Bitcoin has experienced a period of low volatility in August, with the spread between the upper and lower Bollinger Bands shrinking to its third-tightest ever at 2.9%. Typically, periods of low volatility are followed by a range expansion, suggesting that a breakout could be imminent. However, timing the breakout with certainty is difficult, so traders should remain cautious to avoid missing out on potential opportunities.
One factor that may be weighing down risk assets is the strength of the U.S. Dollar Index (DXY), which has seen a four-week consecutive increase. In contrast, U.S. equities markets, such as the S&P 500 Index and the Nasdaq Composite, have entered a corrective phase in the past few days, indicating profit-booking by short-term traders.
Looking at the charts, for the S&P 500 Index, the price bounced off the 50-day simple moving average (SMA) on August 14, indicating strong support at this level. If the bulls are able to push the price above the 20-day exponential moving average (EMA), it could start a journey towards higher levels. However, if the bears manage to bring the price below the 50-day SMA, a deeper correction could occur.
The U.S. Dollar Index has held support at the 20-day EMA on multiple occasions, indicating a change in sentiment from selling on rallies to buying on dips. It is currently facing resistance at the downtrend line, and a turnaround from this level could suggest a continued bullish trend.
Bitcoin slipped below the 20-day EMA on August 13, but the lack of aggressive selling at lower levels suggests that bears may not have full control. The BTC/USDT pair is currently consolidating within the range of $28,585 to $30,350, with the next trending move likely to occur once the price escapes this range.
Ether (ETH) has been trading around the 20-day EMA, with the 50-day SMA acting as a key support level. The flattening out of the moving averages and the near midpoint position of the relative strength index (RSI) suggest a balance between buyers and sellers. A break above the moving averages could lead to a rally, while a turn down from the 50-day SMA could result in a drop to strong support levels.
BNB has been trading below the moving averages but has not breached the support line of the symmetrical triangle. If this continues, it may invalidate the pattern. The lack of movement in the moving averages and the RSI below the midpoint suggest that price action may remain dull for some time.
XRP has been swinging between the moving averages, with buyers finding support at the 50-day SMA and sellers at the 20-day EMA. The downsloping 20-day EMA and the negative RSI indicate that bears have the edge. A break below the 50-day SMA could lead to a drop to $0.56.
Cardano has been correcting inside a descending channel pattern, with the resistance line acting as a hurdle for the bulls. A break above this resistance line could lead to a potential rally, while a turn down from this level could result in a continuation of the descent inside the channel.
Dogecoin’s recovery was rejected at the downtrend line, indicating strong resistance from bears. The support line of the ascending channel is an important level to watch, as a break below it could lead to a significant drop in price.
Solana is trading within a range between $22.30 and $26, with a minor advantage for the bulls as the price is above the 20-day EMA. A breakout from this range could lead to further momentum in either direction.
Polygon is struggling to break above the 20-day EMA, but has also managed to hold its ground against the bears. The flattening out of the moving averages and the RSI near the midpoint suggest a balance between supply and demand.
In conclusion, Bitcoin and altcoins are currently navigating various support and resistance levels, with a breakout in either direction possible. Traders should remain cautious and monitor market conditions closely to seize potential opportunities as they arise.