The Aug. 10 Consumer Price Index (CPI) report shows year-over-year inflation rose 8.5% in July and while this figure is below economists’ expectations of 8.7%, it is still high. Although inflation remains much higher than the Federal Reserve’s 2% target, the marginal slowdown raises hopes that the rate hikes by the Federal Reserve have started to work. That has reduced the probability of a 75 basis point rate hike in the September meeting from 68% on Aug. 9 to 37.5%, according to CME group data.
Risky assets, including the cryptocurrency markets, responded positively to the CPI print. Compared to Bitcoin (BTC), the altcoins are enjoying a stronger rally. This has pulled Bitcoin’s dominance near its yearly lows while Ether (ETH) has climbed near its yearly high.
Daily cryptocurrency market performance. Source: Coin360
According to CoinShares data, Ether-related products have seen inflows of $159 million in the past seven weeks. This indicates that Ether seems to be garnering attention from institutional investors in anticipation of the Merge, which is scheduled for Sept. 19.
Could Bitcoin and altcoins sustain the higher levels? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin turned down from $24,245 on Aug. 8 and dropped to the 20-day exponential moving average (EMA) ($22,966) on Aug. 9. The bulls aggressively purchased the dip on Aug. 10 and are attempting to push the price above the overhead resistance at $24,668.
BTC/USDT daily chart. Source: TradingView
If they succeed, the BTC/USDT pair could pick up momentum and rally to $28,000. The bears may mount a strong resistance at this level but if bulls overcome this barrier, the pair could rise to $32,000. The gradually upsloping 20-day EMA and the relative strength index (RSI) in the positive territory indicate the path of least resistance is to the upside.
Conversely, if the price turns down from $24,668, the bears will again attempt to sink the pair below the 20-day EMA. If they manage to do that, the pair could decline to the 50-day simple moving average (SMA ($21,708). A break below this level could tilt the advantage in favor of the bears.
Ether turned down from $1,818 on Aug. 8 but the bears could not sink the price below the 20-day EMA ($1,637). This suggests strong demand at lower levels.
ETH/USDT daily chart. Source: TradingView
The ETH/USDT pair rebounded off the 20-day EMA on Aug. 10 and has cleared the overhead hurdle at $1,818. If buyers sustain the price above this level, the pair could rally to the psychological level of $2,000 and then to $2,200. The rising moving averages and the RSI in the positive territory indicate that bulls have the upper hand.
This bullish view will be invalidated if the price turns down and plummets below the 20-day EMA. If that happens, the pair may drop toward the 50-day SMA ($1,388). That could delay the start of the next leg of the up-move.
BNB turned down from the overhead resistance zone of $338 to $350 on Aug. 8 but the bears could not sustain the lower levels on Aug. 10. This suggests that bulls are aggressively buying the dips.
BNB/USDT daily chart. Source: TradingView
The bulls will again attempt to clear the overhead zone. If they succeed, the BNB/USDT pair could pick up momentum and rally toward $414. Although the rising moving averages indicate advantage to buyers, the overbought zone on the RSI indicates that a minor pullback or a consolidation is possible in the near term.
If the price turns down from the overhead zone, the first support is at $308. The bears will have to sink the price below this level to challenge the 20-day EMA ($296). This is an important level to keep an eye on because a break and close below it could sink the pair to $275.
The bulls failed to push XRP above the overhead resistance at $0.39 on Aug. 8. This attracted sharp selling by the bears who pulled the price below the 20-day EMA ($0.37) on Aug. 9.
XRP/USDT daily chart. Source: TradingView
A minor positive is that the bulls bought the dip and have pushed the price back above the 20-day EMA on Aug. 10. The buyers will again attempt to push the price above the overhead resistance zone between $0.39 and $0.41. If they succeed, the XRP/USDT pair could rise to $0.48 and later to $0.54.
Contrary to this assumption, if the price turns down from the overhead resistance and breaks below the 50-day SMA ($0.35), it will suggest that the pair may remain range-bound between $0.30 and $0.39 for a few more days.
