TON, TWT, CHZ and QNT breakout amid traders’ crypto contagion fears

FTX’s collapse continues to fuel fears of contagion in the cryptocurrency space as investors wait to hear about businesses that may face heat. One of the marquee names under suspicion is Grayscale Bitcoin Trust (GBTC), which has seen its discount to Bitcoin’s (BTC) the price reached a record level of about 50%.

Traders hate uncertainty and shy away from investing during this period. That could be one of the reasons for the lack of interest in buying Bitcoin even after a sharp fall in its price. The Stock-to-Flow (S2F) model, which has seen its popularity rise during the bull phase, is coming under increasing criticism after deviation between the price of Bitcoin and its projected price Hit levels never seen before.

Does this show that pessimism has gone to extremes or is it just a flawed S2F model?

Crypto market data view daily. Source: coin360

During the bear phase, the general trend is down but there are always pockets of strength that can offer trading opportunities to long-term investors only. However, rallies during bear markets are short-lived, so traders can consider booking profits near strong resistance levels.

Let’s take a look at the chart of five cryptocurrencies that may try to rally in the near term.

BTC/USDT

Bitcoin continues to trade within a tight range between $16,229 and $17,190. In general, periods of tight consolidation are followed by increased volatility.

BTC/USDT daily chart. Source: TradingView

The downsloping moving averages and the relative strength index (RSI) in the negative zone indicate that the path of least resistance to the downside. If the price breaks below $16,229, the November 9 intraday low of $15,588 may be threatened. A break and close below this support can signal the resumption of downtrend. The next support on the downside is $12,200.

If the bulls want to avoid further decline, they need to push and support the price above the breakdown level of $17,622. Such a move would suggest strong demand at lower rates. The pair can then rise to the psychological level of $20,000.

BTC/USDT 4-hour chart. Source: TradingView

The BTC/USDT pair has been trading near moving averages, which have flattened out. This indicates that the pair has entered a state of equilibrium as both buyers and sellers are undecided about the next move.

However, this uncertainty is likely to continue for a long time. If the price plummets below $16,229, selling pressure can pick up momentum and the pair can drop to $15,588. If this support gives way, the pair may start the next leg of the downtrend.

Conversely, if the price rises and breaks above $17,190, it will suggest that the current tight range is used by bulls to gather. The pair can then rally to $18,200 and later to $18,730.

TON/USDT

Toncoin (TON) has recovered sharply from the June low and managed to hold on to a large part of the gains. This shows that traders are not in a hurry to dump their positions at higher levels.

TON/USDT daily chart. Source: TradingView

The TON/USDT pair has formed a symmetrical triangle, which usually acts as a continuation pattern. Both moving averages are slowly sloping up and RSI is in positive territory, indicating a slight advantage to bulls.

If the price rebounds off the 20-day exponential moving average ($1.65), the bulls will try to drive the price above the triangle. If they can pull it off, the pair could rally to $2.15 and climb towards the $2.87 target.

Alternatively, if the price slips below the 20-day EMA, the pair can drop to the 50-day moving average ($1.50) and then to the support line.

TON/USDT 4-hour chart. Source: TradingView

This pair faces stiff resistance at $1.80. A sustained failure to support prices above this level could tempt short-term traders to book profits. The bears try to capitalize on this situation and sink the price below the 50-SMA. If this support is cracked, the pair could dive to $1.55.

On the contrary, if the price rebounds out of the current level, the bulls will again try to scale the wall at $1.80. Reexamination of the resistance level tends to weaken it. A close above this resistance could open the door for a possible rally to $2.

CHZ/USDT

Chiliz (CHZ) is trying to form an inverted head and shoulders pattern, which will end at the break and close above the waist line. If that happens, it could indicate the beginning of a new uptrend.

CHZ/USDT daily chart. Source: TradingView

The target of the reversal pattern is $0.54 but the bears are unlikely to give up easily. They are aggressively defending the neckline. If the price breaks below the 50-day SMA ($0.21), the CHZ / USDT pair can drop to $0.18 and then to $0.14.

Alternatively, if the price bounces off the current level, buyers will try to propel the pair above the neckline and gain control.

The flattening of the moving average and the RSI just below the midpoint does not give a clear advantage to either the bulls or the bears. Therefore, it is better to wait for the breakout price before establishing a fresh position.

CHZ/USDT 4-hour chart. Source: TradingView

The pair turned down sharply from $0.27 and the bear has pulled the price below the moving averages. If the price sustains below the 50-SMA, the pair can drop to $0.20. That can put a bear in the driver’s seat.

On the other hand, if the price rises from the current level and rises above the 20-EMA, it will indicate that the trader sees the dips as a buying opportunity. The pair can then rise to $0.26 and later to $0.28. Buyers should run the price above this level to challenge the resistance at $0.30.

Related: FTX funds on the move as thieves convert thousands of ETH to Bitcoin

QNT/USDT billion

Although Quant (QNT) has corrected sharply in the past few days, it is trying to take support and bounce off the support line. This shows demand at a lower level.

QNT/USDT daily chart. Source: TradingView

The downsloping 20-day EMA ($128) indicates superiority to the bears but the RSI is trying to form a positive divergence. This suggests that selling pressure may be easing.

Buyers should push and support the price above the 20-day EMA to indicate that the correction phase may be over. The QNT/USDT pair can then rise to the 50-day SMA ($151) and then to $180.

This positive view may be canceled in the near future if the price continues lower and breaks below the uptrend line. The pair could then drop to $87 and later to $79.

QNT/USDT 4-hour chart. Source: TradingView

The recovery in this pair is facing selling near the downtrend line. This indicates that the bear is active at a higher level. The bears have pulled the price below the moving average and will try to extend the decline to $105 and then to $94.

To cancel this negative view, the bulls need to kick in and support the price above the downtrend line. The pair can then rise to $125 where the bear can mount a strong defense. If the buyer overcomes this obstacle, the up-move can reach $136.

TWT/USDT

While most major cryptocurrencies extended their downtrend in the past few days, Trust Wallet Token (TWT) has moved in the opposite direction and risen sharply. This indicates outperformance in the near term.

TWT/USDT daily chart. Source: TradingView

The TWT/USDT pair soared from $1.03 on Nov 10 to $2.73 on Nov 14, a 165% rally in a short period of time. That pushed the RSI deep into overbought territory, suggesting a minor correction or consolidation in the near term and that’s what happened.

This pair finds support near the 50% Fibonacci retracement level of $1.88 but the bulls are struggling to push the price above $2.45. This suggests that the pair could consolidate between $1.81 and $2.45 over several days.

Both moving averages sloping up and RSI remain in the positive area, indicating that the bulls have an advantage. If the buyer drives the price above the resistance zone of $2.45 to $2.73, the pair can continue its uptrend. This positive view may cancel out during a break and close below the 20-day EMA ($1.70).

TWT/USDT 4-hour chart. Source: TradingView

Bears are pulling prices below the 50-SMA but they are struggling to keep the pair down. This indicates strong buying at lower levels. If the buyer pushes the price above the 20-EMA, the pair can rise to the downtrend line.

A break above this level can clear the path for a possible rally to $2.45. This remains a key obstacle for the bulls to overcome. If they succeed in breaking it, the pair can retest $2.73.

On the downside, a slide below $1.92 could result in a drop to $1.81. This is an important level to keep an eye on because a break below can tilt the advantage in favor of the bears.