TON, TWT, CHZ, and QNT erupt amid traders’ fears of cryptocurrency contagion

The FTX crash continues to stoke fears of contagion in the cryptocurrency space as investors wait to hear about companies that could face the heat. One of the main names to fall under suspicion is the Grayscale Bitcoin Trust (GBTC), which has seen its discount on the price of Bitcoin (BTC) hit record highs of around 50%.

Traders hate uncertainty and avoid investing during these times. This could be one of the reasons for the lack of interest in buying Bitcoin even after its price has fallen sharply. The Stock-to-Flow (S2F) model, which had seen its popularity soar during the bull market, comes under increasing criticism after the deviation between the price of Bitcoin and its predicted price reached unprecedented levels.

Does this suggest that pessimism has reached an extreme or is it just that the S2F model is flawed?

Daily view of cryptocurrency market data. Source: Moneta360

During a bear market, the overall trend is down, but there are always pockets of strength that can provide trading opportunities for long-only investors. However, rallies during bear markets are short-lived, so traders might consider booking profits near strong resistance levels.

Let’s take a look at the charts of five cryptocurrencies that could attempt a short-term rally.

BTC/USDT

Bitcoin continues to trade within the tight range of $16,229 to $17,190. Typically, periods of tight consolidation are followed by increased volatility.

BTC/USDT daily chart. Source: TradingView

The declining moving averages and the Relative Strength Index (RSI) in the negative zone indicate that the path of least resistance is to the downside. If the price breaks below $16,229, the Nov 9 intraday low of $15,588 could be threatened. A break and close below this support could signal the resumption of the downtrend. The next support on the downside is $12,200.

If the bulls are to avoid further downside, they will need to push and sustain the price above the breakout level of $17,622. Such a move will suggest strong demand at lower levels. The pair could then rally to the psychological $20,000 level.

BTC/USDT 4-hour chart. Source: TradingView

The BTC/USDT pair traded near the moving averages, which have flattened out. This suggests that the pair has entered an equilibrium state as both buyers and sellers are undecided about the next directional move.

However, this uncertainty is unlikely to continue for long. If the price breaks below $16,229, the selling pressure could increase and the pair could drop to $15,588. If this support were to give way, the pair could enter the next phase of the downtrend.

Conversely, if the price climbs above $17,190, it will suggest that the current tight range is being used by bulls to build up. The pair could then rise to $18,200 and then $18,730.

TON/USD

Toncoin (TON) has rallied sharply from its June low and has managed to hold on to most of the gains. This suggests that traders are in no rush to unload their positions at higher levels.

TON/USDT daily chart. Source: TradingView

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

If the price rebounds from the 20-day EMA ($1.65), the bulls will try to push the price above the triangle. If they manage to pull through, the pair could rise to $2.15 and subsequently rise towards its target target of $2.87.

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

TON/USDT 4-hour chart. Source: TradingView

The pair is facing heavy resistance at $1.80. The repeated failure to sustain the price above this level may have prompted short-term traders to book profits. The bears are trying to capitalize on this situation and drive the price below the 50-SMA. If this support breaks down, the pair can drop to $1.55.

Conversely, if the price rebounds from the current level, the bulls will again try to clear the $1.80 wall. Repeatedly testing a resistance level tends to weaken it. A close above this resistance could open the door for a possible rally to $2.

CHF/USDT

Chiliz (CHZ) is attempting to form a reverse head and shoulders pattern, which will complete on a break and close above the neckline. If that happens, it could signal the start of a new uptrend.

CHZ/USDT daily chart. Source: TradingView

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

Alternatively, if the price rebounds from its current level, the buyers will again attempt to push the pair above the neckline and gain control.

The flattening of the moving averages and the RSI just below the midpoint give neither bulls nor bears a clear edge. Therefore, it is best to wait for the price to break out before establishing new positions.

CHZ/USDT 4-hour chart. Source: TradingView

The pair fell sharply from $0.27 and the bears pushed the price below the moving averages. If the price sustains below the 50-SMA, the pair can drop to $0.20. That could put bears in the driver’s seat.

On the other hand, if the price rises from its current level and rises above the EMA 20, it will suggest that traders are seeing dips as a buying opportunity. The pair could then go up to $0.26 and above it to $0.28. The buyers will need to push the price above this level to challenge the resistance at $0.30.

Related: FTX funds on the go as a thief converts thousands of ETH into Bitcoin

QNT/USDT

Although Quant (QNT) has undergone a sharp correction in the past few days, it is attempting to get support and bounce off the support line. This indicates demand at lower levels.

QNT/USDT daily chart. Source: TradingView

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

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

This positive view could invalidate in the short term if the price continues to fall and breaks below the uptrend line. The pair could then drop to $87 and then $79.

QNT/USDT 4-hour chart. Source: TradingView

The pair’s recovery is facing selling near the downtrend line. This suggests that bears are active at higher levels. The bears pushed the price below the moving averages and will look to extend the decline to $105 and then $94.

To invalidate this negative view, bulls will need to kick and sustain the price above the downtrend line. The pair could then go up to $125, where the bears could mount a strong defense. If the buyers breach this barrier, the upside can reach $136.

TWT/USDT

While most major cryptocurrencies have extended their downtrend over the past few days, Trust Wallet Token (TWT) has moved in the opposite direction and recorded a sharp increase. This indicates short-term outperformance.

TWT/USDT daily chart. Source: TradingView

The TWT/USDT pair rose from $1.03 on Nov. 10 to $2.73 on Nov. 14, a 165% jump in a short time. This pushed the RSI into overbought territory suggesting a small correction or consolidation in the near term and that is what happened.

The pair is finding 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 for a few days.

Both moving averages are sloping up and the RSI remains in the positive territory, indicating that the bulls have the upper hand. If the buyers push the price above the $2.45 to $2.73 resistance zone, the pair could resume its uptrend. This positive view could invalidate on a breakout and close below the 20-day EMA ($1.70).

TWT/USDT 4-hour chart. Source: TradingView

The bears pushed the price below the 50-SMA but are struggling to keep the pair down. This suggests heavy buying at lower levels. If the buyers push the price above the EMA 20, the pair could move up to the downtrend line.

A break above this level could open the way for a possible rally to $2.45. This remains the main hurdle for the bulls to overcome. If they can break above, the pair could retest $2.73.

On the downside, a break below $1.92 could result in a drop to $1.81. This is an important level to watch because a break below it could tilt the lead in favor of the bears.