Bitcoin Recovers $28k, Charts Show ARB, XRP, EOS, AAVE May Follow

The United States is looking to avoid a catastrophic debt default after the White House and House Republicans agreed to a preliminary deal on May 27. US stock markets rallied in anticipation of the May 26 deal and the positive sentiment carried over into the cryptocurrency sector which is trying to recover.

Buying is not limited to Bitcoin (BTC) alone, as select altcoins are also showing signs of a short-term rally. With that said, sustaining the rally at higher levels can be challenging for the bulls.

After the debt ceiling agreement, traders are likely to focus their attention on a rate hike by the Federal Reserve. Hot PCE data on May 26 increased the possibility of a rate hike at the Fed’s June meeting. The probability of a 25 basis point rate hike rose from 17% weekly to 64% on May 28, according to CME FedWatch. a tool.

Besides Bitcoin, which altcoins look ripe for a short-term bullish move? Let’s study the charts of the top five cryptocurrencies to identify the important levels to watch out for.

Bitcoin price analysis

Bitcoin has reached the upper resistance area between the 20-day exponential moving average ($27,146) and the support line of the symmetrical triangle. This area is likely to witness a strong struggle between bulls and bears.

If the price drops from the upper area, the bears will make another attempt to take the price to the pivot support level at $25,250. The bulls are expected to defend the area between $25,250 and $24,000 with all their might as a break below could intensify selling. The BTC/USDT pair could then drop to $20,000.

Conversely, if the buyers overcome the overhead hurdle and push the price back into the triangle, that would indicate strong buying on dips. This increases the probability of a breakout above the resistance line of the triangle. After that, the pair may rise to $31,000.

The 4-hour chart shows that the pair is trading inside a descending channel pattern and that the bears are trying to defend the resistance line. If the price declines from the current level but bounces off the 20-EMA, that would indicate that dips are being bought.

The bulls will again try to push the price above the channel. If they succeed, the pair may start an upward movement to $28,400.

On the contrary, a breakout below the moving averages will indicate that the pair may extend its stay within the channel for some time.

XRP price analysis

XRP (XRP) has formed an inverted head and shoulders pattern, which will be completed on a breakout and close above the neckline.

The 20-day moving average ($0.45) is gradually sloped upwards and the RSI jumped into positive territory, indicating that the path of least resistance is to the upside. If the bulls move and hold the price above the neckline, the XRP/USDT pair may start a rally towards the upper resistance area between $0.54 and $0.58. The pattern target for the bullish setup is $0.55.

This positive near-term outlook will be invalidated if the price breaks from the neckline and falls below the 20-day moving average. The pair could then drop to the important support near $0.40.

The 4-hour chart is showing that the pair is witnessing a tough battle between the bulls and the bears near the neckline. A rising 20-EMA and the RSI in positive territory indicate a minor advantage for the buyers.

If the price bounces off the 20-EMA, it will increase the possibility of a break above $0.48. If this happens, the pair is likely to start an upward movement. Alternatively, if the price falls and breaks below the moving averages, it will tilt the short-term advantage in favor of the bears. After that, the pair may drop to $0.44.

Arbitrum price analysis

The bulls pushed the Arbitrum (ARB) back above the 20-day moving average ($1.17) on May 28, signaling the beginning of a possible recovery.

The bears are likely to strongly challenge $1.20, but if the bulls break this level, ARB/USDT could gain momentum. Slight resistance is at the 50 day simple moving average ($1.29) but it is likely to be crossed. The pair may then rise to $1.36 and later to $1.50.

If the bulls want to prevent a rally, they will have to quickly pull the price below the 20-day moving average. If they manage to do so, the pair could drop to $1.06 and then to $1.01. This is an important area for the bulls to defend because if it breaks, the pair could see a sharp drop to $0.73.

The 4 hour chart is showing that the bulls pushed the price above the resistance line of the symmetrical triangle pattern. The bears are trying to stop the upward move at $1.20, but if the bulls don’t allow the price to re-enter the triangle, it will boost the odds of a bullish breakout. The pattern target from the setup is $1.43.

On the contrary, if the price falls and returns to the triangle, it will indicate that the recent breakout may have been a bull trap. The bears will then try to plunge the price back towards the triangle support line.

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EOS token price analysis

Eos (EOS) has fluctuated between $0.78 and $1.34 over the past several months. Generally, in such a large range, traders buy near support and sell near resistance.

The EOS/USDT pair rebounded from $0.81 on May 25 and rose above the 20-day moving average ($0.89) on May 28. This is the first indication that the range is still intact. The bulls will try to push the price to the 50 day simple moving average ($1) where the bears are likely to put up a strong defense.

If the next decline finds support at the 20 day EMA, it would indicate that the bulls are on top. After that, the pair may rise to $1.11. The bears would have to push the price below the vital support at $0.78 to signal the start of a downtrend.

The attempted recovery is selling near the overhead resistance at $0.93 but the bulls haven’t given up much ground. The moving averages have completed a bullish crossover and the RSI is near the overbought zone, indicating that the bulls have the upper hand.

If buyers push the price above $0.93, the pair could gain momentum and rise towards the psychological level at $1 and later to $1.11. This positive view may be invalidated in the near term if the price declines and breaks below the moving averages.

Aave price analysis

Aave (AAVE) is declining within a bearish channel pattern, which generally behaves as a bullish setup.

After struggling near the 20-day moving average ($65.50) over the past few days, the bulls pushed the price above resistance on May 27. This indicates the beginning of a possible rally.

AAVE/USDT could first rise to the 50-day SMA ($70) and after that try to rise to the resistance line. A break and close above this level could start a short-term bullish move.

Contrary to this assumption, if the price breaks below the current level and breaks below the 20-day moving average, it will indicate that demand is drying up at higher levels. The next support on the downside is at $62.

The 4-hour chart shows the formation of an ascending triangle pattern, which will be completed upon the breach and closing above $67.40. The pair could then start an upward movement towards the pattern target at $74.

Alternatively, if the price breaks below the current level, it would indicate that the bears are aggressively protecting the $67.4 level. If the price slips below the moving averages, this will indicate that the pair may remain inside the triangle for some time. A break below the triangle will negate the positive setup, tilting the advantage in favor of the bears.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.

This article is for general information purposes and is not intended and should not be considered legal or investment advice. The views, ideas and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.