Following the tentative deal between the White House and House Republicans on the US debt ceiling, the cryptocurrency sector has been showing signs of a short-term recovery. The positive sentiment from the US equities markets has also rubbed off on cryptocurrencies.
Although buying has not been limited to Bitcoin (BTC), select altcoins are also showing signs of a short-term up-move. However, it may prove difficult for the bulls to sustain the rally at higher levels.
Traders Prepare for Federal Reserve Rate Hikes
As traders shift their focus to the Federal Reserve’s rate hikes, the hot Personal Consumption Expenditures data on May 26 has increased the likelihood of a rate hike at the Fed’s June meeting. According to the CME FedWatch Tool, the probability of a 25 basis point rate hike has risen from 17% a week back to 64% on May 28.
Top Five Cryptocurrencies to Watch Out For
Bitcoin (BTC), XRP (XRP), Arbitrum (ARB), Eos (EOS), and Aave (AAVE) are the top five cryptocurrencies to watch for a short-term up-move.
Bitcoin has reached the overhead resistance zone, where it is likely to witness a solid tussle between the bulls and the bears. The bears may make another attempt to yank the price to the pivotal support at $25,250, while the bulls will try to defend the zone between $25,250 and $24,000. A break below this zone could intensify selling, causing the BTC/USDT pair to tumble to $20,000. If buyers overcome the overhead obstacle and push the price back into the triangle, it will suggest strong buying on dips, increasing the possibility of a break above the resistance line of the triangle, and the pair may soar to $31,000.
XRP has formed an inverse head and shoulders pattern, which will complete on a break and close above the neckline. The path of least resistance is to the upside, and if bulls drive and sustain the price above the neckline, the XRP/USDT pair could start a rally to the overhead resistance zone between $0.54 and $0.58. The pattern target of the bullish setup is $0.55.
Arbitrum has the potential to pick up momentum if bulls pierce the minor resistance at the 50-day simple moving average. The ARB/USDT pair may climb to $1.36 and later to $1.50. If bulls fail to pull the price back below the 20-day EMA, the pair may start an up-move, with the pattern target of the setup being $1.43.
Eos has been oscillating between $0.78 and $1.34 for the past several months. The EOS/USDT pair bounced off $0.81 on May 25 and rose above the 20-day EMA on May 28. If the next dip finds support at the 20-day EMA, the pair could rise to $1.11.
Aave has been falling inside a descending channel pattern, which generally behaves as a bullish setup. The AAVE/USDT pair could first rise to the 50-day SMA and thereafter attempt a rally to the resistance line.
The cryptocurrency market has been showing signs of recovery post the US debt deal. Traders are now preparing for the Federal Reserve’s rate hikes, with the probability of a 25 basis point rate hike rising to 64% on May 28. The top five cryptocurrencies to watch out for a short-term up-move are Bitcoin, XRP, Arbitrum, Eos, and Aave. Although there are potential bullish setups for these cryptocurrencies, it may prove difficult for the bulls to sustain the rally at higher levels.