Bitcoin (BTC) made an attempt to break out of its recent range last week, but ultimately failed to sustain higher levels and has returned to trading near $26,000. The price action over the past few days has formed two successive Doji candlestick patterns on the weekly chart, suggesting uncertainty about the next directional move.
While it’s difficult to predict the direction of the breakout, there is speculation that the downside may be limited in the near term due to expectations that the United States Securities and Exchange Commission (SEC) may eventually approve one or more pending applications for a spot Bitcoin exchange-traded fund. Former commission chair Jay Clayton expressed confidence in a recent interview that “an approval is inevitable.”
The lack of clarity surrounding Bitcoin’s next move has kept most major altcoins under pressure, with only a few showing signs of strength in the short term. Let’s take a closer look at the charts of the top-five cryptocurrencies that may start a rally if they break above their respective overhead resistance levels.
Bitcoin is currently trading within the range of $24,800 to $26,833. Although the downsloping moving averages indicate an advantage for bears, the gradually recovering relative strength index (RSI) suggests that bearish momentum may be weakening. A break and close above the range at $26,833 could lead to a retest of the Aug. 29 intraday high of $28,142. On the other hand, if the bears manage to sink the price below $24,800, the pair could potentially plunge to $20,000.
Toncoin (TON) is in an uptrend but facing resistance near the overhead level of $2.07. Both moving averages have turned up, indicating an advantage for buyers. However, overbought levels on the RSI suggest that a minor correction or consolidation is possible. A rally above $2.07 could lead to a surge toward $2.40, but a deeper correction may pull the price to the 20-day EMA ($1.61).
Chainlink (LINK) has been trading within a range of $5.50 and $9.50 for several months. The recent drop close to the range support on Aug. 17 was quickly bought up by bulls, indicating strong demand. Buyers are currently facing resistance near the 20-day EMA ($6.23), which will be an important level to watch. A break above this level could signal a journey toward the 50-day SMA ($6.94), while a sharp downturn may pull the price down to $5.50.
Maker (MKR) has found support near $1,000, but the bulls are struggling to overcome bearish resistance near the downtrend line. A close above the downtrend line and $1,227 could indicate a resumption of positive momentum, with a potential rally toward $1,370. However, a sustained move below the 20-day EMA ($1,106) would suggest that bears have the upper hand, potentially leading to a decline to strong support at $980.
Tezos (XTZ) has been battling between bulls and bears near the strong support at $0.70. While the downsloping moving averages favor bears, the rising RSI suggests that bearish momentum is decreasing. A close above the 20-day EMA ($0.71) would be a positive sign and could pave the way for a rally to the downtrend line, potentially reaching $0.94 and $1.04. However, if the price sustains below $0.66, the positive view would be invalidated.
In conclusion, Bitcoin’s next breakout direction remains uncertain, but there are expectations that the downside may be limited in the near term due to potential SEC approval of Bitcoin exchange-traded funds. Several altcoins are showing signs of strength and may rally if they break above their respective resistance levels. Traders will need to closely monitor these levels and other technical indicators to determine the potential future direction of the market.