Cardano (ADA) turned down from the overhead resistance at $0.55 on Aug. 8 and dropped to the 20-day EMA ($0.51) on Aug. 9, indicating that bears continue to defend the overhead resistance aggressively.
ADA/USDT daily chart. Source: TradingView
The ADA/USDT pair rebounded sharply off the 20-day EMA on Aug. 10, suggesting that the bulls are buying the dips with vigor. If buyers clear the overhead hurdle, the pair could start its northward march to $0.63 and then to $0.70.
Contrary to this assumption, if the price once again turns down from $0.55, the likelihood of a break below the 20-day EMA increases. If that happens, the pair could remain range-bound between $0.45 and $0.55 for a few more days.
The bulls tried to push Solana (SOL) to the overhead resistance at $48 on Aug. 8 but the bears had other plans. They stalled the recovery attempt at $44 and pulled the price back below the 20-day EMA ($40) on Aug. 9.
SOL/USDT daily chart. Source: TradingView
Both moving averages have flattened out and the RSI is just above the midpoint, indicating a balance between supply and demand. If the price rises from the current level and breaks above $44, the SOL/USDT pair could challenge the stiff resistance at $48.
A break above this level will complete a bullish ascending triangle pattern, opening the doors for a possible rally to $60 and then to the pattern target at $71.
Conversely, if the price turns down from the current level and breaks below the support line, the advantage could tilt in favor of the bears. The pair could then drop to $32.
The long wick on Dogecoin’s (DOGE) Aug. 9 candlestick shows that the bears are aggressively defending the overhead resistance at $0.08. The sellers are attempting to build upon their advantage by pulling the price below the moving averages.
DOGE/USDT daily chart. Source: TradingView
If they succeed, the DOGE/USDT pair could drop to the trendline of the ascending triangle pattern. A break and close below this support could invalidate the bullish setup. The pair could then decline to $0.06.
Conversely, if the price turns up from the current level, it will suggest that bulls continue to buy on dips. The bulls will then make one more attempt to push the pair above the overhead resistance and start a new up-move. If they succeed, the pair could rally to $0.10.
Related: TORN price sinks 45% after U.S. Treasury sanctions Tornado Cash — Rebound ahead?
Polkadot (DOT) broke and closed above the overhead resistance at $9 on Aug. 8 but the bulls could not build upon this strength. The bears sold aggressively and pulled the price back below $9 on Aug. 9.
DOT/USDT daily chart. Source: TradingView
However, a positive sign is that the DOT/USDT pair rebounded sharply off the 20-day EMA ($8.30). This indicates that the sentiment has turned positive and traders are buying on dips. The bulls will attempt to push the price to $10.80 and later to $12.
To invalidate this view, the bears will have to pull the price back below the 20-day EMA. Such a move will suggest that higher levels continue to attract strong selling by the bears. That could result in a range-bound action for a few days.
The bulls have successfully sustained Polygon (MATIC) above the 20-day EMA ($0.87) but have failed to challenge the overhead resistance at $1.02. This suggests a lack of demand at higher levels.
MATIC/USDT daily chart. Source: TradingView
The gradually rising 20-day EMA and the RSI in the positive territory, indicate that bulls have the upper hand. If buyers push the price above $0.95, the MATIC/USDT pair could rally to the overhead resistance at $1.02. This is an important level for the bears to defend because a break above it could result in a rally to $1.26 and then $1.50.
Alternatively, if the price turns down from the current level and breaks below the 20-day EMA, it will suggest that the pair may oscillate between $0.75 and $1.02 for some more time.
The long wick on Avalanche’s (AVAX) Aug. 8 candlestick shows that bears have not given up and they continue to sell on rallies. The price slipped back to the breakout level on Aug. 9 but the bulls successfully defended the level on Aug. 10.
AVAX/USDT daily chart. Source: TradingView
If buyers sustain the rebound, the AVAX/USDT pair could break above the overhead resistance at $31. If that happens, the pair could resume its up-move to $33 and later to the pattern target of $39.05.
The key level to watch on the downside is the 20-day EMA ($24.88). If bears sink the price below this support, it will suggest that the breakout above $26.38 may have been a bull trap. The pair could then decline to the support line.
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.