Bitcoin’s current market consolidation phase at the upper end of its trading range has instilled confidence among traders, increasing interest in various alternative cryptocurrencies.
On Oct. 3, the yields of the United States 10-year Treasury bonds surged above 4.8%, marking their highest level since 2007. Jeffrey Gundlach, the CEO of DoubleLine Capital, expressed his concern in a recent post on X (formerly Twitter), noting that the spread between the 2-year and 10-year Treasury yields has significantly narrowed from 109 basis points a few months ago to just 35 basis points. He issued a cautionary statement, suggesting that this narrowing yield curve “should serve as a warning sign for a potential recession.”
The US Treasury yield curve is de-inverting very rapidly. Was at -108 bp a few months ago. Now at -35 bp. Should put everyone on recession warning, not just recession watch. If the unemployment rate ticks up just a couple of tenths it will be recession alert. Buckle up.
In a related thread on X, Arthur Hayes, the former CEO of BitMEX, expressed his apprehension about the government’s potential need for money printing to stabilize the bond market. He pointed out the possibility of a faster bear steepener, a scenario in which long-term interest rates increase more rapidly than short-term rates. Hayes argued that Such a situation could lead to various firms’ collapse. Some investors speculate that these economic dynamics could trigger a bull market in cryptocurrencies.
The faster this bear steepener rises, the faster someone goes belly up, the faster everyone recognises there is no way out other than money printing to save govt bond markets, the faster we get back to the crypto bull market :). The Lord is my Shepherd, I shall not want.
It also looks like institutional investors have started to warm up to cryptocurrencies. CoinShares’ latest Digital Asset Fund Flows Weekly Report shows inflows of $21 million into digital asset investment products for the first time in six weeks.
Let’s look at the charts in this uncertain macro environment to determine the next potential move.
Bitcoin (BTC) Market Analysis
Bitcoin rose above $28,143 on Oct. 2, but the long wick on the candlestick shows the bears are aggressively selling at higher levels. The bears tried to build upon their advantage on Oct. 3, but the bulls held their ground at $27,160.
BTC/USDT daily chart. Source: TradingView
The upsloping 20-day exponential moving average ($26,903) and the relative strength index (RSI) in the positive territory indicate that bulls have the upper hand. Buyers will once again try to clear the overhead resistance at $28,143.
A close above this level will complete a short-term double-bottom pattern with a target objective of $31,486.
This optimistic view will be invalidated if the price again turns down from the overhead resistance and plummets below the 20-day EMA. That could yank the price to $26,000. The BTC/USDT pair could continue consolidating between $24,800 and $28,143 for a while longer.
Ether (ETH) Market Analysis
Ether turned down sharply from the overhead resistance of $1,746 on Oct. 2, indicating that the bears are fiercely guarding this level.
ETH/USDT daily chart. Source: TradingView
The 20-day EMA ($1,640) is flattening out, and the RSI is near the midpoint, indicating a balance between supply and demand. If the price rises from the current level, the bulls will again try to overcome the obstacle at $1,746. If they can pull it off, the ETH/USDT pair will complete a double bottom pattern, having a target objective of $1,961.
On the other hand, if the price continues lower and tumbles below the moving averages, it will suggest that the pair may extend its stay inside the $1,531 to $1,746 range for some more time.
BNB Market Analysis
BNB jumped above the $220 resistance on Oct. 2, but the bulls could not sustain the breakout, as seen from the long wick on the day’s candlestick.
BNB/USDT daily chart. Source: TradingView
The failure of the bulls to maintain the price above the 20-day EMA ($214) is a negative sign. It shows that traders are rushing to the exit. The BNB/USDT pair could next fall to the uptrend line.
If the price rebounds off this level, the bulls will try to push the pair above $220 again. A close above this resistance could signal the start of an up-move to $235 and, after that, to $250. Instead, if the price breaks below the uptrend line, the pair may decline to the formidable support at $203.
XRP price analysis
Buyers pushed XRP above the symmetrical triangle pattern on Sep. 29 and then foiled several attempts by the bears to pull the price back into the triangle.
XRP/USDT daily chart. Source: TradingView
The bulls will next try to surmount the overhead resistance at $0.56. If they are successful, it will signal the start of a new uptrend. The XRP/USDT pair could start its journey toward the pattern at $0.66.
