- MAGIC, Optimism and Stargate Finance are up more than 20% after the US Federal Reserve’s policy meeting on Wednesday.
- While MAGIC and Optimism are entering the price discovery phases, STG has a long way to go.
- The rallies, while impressive for all three altcoins, face crucial hurdles and could trigger a correction.
Optimism (OP), MAGIC (MAGIC) and Stargate Finance (STG) are the top gainers in the last 24 hours. The rally of these altcoins can be attributed to the volatility generated by the interest rate decision and the Fed policy meeting that took place on Wednesday.
US Federal Reserve Chairman Jerome Powell’s speech mentioned that rates will remain high and his inflation target is 2%. Despite the 25bp rate hike, Powell’s aggressive tone is good for the US dollar and is likely to trigger a sell-off in risky assets like Bitcoin and stocks.
Therefore, market participants should be wary of this musical chair rally as it could end soon, leaving investors with altcoin bags or worse, receiving a margin payment.
Also read: The Federal Reserve remains aggressive with a rise of 25bp, how will the price of Bitcoin react?
Can altcoins keep their gains?
MAGIC has the highest gains of 37% among the three altcoins. Stargate Finance is second with 34% and Optimism with 28%. While the returns on these altcoins are impressive, Investors should be cautious What Bitcoinlargest cryptocurrency by market cap shown cracks in his armor.
Let’s take a look at MAGIC altcoin and what to expect from its price action.
MAGIC price hit an all-time high of $1,787 on Feb 2, but 29% daily candlestick preceding it is an impressive move. Using the trend-based Fibonacci extension tool, traders may notice that the next hurdle is around $1.90, which is the 100% Fibonacci extension level.
Depending on the daily close of candlesticks on February 2, investors can decide whether they want to jump into a long or short position.
MAGIC/USDT 1 day
If the current candlestick becomes a doji, the probability of a reversal becomes high. In such a case, MAGIC could pull back to the 50% Fibonacci retracement level at $1.57.
Stargate Finance price peaked at 34% after the FOMC meeting. In doing so, STG marked the resistance level of the state trend at $0.800. If there is a massive rejection, causing a small body for a daily candle or if it changes to a bearish candle, it is indicative of profit taking. In such a case, Stargate Finance could see a 15% reduction, bringing it down to $0.658.
STG/USDT 1-day chart
On the other hand, if $0.800 becomes a support floor, the next hurdle for STG is 14% away at $0.914.
Bullish price reached an all-time high of $2.81, but the daily candle has already turned red, denoting increased selling pressure. Continued profit taking will result in an 11% drop to $2.38, which is the 50% Fibonacci retracement level.
OP/USDT 1-day chart
Although unlikely, sustained buying pressure turning the $2.81 hurdle into a support floor could see the OP price tag the 127.2% Fibonacci extension level at $3.10, marking another all-time high.