Bitcoin and select altcoins are discounted and trading close to critical support levels, but will buyers step in?
The United States dollar index (DXY) resumed its strong uptrend on July 11, indicating that investors are preparing for the July 13 CPI report to be hotter than expected. A survey of economists by Bloomberg estimates that in June consumer prices surged to 8.8%, a four-decade high.
Arthur Hayes, former CEO of derivatives trading platform BitMEX, believes that the U.S. dollar and the euro were moving towards hitting parity. If that happens, the central banks will have to adopt yield curve control, which could lead to the disintegration of the currency and ultimately benefit Bitcoin (BTC).
Glassnode analyst James Check said in an interview with Cointelegraph that the number of Bitcoin holders is higher during the current bear market. This shows the resilience of the Bitcoin network. Another positive is that the smaller investors have used the dip to add to their positions.
Although the short-term picture remains skewed to the downside, the long-term view looks encouraging for bulls. Will Bitcoin and the altcoins attract buying at lower levels? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin turned down from $22,527 on July 8 and broke below the 20-day exponential moving average ($21,164) on July 10. This suggests that traders who may have bought at lower levels booked profits and the aggressive bears initiated short positions.
The BTC/USDT pair could decline to the support line of the triangle. This is an important level to watch out for because a bounce off it will suggest that the bulls are accumulating near this level. The buyers will then again try to clear the overhead hurdle at the 20-day EMA and push the pair to $23,363.
A break and close above the 50-day simple moving average ($24,496) will suggest that the pair may have bottomed out.
Conversely, if the price breaks below the support line, it will indicate that bears are in control. The sellers will then attempt to sink the pair to the strong support zone between $18,626 and $17,622.
Ether (ETH) turned down from the overhead resistance at $1,280 on July 8, suggesting that the bears are defending the level aggressively. The sellers pulled the price below the 20-day EMA ($1,192) on July 10 and are attempting to break the support line of the triangle on July 11.
If they manage to do that, the bullish setup will be invalidated. That could sink the ETH/USDT pair to $998. This is an important level to watch out for because a break and close below it could result in a retest of $881.
Contrary to this assumption, if the price rebounds off the support line, it will suggest that the bulls are accumulating on dips. The buyers will have to push and sustain the price above $1,280 to gain the upper hand in the near term. The pair could then rise to the 50-day SMA ($1,422) and later rally to the pattern target at $1,679.
Binance Coin’s (BNB) failure to rise to the 50-day SMA ($257) may have attracted profit-booking from short-term traders. That has pulled the price below the 20-day EMA ($234).
If the price sustains below the 20-day EMA, the BNB/USDT pair could once again drop to the strong support at $211. This is an important level to keep an eye on because a strong bounce off it will indicate accumulation on dips.
The bulls will then make another attempt to push the price above the 50-day SMA. If they succeed, it will signal that the pair may have bottomed out. This positive view could invalidate if the price breaks below $211.
Ripple (XRP) failed to rise above the resistance line of the symmetrical triangle on July 8, indicating that the bears are selling on rallies. Strong selling on July 10 pulled the price to the support line of the triangle.
The relative strength index (RSI) has dropped near 43 indicating that the momentum favors the bears. If sellers sink the price below the support line, the XRP/USDT pair could decline to $0.30 and then retest the critical support at $0.28. If this level cracks, the pair could resume its downtrend.
If the price rebounds off the support line, it will suggest that the bulls continue to buy on dips. The buyers will then make another attempt to push the price above the triangle and gain the upper hand. If that happens, the pair could rise to $0.41.
Cardano’s (ADA) failure to sustain above the 20-day EMA ($0.47) suggests that the bears are defending this level aggressively. The sellers have pulled the price to the immediate support at $0.44.
The gradually downsloping 20-day EMA and the RSI in the negative territory suggest that bears have a slight edge. If the sellers pull the price below $0.44, the ADA/USDT pair could retest the crucial support at $0.40. If this level gives way, the selling could intensify and the pair may resume its downtrend.
The bulls are expected to defend the zone between $0.40 and $0.44 with vigor. If the price rebounds off this zone with strength, the buyers will again attempt to clear the overhead hurdle at the moving averages.
Solana (SOL) broke below the 20-day EMA ($36) on July 11 and has dropped to the support line of the symmetrical triangle pattern. The price is reaching close to the apex of the triangle, indicating the possibility of a breakout within the next few days.
If the price drops below the support line, it will indicate that the uncertainty has resolved in favor of the bears. The SOL/USDT pair could then drop to $31 and later to the critical support at $26. A break below this support could signal the resumption of the downtrend.
Conversely, if the price rises from the current level, it will suggest that the bulls are attempting to defend the support line. The pair could then rise to the resistance line. The bulls will have to clear this hurdle to start an up-move to $50.
Dogecoin (DOGE) turned down from the 50-day SMA ($0.07) on July 8 and broke below the 20-day EMA ($0.07) on July 10. The bears are attempting to sink the price below the strong support at $0.06.
If they succeed, the DOGE/USDT pair could slide to the crucial support at $0.05. A break and close below this level could signal the start of the next leg of the downtrend.
Conversely, if the price rebounds off $0.06, it will suggest buying at lower levels. The bulls will then make another attempt to clear the hurdle at the 50-day SMA and push the pair to $0.08. The next trending move could begin on a break above $0.08 or below $0.06. Until then, random range-bound action is likely to continue.
Related: 3 reasons why Solana can repeat Ethereum’s 2018 fractal to 5,000% gains
Polkadot (DOT) turned down from $7.30 on July 10 after bulls repeatedly failed to push the price above the resistance. The bears will attempt to sink the price to the strong support at $6.36.
Although the downsloping moving averages indicate advantage to bears, the positive divergence on the RSI suggests that the bearish momentum could be weakening. The longer the price remains stuck between $6.36 and $7.30, the stronger will be the breakout from it.
If bears sink the price below $6.36, the DOT/USDT pair could resume the downtrend. The pair could then drop to $5. Conversely, if the price rises from the current level and breaks above $7.30, the pair could rally to the 50-day SMA ($8.20). A break and close above this level could suggest that the downtrend could be over.
Shiba Inu (SHIB) turned down from the overhead resistance at $0.000012 on July 10, indicating that bears are active at higher levels. The sellers will try to pull the price to $0.000010.
If the price rebounds off this level with strength, it will suggest demand at lower levels. The bulls will then again attempt to drive the price above the overhead resistance at $0.000012. If they succeed, the SHIB/USDT pair could rally to $0.000014.
Alternatively, if the price rebounds off $0.000010 but fails to climb above $0.000012, then it will point to a consolidation in the near term. The bears may gain the upper hand if the price slips below $0.000010. The pair could then decline to $0.000009.
Avalanche (AVAX) turned down from the overhead resistance at $21.35 on July 8, indicating that bears continue to defend the level aggressively. The bears are attempting to extend their short-term advantage by pulling the price below the 20-day EMA ($18.83).
If they manage to do that, the AVAX/USDT pair could remain stuck inside the range between $13.71 and $21.35. The flattish 20-day EMA and the RSI near 46 also point to a possible consolidation in the short term.
The first sign of strength will be a break and close above $21.35. Such a move could signal the start of a new up-move. The pair could then rally to $29 where the bears may again mount a strong resistance.
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.
Market data is provided by HitBTC exchange.