Similar to last week, this article will be going over cryptocurrencies to watch this week (BTC, ETH, XRP, and LTC). Impacting the crypto market, of course, is the Federal Reserve. Jerome H. Powell, the Federal Reserve chair, signaled last Thursday that the central bank will continue raising interest rates and do everything in its power to fight rising inflation, stating: “The longer inflation remains well above target, the greater the risk that the public sees higher inflation as the norm.”
“History cautions strongly against prematurely loosening policy,” added Powell.
This was Powell’s last public speech before the next interest rate decision by the Federal bank on September 20-21. As of now, most analysts believe the FED will increase rates by another 75 basis points (0.75%).
However, despite this message being Hawkish (which is negative for the equity and crypto markets), both stocks and cryptocurrencies reacted with a strong move to the upside.
The flagship crypto increased by around 10% in the last seven days, where the majority of the move was made on Friday. As previously mentioned in the last “market breakdown,” the bulls managed to hold the price above the yearly lows of June 18, at around $17,500, and as the sellers were swept away, bitcoin rallied higher. At writing, it’s trading at around $21,600.
On the one hand, if this bullish momentum continues, bitcoin is expected to test its next major resistance area (where sellers previously came in and pushed the price down lower) at around $25,000. On the other hand, if this bullish momentum reverses again and sellers regain control, the major support area for bitcoin (where buyers previously stepped into the market and pushed the price up higher) remains at around $19,000.
Ethereum, the second-largest cryptocurrency by market cap, had a slightly stronger move than bitcoin, rallying 10.7% in the last seven days to break above the strong resistance at $1,700.
This level has been a strong resistance over the past few weeks, so the fact that buyers were able to break and close above this level should be noted by traders. With the long-awaited “merge” just around the corner, traders must keep a close eye on the price.
In case the major level of $1,700 holds, Ethereum can continue its bullish run and try to take the next major resistance level at $2,000. However, if something goes wrong with the merge or if the entire crypto market reverses to the downside, the next support level to watch for is $1,500.
Another week has passed by, and there is still no verdict for the ongoing Ripple vs. SEC trial despite XRP enjoying the general wave of optimism in the crypto market. The cryptocurrency rose by about 6.4% in the last week and reclaimed its seventh position by market cap after briefly losing it to Cardano.
At writing, XRP is trading at around $0.35, a very significant level for the token, where traders can clearly see that that level acted both as support and as a resistance in the last few months.
As of now, traders need to be aware of how this level holds up. If the entire crypto market continues its bullish momentum, XRP will be on its way to the next major resistance level at around $0.40. However, with the trial still underway and the crypto market still in a bearish setup, XRP has the possibility to drop all the way back down to its previous support area at around $0.27.
Litecoin increased by about only 1% in the past week. At writing, the cryptocurrency is trading at around $60.75. That’s an impressive ~50% increase from June 14 low.
If the bullish momentum continues, LTC could visit its next resistance level at around $80. However, if the current level at ~$61 – $62 area fails (which may already be happening), LTC may visit its next support at around $50.
Conclusion: A Nice Rally, but the Trend Remains Unchanged
Despite last week’s rally bringing some light and hope back to the buyers, traders should be aware that the main trend remains bearish, as prices have yet to sustain themselves higher on the charts.
For now, as I previously mentioned in last week’s review, I’m still looking for every push higher to sell in profit and wait for the price to come down into major support areas before adding to my positions.
Remember, the FED meeting will be taking place on September 22. After that, we should see much clearer movements in the markets.