Top 5 cryptocurrencies to watch this week: BTC, LUNA, ATOM, XTZ, AXS

The sentiment in the crypto markets can change quickly as seen from the Crypto Fear and Greed Index, which rose from levels of extreme fear on Sept. 30 to neutral on Oct. 3. The sentiment may improve further if Bitcoin (BTC) breaks out and sustains above the psychologically critical level at $50,000.

One important event that may boost short-term sentiment is the United States Securities and Exchange Commission’s (SEC) decision on Bitcoin exchange-traded fund (ETF) applications. Although the SEC extended the deadline of four Bitcoin ETF applications by 45 days on Oct. 1, Bloomberg’s senior ETF analyst Eric Balchunas is hopeful that a futures-backed Bitcoin ETF may receive the green signal by the middle of October.

Balchunas said the Bitcoin futures-based ETF applications, which have found support from SEC chair Garry Gensler, “are very much alive and likely on schedule (we think 75% chance approved in Oct).”

If bulls build on the recent strength in Bitcoin and clear the hurdle at $50,000, several altcoins may pick up momentum. Let’s study the charts of the top five cryptocurrencies that may outperform in the short term.

BTC/USDT

Bitcoin broke above the 50-day simple moving average (SMA) ($46,633) on Oct. 1, but the bears are attempting to stall the recovery near the resistance at $48,843.20. However, a positive sign is that bulls have not allowed the price to dip below the 50-day SMA.

The 20-day exponential moving average (EMA) ($45,141) has turned up and the relative strength index (RSI) is in the positive territory, indicating an advantage to the bulls. If buyers push the price above $48,843.20, the BTC/USDT pair could rally to $52,920.

This level may again act as stiff resistance but if bulls bulldoze their way through, the head and shoulders pattern will be invalidated. That could result in a pick-up in momentum and the pair could rise to $60,000.

Contrary to this assumption, if the price turns down from the current level and breaks below the moving averages, it will suggest that higher levels are attracting aggressive selling from the bears. The pair may then drop toward $40,000.

Both moving averages on the four-hour chart are sloping up and the RSI is near the overbought zone, indicating the path of least resistance is to the upside. The price has been consolidating in a tight range between $47,000 and $48,495 for some time.

If bulls thrust the price above $48,843, the pair could rise to the psychological mark at $50,000 and then challenge the stiff resistance at $52,920.

Conversely, if the price turns down and breaks below the 20-EMA, it will suggest that short-term traders are booking profits. The pair could then drop to $45,000 and later to the 50-SMA.

LUNA/USDT

Terra protocol’s LUNA token broke above the downtrend line on Oct. 2 and bulls followed it up with a break above the all-time high at $45.01 on Oct. 3. However, the long wick on Oct. 3's candlestick suggests that bears are attempting to defend the $45.01 level aggressively.

If the price turns down from the current level but rebounds off the downtrend line, it will suggest that the sentiment remains positive and traders are buying on dips.

The bulls will then make one more attempt to push the price above the $45.01 to $46.17 resistance zone and start the next leg of the uptrend. The psychological level at $50 may act as a resistance but if it is crossed, the LUNA/USDT pair may rally to $65.

On the contrary, if the price turns down and breaks below the 20-day EMA ($36.30), the next stop could be the 50-day SMA ($32.97). A break below this support will suggest that the bulls are losing their grip.

Although bulls pushed the price above $45.01, the long wick on the candlestick shows selling at higher levels. The bears are currently attempting to trap the aggressive bulls who may have gone long above $45.01.

The first support on the downside is the 20-EMA. A strong bounce off this support will suggest the sentiment remains positive. The bulls then try to propel the price above $46.17.

Alternatively, a break below the 20-EMA could pull the price down to the 50-SMA. If this support cracks, the pullback may deepen to $33.

ATOM/USDT

Cosmos (ATOM) successfully held the breakout level at $32.32 on Sep. 29, which suggests that sentiment remains positive and bulls are buying on dips.

The bulls pushed the price above the 20-day EMA ($35.88) on Sept. 30, but the momentum has failed to pick up. This suggests that bears have not thrown in the towel yet and are selling on rallies. The bulls will have to thrust and sustain the price above $44.80 to signal the resumption of the uptrend.

The long wick on Oct. 3’s candlestick suggests selling at higher levels. If the price turns down from the current level and breaks below the 20-day EMA, the bears will make one more attempt to sink the price below $32.32. If they succeed, the ATOM/USDT pair could drop to the 50-day SMA ($28.54).

The pair turned down from the resistance line of the symmetrical triangle, indicating that bears are defending this level aggressively. If the price rebounds off the moving averages, the bulls will make one more attempt to push the price above the triangle.

If they succeed, the pair could rally to $44.80 and then to the psychological level at $50. A break and close above this level could open the doors for an up-move toward the pattern target at $57.61.

On the contrary, if the price slips below the moving averages, the next stop could be the support line. If this level cracks, the pair could drop to $28.83 and then to $24.50.

Related: Ethereum fractal from 2017 that resulted in 7,000% gains for ETH appears again in 2021

XTZ/USDT

Tezos (XTZ) rebounded off the 50-day SMA ($5.50) on Sept. 29 and the momentum picked up after the bulls pushed the price above the 20-day EMA ($6.40) on Sept. 30.

Sustained buying pushed the price above the overhead resistance zone at $8.03 to $8.42. Both moving averages are sloping up and the RSI is near the overbought territory, indicating that bulls are in control.

If bulls sustain the price above $8.42, it will suggest the start of a new uptrend. Contrary to this assumption, if bears pull and sustain the price below $8.03, it will suggest profit-booking at higher levels. The XTZ/USDT pair could then drop to the 20-day EMA.

The four-hour chart shows the formation of a symmetrical triangle pattern, which usually acts as a continuation pattern. The bulls pushed the price above the triangle and successfully held the breakout level, indicating the start of an up-move.

This setup has a pattern target at $11.33. The rising 20-EMA and the RSI in the overbought zone suggest that bulls have an edge.

The first sign of weakness will be a close below $8.03. That could open the doors for a retest of the 20-EMA. A strong rebound off this level will suggest that the sentiment remains positive and traders are buying on dips. Conversely, a break below the 20-EMA could pull the price down to $7 and later to $6.50.

AXS/USDT

Axie Infinity (AXS) soared above the previous all-time high at $94.67 on Oct. 1, which suggests the resumption of the uptrend. A coin hitting a new all-time high is a positive sign as it shows strong demand from traders.

The AXS/USDT pair has been facing resistance near $120.57, but the positive sign is that bulls have not given up much ground. This shows that traders are not hurrying to book profits after the recent rally and are buying the dips.

The 20-day EMA ($77) has started to turn up and the RSI is in the overbought zone, indicating that bulls have the upper hand. If buyers drive the price above $120.57, the pair could start its northward march toward $150 and then $165.58.

Contrary to this assumption, if bears pull the price below the breakout level at $94.67, it may result in aggressive profit-booking by traders and the pair may then drop to the 20-day EMA.

The pair has rebounded off $103.22 and the bulls are currently attempting to push the price above the overhead resistance at $110.50. The upsloping moving averages and the RSI in the overbought zone indicate the path of least resistance is to the upside.

If buyers push the price above $110.50, the pair could retest the critical resistance at $120.57. A break and close above this level could signal the resumption of the uptrend.

On the other hand, if the price turns down from the overhead resistance, the pair may consolidate for some time before starting the next directional move. The first sign of weakness will be a break and close below the 20-EMA. Such a move will suggest that the bullish momentum has weakened and supply exceeds demand.

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.