Crypto Frontline

BTCUSD (Coinbase)

Bitcoin continued to sell off once we published our last weekly analysis but managed to find a bottom around $18,200. The FED press conference was very hawkish and surprised on the upside in terms of interest rate expectations. Obviously, the US Dollar moved up and crushed all risk assets, including BTC.

However, the selloff looks contained, probably because we are entering a seasonal period during which cryptocurrencies are posting returns. That does not mean a bottom has been reached, but things could get better as October kicks in.

In terms of technicals, traders should watch a symmetrical triangle that’s about to break. The direction could dictate the next leg and there is a slight advantage for buyers. In that case, we think Bitcoin can move towards $20,500 and continue to bank on new gains towards $22,500 if the 4h chart 200 SMA would not act as a barrier.

Further losses below the 20 EMA will put pressure on $18,200 and if that fails to cap the downside, $17,700, where the current 2022 low is placed, should revive more buyers. Although we’re slightly optimistic, you need to remain cautious and watch for US Dollar, because that could be the signal for a rebound in risk.

ETHUSD (Kraken)

As we’ve expected last week, the area around $1,300 is where the downside in Ether was capped. Even if the buyers are not out of the woods yet, the fact there’s buying interest communicates people still want to gain exposure. The post-merge sell-the-fact dynamics could be dissipating, creating a proper environment for a squeeze higher.

The last two days have been shallow in terms of daily ranges, so it might be appropriate to wait and see how the sentiment will unfold tomorrow. As long as ETH trades above $,1300, we think there is scope for a move towards $1,500.

Consistently selling below $1,300 could mean buyers will have to wait until the price gets closer to $1,000 before a meaningful bounce takes place. It’s kind of a mixed bag and any scenario can happen at this point.

ALGOUSD (Coinbase)

In a sea of red, a token jumping more than 25% in a week should stand out. That’s the case with Algorand, which recently managed to break outside a range that has been in place since mid-June.

This is an important technical development and as long as the token trades above 38 cents, we believe it can move towards the daily 200 SMA, located around 47 cents. Stronger resistance could emerge near 50 cents, but if the price can move up so much, it will be good news for crypto buyers.

Like the majority of cryptos, ALGO has been in a structural downtrend for a long time, so one should not exclude the possibility of a false break. An early signal for that would be if the price breaks back inside the range impulsively. It also has to breach the daily 20 EMA to raise the stakes for a retest of the bottom of the range.