After strong monthly gains in July, Bitcoin (BTC) and the altcoins have started the new month on a tentative note. Even the United States equities markets have started August on a soft note.
Is the bottom in?
BofA Securities head of U.S. equity and quantitative strategy Savita Subramanian said in a recent note that the stock market usually bottoms after earnings estimates are revised lower but that has not yet happened during the current downturn.
Analysts in the crypto space also remain divided on whether the current rise is a bear market rally or the start of a new bull phase.
However, a minor positive is that the world’s first Bitcoin spot price exchange-traded fund (ETF), the Purpose Bitcoin ETF, has added 2,600 Bitcoin to its holdings. Although the total assets under management remain well below the all-time high, the recent addition is a sign that some institutional investors may have started bottom fishing.
Could Bitcoin and altcoins find buyers at lower levels? Let’s study the charts of the top-10 cryptocurrencies to find out.
The bulls repeatedly failed to sustain Bitcoin above the overhead resistance at $24,276 in the past few days, indicating that the bears are defending the level with all their might.
The price has pulled back to the 20-day exponential moving average (EMA) ($22,515), which is likely to act as strong support. If the price rises from the 20-day EMA, the bulls will again try to clear the overhead hurdle.
If they succeed, the BTC/USDT pair could pick up momentum and a rally to $28,171 is possible. The up-sloping 20-day EMA and the relative strength index (RSI) in the positive territory indicate advantage to buyers.
This positive view could invalidate in the near term if the price turns down and breaks below the 50-day simple moving average (SMA) ($21,310). The pair could then decline to the support line, which is an important level for the bulls to defend.
Ether (ETH) is witnessing a tough battle between the bulls and the bears near the important level at $1,700. Although the bulls repeatedly pushed the price above this level in the past four days, they could not continue the up-move.
The bears will try to pull the price to the 20-day EMA ($1,525) which is an important level to watch out for. If the price rebounds here, it will suggest that the sentiment has turned positive and traders are buying on dips.
That could increase the likelihood of a break above the $1,700 to $1,785 resistance zone. If that happens, the ETH/USDT pair could rise to $2,000 and later to $2,200.
Conversely, if the price breaks below the 20-day EMA, it will suggest that the pair may remain range-bound between $1,280 and $1,785 for a few days.
BNB‘s recovery is facing strong resistance at $300 but the shallow pullback shows that the bulls are not closing their positions in a hurry as they expect the up-move to continue.
The bulls will attempt to defend the zone between $275 and the 20-day EMA ($264). If the price rebounds off this zone, the bulls will again try to drive the BNB/USDT pair above $300. If they manage to do that, the pair could start its northward march toward the stiff overhead resistance at $350.
This positive view could invalidate in the near term if the price turns down and breaks below the 20-day EMA. If that happens, the pair could decline to the 50-day SMA ($240).
XRP price rose above the overhead resistance of $0.39 on July 30 and 31 but the bulls could not sustain the higher levels. This suggests that the bears have not yet given up and continue to defend the $0.39 level aggressively.
The gradually up-sloping 20-day EMA ($0.36) and the RSI in the positive territory indicate a slight advantage to buyers. If the price rebounds off the 20-day EMA, it will improve the prospects of a rally above the overhead zone between $0.39 and $0.41. If that happens, the XRP/USDT pair could rally to $0.48.
Conversely, if the price slips below the 20-day EMA, it will suggest that traders are booking profits as they expect the pair to remain range-bound for a few more days. A break below the 50-day SMA ($0.34) could open the doors for a drop to $0.30.
Cardano (ADA) turned down from the overhead resistance at $0.55 on July 30, indicating that the bears are in no mood to allow the bulls to have their way.
If the price breaks below the moving averages, the ADA/USDT pair could drop to $0.45. Such a move will suggest that the pair may remain stuck inside the large range between $0.40 and $0.55 for a few more days.
On the other hand, if the price rebounds off the moving averages, it will suggest that bulls are buying on dips. The bulls will then once again try to push the pair above $0.55. If they succeed, the pair could rise to $0.63, and later to $0.70.
The bears thwarted an attempt by the bulls to push Solana (SOL) above the overhead resistance at $48 on July 30. This may have attracted profit-booking from the short-term traders and that has pulled the price to the 20-day EMA ($40).
If the price rebounds off the 20-day EMA, the bulls will make one more attempt to push the SOL/USDT pair above the overhead resistance. If they succeed, the pair will complete an ascending triangle pattern that has a target objective of $71.
Alternatively, if the price breaks below the 20-day EMA, the pair could challenge the support line of the triangle. If this level gives way, the bullish setup will be negated. That could open the doors for a decline to $30.
The bulls tried to push Dogecoin (DOGE) above the overhead resistance at $0.08 but the bears had other plans. They sold at higher levels and have pulled the price back toward the moving averages.
If the price continues lower and breaks below the moving averages, the trendline may be in danger of collapsing. If that happens, the developing bullish ascending triangle pattern will be invalidated. That could tilt the advantage in favor of the bears.
Conversely, if the price rebounds off the moving averages, it will suggest that bulls continue to buy at lower levels. The bulls will then again attempt to push the DOGE/USDT pair above $0.08 and start a new up-move to $0.10.
Polkadot (DOT) broke and closed above the overhead resistance of $8.50 on July 31 but the long wick on the candlestick shows selling at higher levels. The bears are attempting to trap the aggressive bulls by pulling the price back below the breakout level.
If they succeed, the DOT/USDT pair could decline to the 20-day EMA ($7.64). This is an important level to keep an eye on because a break and close below it will suggest that the pair may extend its stay inside the range between $6 and $8.50 for a few more days.
Alternatively, if the price rises from the current level or the 20-day EMA, it will suggest that bulls are buying on dips. That could improve the prospects of a rally to the psychological level of $10 and then to $10.80.
The buyers pushed Polygon (MATIC) above the psychological resistance at $1 on July 31 but the long wick on the day’s candlestick shows aggressive selling at higher levels.
The bears will try to pull the price to the 20-day EMA ($0.82), which is likely to act as a strong support. If the price rebounds off this level, it will suggest that bulls continue to buy on dips. That may increase the possibility of a break above $1. If that happens, the MATIC/USDT pair could rally to $1.26.
The RSI is showing the first signs of forming a negative divergence, indicating that the bullish momentum may be weakening. If bears sink the price below the 20-day EMA, the pair could drop to $0.75. A bounce off this level could suggest that the pair may remain range-bound between $0.75 and $1 for a few days.
Avalanche (AVAX) turned down from the overhead resistance at $26.38 on July 30, indicating that bears continue to defend the level with vigor.
The bears will attempt to sink the price below the 20-day EMA ($22.55). If they manage to do that, the AVAX/USDT pair could decline to the 50-day SMA ($19.73), which is placed just above the support line. A break and close below this support could suggest that bears are back in control.
On the contrary, if the price rebounds off the moving averages, it will suggest that bulls continue to buy on dips. The bulls will then make another attempt to clear the overhead hurdle at $26.38 and start the new up-move to $33, and then to $38.
Market data is provided by HitBTC exchange.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.