Bitcoin experienced a sharp plunge on July 24, dropping to $29,000, indicating that bears are attempting to gain control of the market. The inability to hold onto higher levels likely enticed short-term bulls to secure profits, while aggressive bears initiated short positions.
Despite the bearish sentiment in the near term, long-term investors remain unfazed and continue to hold their positions. According to Glassnode data, Bitcoin’s long-term holder supply reached a new high of 14.52 million Bitcoin, which is equivalent to 75% of the circulating supply.
While the cryptocurrency markets have been soft recently, the US equities markets remain strong. The Dow Jones Industrial Average has seen continuous gains for 10 consecutive days, the longest streak since 2017. However, this may change this week due to upcoming key earnings reports and the Federal Reserve’s policy decision on July 26. The Fed’s decision could also impact the US Dollar Index (DXY), which is currently on a path of recovery.
The question now is whether lower price levels will attract buyers in Bitcoin and select altcoins. Additionally, the strength in the US equities markets may limit the downside in the cryptocurrency markets. To find out, let’s analyze the charts.
Looking at the S&P 500 Index (SPX), it turned down from 4,578 on July 19, but the fact that the bulls have not given up much ground suggests that buyers anticipate the uptrend to continue. The 20-day exponential moving average (EMA) of 4,471 and the relative strength index (RSI) in the overbought territory further support the idea that bulls are in control. If the price turns up from 4,513 or the 20-day EMA, it will confirm that lower levels continue to attract buyers, opening the possibility of a break above 4,578 and a rally to 4,650 and eventually 4,800. However, if the price falls below the 20-day EMA, it could lead to a drop to the 50-day simple moving average (SMA) of 4,336.
As for the US Dollar Index (DXY), it has shown a sharp upturn since July 18, surpassing the breakdown level of 100.82 on July 20. This suggests that the previous breakdown may have been a bear trap. Currently, the price has reached the 20-day EMA, a significant level to monitor. If it turns down sharply from there and falls below 99.57, the downtrend may resume, potentially crashing the index to 97.50. Conversely, if the price breaks above the 20-day EMA, it would indicate a return of bullish sentiment, pushing the index to the 50-day SMA of 102.66 and potentially the downtrend line.
Turning to Bitcoin, despite bulls pushing the price above the 20-day EMA on July 23, strong selling at higher levels resulted in a price plunge below the strong support at $29,500. The BTC/USDT pair has now reached the 50-day SMA, a crucial level to monitor. If the price turns up from the current level and rises above the 20-day EMA, it would suggest that the bearish break may have been a trap, potentially leading to a rally to $31,000. Conversely, if the price continues to decline and falls below the 50-day SMA, it would indicate that bulls have given up, potentially causing the pair to slump to $27,500 and later $26,000.
Moving on to Ether (ETH), it bounced off the 50-day SMA on July 23, but the bears managed to hold the price below the 20-day EMA. They are now attempting to pull and sustain the price below the 50-day SMA, which could trigger a deeper correction toward $1,700 and indicate that the pair may remain range-bound between $1,626 and $2,000 for a while longer. However, if the price rebounds off the 50-day SMA and rises above the 20-day EMA, it would suggest strong buying at lower levels, potentially paving the way for a rally to $2,000. The next significant move is likely to occur on a break above $2,000 or below $1,626.
In the case of XRP, after failing to sustain above $0.83 on July 19 and 20, the price has turned down toward the 20-day EMA. To maintain the uptrend, bulls must vigorously defend the 20-day EMA. If the price rebounds off this level with strength, the XRP/USDT pair may form a range with boundaries at $0.66 on the downside and $0.86 on the upside. A break and close above the overhead resistance of $0.86 would be a sign of strength. However, if the price breaks below the 20-day EMA, it would suggest bearish pressure and attract further selling, potentially causing the pair to collapse to the breakout level of $0.56.
As for Binance Coin (BNB), the bulls have struggled to push the price above the 20-day EMA in recent days. Heavy selling by bears has put pressure on the support of the symmetrical triangle. If the price sinks below the support, it would indicate that uncertainty has resolved in favor of the sellers. The BNB/USDT pair could then drop to the critical support at $220, likely attracting aggressive buying from bulls. Alternatively, the price could bounce off the support line of the triangle, causing the pair to remain range-bound for some time. A breakout above the triangle would signal a comeback.
Regarding Cardano (ADA), it has been locked in a tough battle between bulls and bears near the 20-day EMA. The lack of clear advantage for either side is reflected in the flattening 20-day EMA and RSI near the midpoint. If the price falls below $0.30, it would favor the bears and potentially sink the price to the uptrend line. On the other hand, if the price rises above $0.33, it would suggest a return of bullish sentiment, potentially pushing the ADA/USDT pair to the July 14 intraday high of $0.38.
Lastly, for Dogecoin (DOGE), the bulls have successfully defended the breakout level of $0.07 against the bears’ attempts to pull the price below it. The upward turn of the 20-day EMA and the positive RSI indicate that the path of least resistance is to the upside. The next minor resistance lies at $0.08, where the bears are expected to put up a strong fight. To maintain the bullish view, buyers need to prevent the price from sliding below the 20-day EMA. If successful, a rally to $0.10 becomes more likely. However, if the price declines and sustains below $0.07, the positive view would be invalidated.
As for Solana (SOL), it has experienced profit booking by short-term traders, resulting in a drop below the 20-day EMA on July 24. Bulls will attempt to halt the downward movement at $22.30. If successful, they will aim to clear the overhead hurdle at $27.12, potentially retesting the July 14 high of $32.13. On the other hand, if the price falls below $22.30, it would suggest that the previous break above $27.12 may have been a bull trap. The pair could then drop to the 50-day SMA at $19.80, indicating a continued swing within the $14 to $27.12 range.
In summary, Bitcoin’s recent plunge suggests bearish sentiment, but long-term investors remain unfazed. The performance of US equities markets and the Federal Reserve’s policy decision could impact the cryptocurrency markets. Analyzing the charts of major cryptocurrencies, such as Bitcoin, Ether, XRP, Binance Coin, Cardano, Dogecoin, and Solana, provides insight into potential price movements and levels to watch.
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