting of the support level at short intervals leads to its weakening. This could open the door for a possible decline towards $0.30.

The bulls pushed the price above the moving averages, indicating that the bears are losing their grip. The 20-EMA has started a gradual uptrend and the RSI is in the positive zone to indicate a comeback for the bulls.

If the buyers break the overhead resistance at $0.37, the pair could gain momentum and rally towards $0.40 and later $0.42. Conversely, if the price declines from $0.37, the pair could move towards the uptrend line.

universe value analysis

Cosmos (ATOM) bounced back from the $10.20 support on May 10, indicating that bulls are buying declines to this level.

The bears are trying to stop a relief rally at the 50-day SMA ($11.28), but the bulls haven’t given up much ground. This increases the chances of a rally above the 50-day SMA. If this happens, the ATOM/USDT pair could rally to the downtrend line.

This is an important level for sellers as a break above it will invalidate the bearish descending triangle pattern.

An important support to watch on the downside is $10.20. If it breaks, the descending triangle will be completed and the pair could drop again to $8.50.

The 4-hours chart shows that the relief rally is facing selling at higher levels, but price action is forming a potential inverse H&S pattern that will complete on a break and close above $11.30. The pair could then move higher towards $12 and later towards $12.50.

Alternatively, if the price declines and breaks below the 50-SMA, it would suggest that the bears are in control. The pair could then decline towards the important $10.20 support. A bounce from this level could keep the pair within the range of $11.30 and $10.20 for some time.

Connected: 4 Dangerous Charts as $27K Becomes a Formidable Hurdle for Bitcoin Bulls

Lido DAO Price Analysis

The Lido Dow (LDO) recovered from the $1.60 support and reached overhead resistance at the 20-day EMA ($1.95).

The bears are trying to defend the 20-day EMA but the bulls are not giving up. This suggests that buyers expect the recovery to continue. If the bulls drive the price above the 20-day EMA, the LDO/USDT pair could rally towards the downtrend line. This level is likely to attract strong selling by the bears.

If buyers stop the next decline above the 20-day EMA, it would suggest a change in sentiment from selling on rallies to buying on dips. The pair could then start a sustained recovery above the downtrend line.

On the downside, the bears would need to sink and sustain the price below $1.60 to signal bearish resumption.

The 4-hours chart shows that the bulls are attempting to propel the price above the overhead resistance at $1.98. If they succeed, the pair will complete a bullish double bottom pattern. The target of this reversal setup is $2.39. If this level is also overcome, the pair may reach $2.60.

Conversely, if the price declines from the current levels or $1.98 and breaks below the moving averages, it will suggest that the bears are active at higher levels. This could keep the pair stuck between $1.57 and $1.98 for some time.

arbitrum price analysis

Arbitrum (ARB) is finding support near the psychologically important $1 level, indicating that the bulls are aggressively buying the dips.

On the upside, the bears are attempting to halt the recovery to $1.20 but a minor positive in favor of the bulls is that they have maintained buying pressure. This increases the chances of a break above $1.20. If this happens, the ARB/USDT pair could rise to $1.40 and later to $1.50.

This positive outlook will be invalidated in the near term if the price declines sharply from $1.20. This would point to a possible consolidation between $1 and $1.20 for a few days.

The 20-EMA on the 4-hours chart is starting to move up and the RSI is in the positive zone to show that selling pressure is easing. Buyers will try to consolidate their positions by pushing the pair above $1.20. If they do, the pair will complete a double bottom pattern, with a target objective of $1.35.

The first signal of strength for the bears would be a break and close below the 20-EMA. This could drag the pair to $1.05. A slide below $1 would signal the resumption of the downtrend.

This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.