Here’s 5 cryptocurrencies with bullish setups that are on the verge of a breakout

The S&P 500 ended its four-week-long recovery last week after minutes from the Federal Reserve’s July meeting hinted that the central bank’s rate hikes will continue until inflation is under control. Members of the Fed said there was no evidence that inflation pressures appear be easing.

Another dampener was the statement by St. Louis Fed president James Bullard who said that he would support a 75 basis point rate hike in September’s Fed policy meeting. This reduced hopes that the era of aggressive rate hikes may be over.

Weakening sentiment pulled the S&P 500 lower by 1.29% for the week. Continuing its close correlation with the S&P 500, Bitcoin (BTC) also witnessed a sharp decline on Aug. 19 and is likely to end the week with steep losses.

Will bulls use the dips to accumulate at lower levels? If they do, let’s study the charts of the top-5 cryptocurrencies that may attract buyers because of their bullish setups.

BTC/USDT

Bitcoin slipped below the 20-day exponential moving average ($22,864) on Aug. 17 and then below the 50-day simple moving average ($22,318) on Aug. 19. The bulls are attempting to arrest the decline at the support line of the ascending channel.

The 20-day EMA has started to turn down and the relative strength index (RSI) is in negative territory, indicating advantage to bears. If the price reverses direction from the moving averages, it will suggest that bears are selling on rallies.

That could increase the possibility of a break below the support line of the channel. If that happens, the crucial support zone of $18,626 to $17,622 may come under attack.

To avoid this situation, the bulls will have to push and sustain the price above the moving averages. If they do that, the BNB/USDT pair could rise toward the resistance line of the channel.

The buyers are aggressively defending the support line of the channel but the downsloping moving averages and the RSI in the negative territory suggest that higher levels are likely to attract selling by the bears.

If the price turns down from the current level or the 20-EMA, the likelihood of a break below the channel increases. If that happens, the bearish momentum could pick up and the pair could drop toward $18,626.

The first sign of strength will be a break above the 20-EMA. Such a move will indicate that the selling pressure may be reducing. That could improve the prospects of a rally to the 50-SMA.

BNB/USDT

Binance Coin (BNB) turned down from the overhead resistance at $338 but the bulls successfully defended the strong support at $275. This indicates a positive sentiment as the bulls are viewing the dips as a buying opportunity.

The recovery may face resistance at the 20-day EMA ($301). If the price turns down from this level, the bears will again try to sink the BNB/USDT pair below $275. If that happens, it will suggest that the pair may oscillate in a large range between $183 and $338 for some time.

On the contrary, if bulls push the price above the 20-day EMA, the pair could rise to $338. A break and close above this level could complete a bullish head and shoulders pattern. That could start a rally to $413 and then to the pattern target at $493.

The 20-EMA on the 4-hour chart has started to turn up and the RSI is near the midpoint, indicating that the selling pressure may be reducing. If the price sustains above the 20-EMA, the pair could rise to the 50-SMA. A break and close above this resistance could increase the possibility of a rally to $338.

Conversely, if the price turns down and breaks below the 20-EMA, the pair could again drop to the critical support at $275. If this level cracks, the pair will complete a bearish heads and shoulders pattern and drop toward $240.

EOS/USDT

EOS has formed the bullish inverse head and shoulders setup. The buyers pushed the price above the overhead resistance at $1.46 on Aug. 17 but the long wick on the day’s candlestick shows strong selling at higher levels.

The bears pulled the price back below the breakout level of $1.46 on Aug. 19 but the positive sign is that the buyers did not allow the EOS/USDT pair to sustain below the 20-day EMA ($1.32). This indicates that lower levels are attracting buyers.

If bulls sustain the price above $1.46, the positive momentum could pick up and the pair may rally to $1.83. If this resistance is also scaled, the rally could extend to the pattern target of $2.11.

This positive view could invalidate if the price turns down and breaks below $1.24. The pair could then decline to the 50-day SMA ($1.17).

The rally above $1.46 on Aug. 17 pushed the RSI on the 4-hour chart to deeply overbought levels. This may have tempted short-term buyers to book profits, which pulled the price to the strong support at $1.24. The bulls purchased the dip to this level and have again propelled the pair above the overhead hurdle at $1.46.

The pair could now rally to $1.56 and then to the important resistance at $1.83. Alternatively, if the price turns down from the current level and breaks below the moving averages, it will suggest that the pair could remain range-bound for a few days.

Related: 3 reasons why the Bitcoin price bottom is not in

QNT/USDT

The series of higher highs and higher lows suggest that Quant (QNT) is in a short-term uptrend. The bulls purchased the drop to the 50-day SMA ($100) and are attempting to resume the up-move.

If the price sustains above the 20-day EMA ($111), it will suggest that the correction may be over. The QNT/USDT pair could first rise to $124 and then retest the important resistance at $133. If bulls clear this hurdle, the pair could rally to the overhead resistance zone between $154 and $162.

Contrary to this assumption, if the price fails to sustain above the 20-day EMA, it will indicate that traders may be closing their positions on rallies. The bears will have to sink the price below $98 to gain the upper hand and signal the start of a deeper correction to $79.

The pair has been correcting inside a falling wedge pattern. The buyers pushed the price above the resistance line of the pattern but could not sustain the breakout. This suggests that bears are active at higher levels.

If the price sustains below the 50-SMA, the pair could slide to the 20-EMA. This is an important level to watch out for. If the price rebounds off this level, it will suggest that the short-term trend has turned in favor of the buyers.

A break and close above $118 could indicate that the corrective phase may be over. Conversely, if the price slips below the 20-EMA, the pair may drop to $100.

CHZ/USDT

Chiliz (CHZ) soared to $0.23 on Aug. 18 which pushed the RSI deep into the overbought territory. This may have tempted short-term traders to book profits and that pulled the price back below the breakout level of $0.20.

A minor positive is that the bulls are attempting to defend the 20-day EMA ($0.17) and push the price back above $0.20. If they succeed, it will suggest that the sentiment remains positive and traders are buying on dips. That increases the likelihood of a retest of $0.23. If bulls clear this hurdle, the CHZ/USDT pair could pick up momentum and rally to $0.26.

Contrary to this assumption, if the price fails to rise above $0.20, it will suggest that bears are selling on rallies. The bears will be back in the driver’s seat if they sink the pair below the 20-day EMA. The pair could then decline to the 50-day SMA ($0.13).

The bulls are trying to defend the uptrend line but the recovery is facing strong resistance at the moving averages. The moving averages completed a bearish crossover on the 4-hour chart and the RSI is in the negative territory, indicating a minor advantage to sellers.

If the price turns down and breaks below the uptrend line, the selling could intensify and the pair may drop to $0.16 and then to $0.14. Such a move will indicate that the bears remain in control.

Instead, if the price breaks above the moving averages, the bulls will try to push the pair to $0.21 and later challenge the resistance at $0.23.

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.