The S&P 500 ended its four-week-long recovery last week after minutes from the Federal Reserve’s July meeting hinted that the central bank’s rate hikes will continue until inflation is under control. Members of the Fed said there was no evidence that inflation pressures appear be easing.
Another dampener was the statement by St. Louis Fed president James Bullard who said that he would support a 75 basis point rate hike in September’s Fed policy meeting. This reduced hopes that the era of aggressive rate hikes may be over.
Weakening sentiment pulled the S&P 500 lower by 1.29% for the week. Continuing its close correlation with the S&P 500, Bitcoin (BTC) also witnessed a sharp decline on Aug. 19 and is likely to end the week with steep losses.
Will bulls use the dips to accumulate at lower levels? If they do, let’s study the charts of the top-5 cryptocurrencies that may attract buyers because of their bullish setups.
BTC/USDT
Bitcoin slipped below the 20-day exponential moving average ($22,864) on Aug. 17 and then below the 50-day simple moving average ($22,318) on Aug. 19. The bulls are attempting to arrest the decline at the support line of the ascending channel.
The 20-day EMA has started to turn down and the relative strength index (RSI) is in negative territory, indicating advantage to bears. If the price reverses direction from the moving averages, it will suggest that bears are selling on rallies.
That could increase the possibility of a break below the support line of the channel. If that happens, the crucial support zone of $18,626 to $17,622 may come under attack.
To avoid this situation, the bulls will have to push and sustain the price above the moving averages. If they do that, the BNB/USDT pair could rise toward the resistance line of the channel.
The buyers are aggressively defending the support line of the channel but the downsloping moving averages and the RSI in the negative territory suggest that higher levels are likely to attract selling by the bears.
If the price turns down from the current level or the 20-EMA, the likelihood of a break below the channel increases. If that happens, the bearish momentum could pick up and the pair could drop toward $18,626.
The first sign of strength will be a break above the 20-EMA. Such a move will indicate that the selling pressure may be reducing. That could improve…
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