Conversely, if the price turns down from $0.56 and dives below the uptrend line, it will suggest that the bulls are booking profits. That could keep the pair range-bound between $0.56 and $0.41 for a few more days.
Solana (SOL) price analysis
Solana oscillates inside an extensive range between $14 and $27.12. The price action of the past few days has resulted in the formation of a potential inverse head and shoulders pattern.
SOL/USDT daily chart. Source: TradingView
Although setups formed inside a range tend to be less reliable, they should not be neglected. If the price rises and breaks above the neckline, the SOL/USDT pair could rally to $27.12, eventually to the pattern target of $32.81.
The critical support to watch on the downside is the 20-day EMA ($20.95). If the price slides below this level, it will suggest that the bulls have given up. That could open the gates for a possible drop to $17.33.
Cardano (ADA) price analysis
Cardano turned down from $0.27 on Oct. 2 and reached the 20-day EMA ($0.25) on Oct. 4. This is a critical level to keep an eye on in the near term.
ADA/USDT daily chart. Source: TradingView
If the price rebounds off the 20-day EMA, it will indicate a change in sentiment from selling on rallies to buying on dips. The bulls will then try to shove the price above $0.27 and start an up-move to $0.29 and later to $0.32.
Bears must drag the price below the 20-day EMA if they want to prevent the rally. The ADA/USDT pair may again descend to the vital support at $0.24. The bulls are likely to protect this level with vigour.
Dogecoin (DOGE) price analysis
The bulls pushed Dogecoin above the 50-day SMA ($0.06) on Oct. 2 but could not sustain the higher levels. This suggests that bears are selling on every minor relief rally.
DOGE/USDT daily chart. Source: TradingView
The DOGE/USDT pair has reached formidable support at $0.06. The repeated retest of a support level within a short interval tends to weaken it. If the $0.06 level cracks, the pair may slump to the next significant support at $0.055.
A minor advantage in favour of the buyers is that the RSI has formed a bullish divergence. This suggests the bears may be losing their grip. The indicators are not providing clarity about the next move. Hence, waiting for the price to close above the 50-day SMA or plunge below $0.06 to place directional bets is best.
Toncoin (TON) price analysis
Toncoin fell below the 20-day EMA ($2.09) on Sep. 30, and the bears thwarted attempts by the bulls to reclaim the level on Oct. 1.
TON/USDT daily chart. Source: TradingView
The bears try solidifying their position by sinking the price to the 50-day SMA ($1.86). This level may result in a rebound that will likely face selling at the 20-day EMA.
If the price turns down from this resistance, it will suggest that the sentiment has turned bearish and traders are selling on rallies. That will increase the likelihood of a drop below the 50-day SMA.
On the contrary, if the price turns up and surges above the 20-day EMA, it will suggest that the markets have rejected the lower levels. The TON/USDT pair could then rise to $2.32, where the bears will again try to halt the up-move.
Polkadot (DOT) price analysis
Polkadot turned down sharply from the 50-day SMA ($4.24) on Oct. 2 and broke below the 20-day EMA ($4.10) on Oct. 3.
DOT/USDT daily chart. Source: TradingView
The bears challenged the critical support at $3.91 on Oct. 4, but the long tail on the candlestick shows strong buying at lower levels. The RSI has formed a bullish divergence, indicating that the sellers may lose their grip.
If the bulls push the price above the 20-day EMA, it will suggest that the DOT/USDT pair may extend its stay inside the $4.33 to $3.91 range for some more time. The bears will have to sink the price below $3.91 to start the next leg of the downtrend to $3.50.
Polygon (MATIC) price analysis
After witnessing a tough battle between the bulls and the bears near the moving averages, Polygon bounced on Oct. 4, indicating buyers are trying to take charge.
MATIC/USDT daily chart. Source: TradingView
The bulls are trying to build upon the strength and propel the price above the overhead resistance at $0.60. If they manage to do that, it will signal the start of a sustained recovery. The MATIC/USDT pair could then rise to $0.70.
Contrary to this assumption, if the price turns down and breaks below the 20-day EMA, it will indicate that the bears are active at higher levels. The pair may then retest the crucial support at $0.49. This level is likely to attract solid buying by the bulls.
