Bitcoin (BTC) has been trading within a narrow range over the past few days, but it is worth noting that this range has formed near the recent local high. This suggests that the bulls are not in a hurry to exit their positions as they anticipate another leg higher for the cryptocurrency.
One interesting development during this consolidation period is that Bitcoin’s market dominance has decreased from over 50% on June 30 to 48% currently. This indicates that market participants have been gradually shifting their focus to select altcoins, which have started to gain momentum.
However, it is important to note that altcoin recovery is likely to remain contingent on Bitcoin’s strength. If Bitcoin experiences a sharp downturn, there is a high possibility of a sell-off in altcoins. While some select altcoins may provide trading opportunities, cryptocurrency traders should remain cautious and closely monitor Bitcoin’s price action.
Now let’s take a look at the important support and resistance levels to watch for in Bitcoin. Analyzing the charts of the top 5 cryptocurrencies, here are some potential price movements in the near term.
Bitcoin Price Analysis:
Bitcoin has managed to sustain itself above the 50-day simple moving average ($29,377) in recent days. However, the bears have prevented the price from crossing above the 20-day exponential moving average ($29,670). If the bears succeed in pulling the price below the immediate support at $28,861, it could indicate that the BTC/USDT pair may remain range-bound between $31,000 and $24,800 for some time. The gradually downsloping 20-day EMA and the negative territory of the relative strength index (RSI) are indicators favoring the bears. However, this bearish view would be invalidated if the bulls manage to drive the price above the 20-day EMA, which could lead to a rise towards the overhead resistance zone between $31,000 and $32,400. Breaking through this zone would signal the start of a new uptrend towards $40,000.
Dogecoin Price Analysis:
Dogecoin (DOGE) has been facing resistance just above the $0.08 level. However, the bulls have managed to hold their ground and have not conceded much. It is worth noting that the bulls bought the dip on July 28, indicating positive sentiment and a willingness to buy the dips. If the bulls manage to push the price above the intraday high made on July 25, the DOGE/USDT pair could gain momentum and move towards $0.10 and subsequently to $0.11. On the other hand, if the price turns down from the current level and falls below the 20-day EMA, it could suggest that bears are selling on rallies. In this case, the pair may slide to the breakout level of $0.07.
Maker Price Analysis:
Maker (MKR) has finally broken above the $1,200 resistance level after several months of being stuck below it. Typically, after a price breaks above a significant resistance level, it tends to retest that level before moving higher. If the price drops to the $1,200 breakout level and then rebounds sharply, it would suggest that this resistance has turned into support. This could set the stage for a new uptrend towards $1,600 and eventually $1,900. However, if bears manage to sink and sustain the price below $1,200, it could indicate that the recent breakout was a bull trap. The MKR/USDT pair may then decline towards the 20-day EMA ($1,079), and further below that level would suggest that bears have gained control.
Optimism Price Analysis:
Optimism (OP) has been in a downtrend for several days but is now showing signs of a potential new uptrend. The 20-day EMA ($1.46) has started to turn up, and the RSI is in positive territory, indicating that the bulls may have the upper hand. If the price surpasses the minor resistance at $1.66, it could rise towards $1.88 and eventually $2. However, if the price turns down from $1.66, it would suggest that bears are selling on rallies. The key support levels to watch are the 20-day EMA and then the 50-day SMA ($1.33).
XDC Network Price Analysis:
The XDC Network (XDC) experienced a strong uptrend from $0.03 to $0.06 between July 11 and July 25. Currently, the price is correcting and may drop to the 38.2% Fibonacci retracement level at $0.05 and the 20-day EMA ($0.05). A strong bounce off these levels would indicate continued bullish sentiment. If the price turns up from this zone, the XDC/USDT pair may attempt to resume its uptrend, with a potential rally towards $0.10. However, a break and close below the 20-day EMA would negate this positive view.
In conclusion, Bitcoin’s narrow range trading and altcoin recovery are closely linked. While altcoins are currently showing strength, it is crucial to monitor Bitcoin’s performance for potential sell-offs. Technical analysis of the top cryptocurrencies suggests various price scenarios for the near term. However, market participants should conduct their own research and exercise caution when making investment and trading decisions.
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