Bitcoin continues to trade within a narrow range, making it difficult to predict its next breakout direction. Despite the US Dollar Index dropping below 100, which typically has an inverse correlation with Bitcoin, it has failed to push the cryptocurrency higher. This suggests that Bitcoin is charting its own path in the near term.
The upcoming earnings season from major US companies may impact equity markets, but it is uncertain whether it will have the same effect on Bitcoin. As Bitcoin’s price remains within a range, it becomes increasingly challenging to determine the event or news flow that will cause a breakout.
Despite the uncertainty, whales are not deterred. CryptoQuant’s contributing analyst SignalQuant pointed out that one on-chain indicator, the unspent transaction outputs, has been increasing in 2023, similar to the rise seen in 2019. This upward trend suggests that Bitcoin has room to grow and that the low point in late 2022 may have been a long-term bottom.
Will a potential recovery in the US Dollar Index limit the upside for Bitcoin and other major altcoins? Let’s analyze the charts to find out.
S&P 500 Index:
The S&P 500 Index is experiencing a strong uptrend, reaching resistance at 4,513. If buyers can hold the current levels, it indicates that traders expect the rally to continue. The developing negative divergence on the relative strength index (RSI) has been negated, suggesting that the bulls are still in control. If the index breaks above 4,513, it could resume its uptrend, potentially reaching 4,650. On the downside, the 20-day exponential moving average (EMA) at 4,420 is an important support level to watch.
US Dollar Index:
The US Dollar Index recently broke below the moving averages and fell below the crucial support at 100.82, completing a bearish descending triangle pattern. The recent decline has pushed the RSI into oversold territory, indicating a possibility of a minor recovery. If the price turns up and retests the breakdown level of 100.82, it will be an important level to watch. A failure to break above this level will suggest that the bears have turned the previous support into resistance, potentially starting a downtrend towards 97 and then 93.64. To prevent further decline, bulls must push and maintain the price above 100.82.
Bitcoin:
Bitcoin bulls have defended the 20-day EMA ($30,173) for the past few days, but they have failed to initiate a strong bounce from this level. This lack of aggressive demand suggests a potential lack of momentum at current levels. The 20-day EMA has started to flatten out, and the RSI is above the midpoint, indicating a balance between supply and demand. This balance may keep Bitcoin trading within the tight range of $29,500 and $31,500 for some time. To signal the start of the next leg of the uptrend, buyers must push the price above $32,400. On the downside, a drop below $29,500 could lead to a slide towards the 50-day SMA at $28,671.
Ether:
Ether is trying to maintain above the 20-day EMA ($1,897), indicating that lower levels are attracting buyers. Bulls will attempt to push the price to the psychological resistance of $2,000. A break and close above this level could pave the way for a rally towards the $2,141 to $2,200 zone. On the downside, the 50-day SMA at $1,853 is an important support level to watch. A break below this level may suggest that the ETH/USDT pair will remain within the range of $1,626 and $2,000.
XRP:
XRP is finding support between the 50% Fibonacci retracement level of $0.69 and the 61.8% retracement level of $0.64. Bulls will attempt to resume the uptrend, but they may face resistance at $0.83 and $0.93. If the price turns down from this zone, XRP may trade within a range for a few days. Alternatively, a break below $0.64 could signal a bearish sentiment among buyers, leading to a further decline towards the 20-day EMA at $0.58.
BNB:
BNB turned down from the 50-day SMA ($253) and reentered the symmetrical triangle pattern. The 20-day EMA has flattened out, indicating a balance between supply and demand. The BNB/USDT pair may continue to trade within the triangle pattern for some time. Buyers must break above the triangle to gain the upper hand, with a momentum pickup after breaking the overhead resistance at $265. However, a break below the triangle may signal a downtrend with a potential target below $220.
Solana:
Solana formed an inside-day candlestick pattern, suggesting uncertainty about the next directional move. Typically, the tightening of the range is followed by a sharp breakout. If buyers can push the price above $29.12, the SOL/USDT pair could jump to $32.13, potentially opening doors for a further rise to $38. Conversely, a downturn below $26 could indicate a bearish advantage, with a potential drop to $24 and the 20-day EMA at $22.53.
Cardano:
Cardano’s pullback has reached near the breakout level of $0.30. A significant correction like this may delay the start of the next leg of the uptrend. However, moving averages are on the verge of a bullish crossover, and the RSI is in positive territory, indicating a slight advantage for bulls. If the price turns up from the current level, buyers may attempt to drive the ADA/USDT pair towards the overhead resistance at $0.38. However, the bears may stall the recovery at $0.34 and $0.36. On the downside, a break below $0.30 could tilt the advantage in favor of bears.
Dogecoin:
Dogecoin is experiencing a battle between bulls and bears near the overhead resistance at $0.07. The 20-day EMA has turned up, and the RSI is in positive territory, giving bulls a slight edge. Bulls will try to push the price towards $0.08, but they may face strong defense from bears. However, a downturn below the moving averages may suggest continued selling pressure from bears, keeping the DOGE/USDT pair within a range of $0.06 to $0.07.
Polygon:
Polygon is retesting the breakout level after a recent price decline. The price could drop further to $0.72 before potentially rebounding. If the price bounces off $0.72, it suggests buying at lower levels. Bulls will then attempt to push the price above the overhead resistance at $0.90. A successful breakout could lead to the start of the next leg of the uptrend in the MATIC/USDT pair.
In conclusion, while Bitcoin remains within a narrow range, it is uncertain when it will break out. The direction of Bitcoin and other major altcoins may be independent of the US Dollar Index and influenced by their own factors. The upcoming earnings season for US companies may impact equities markets but may not have the same effect on Bitcoin. Traders and investors are closely watching various support and resistance levels for potential breakout or consolidation patterns in the market.
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