Bitcoin (BTC) rose to the 200-week moving average on July 8, a level that could act as a battleground between bulls and bears. Many analysts are watching this level as a break and a close above it could be the first sign that the bear market may be over.
Mike McGlone, senior commodity strategist at Bloomberg, said that bitcoin’s 50-week and 100-week moving averages are showing similar signs as they were before the 2018 bear lows. Therefore, McGlone expects bitcoin to make a strong rally in the second half of 2022.
Another positive sign is that bitcoin climbed above $22,000 on July 8, even as the United States Dollar Index (DXY) continued its northward march. This suggests that the strong inverse correlation between Bitcoin and DXY may be starting to weaken.
Can Bitcoin increase its recovery by pulling the crypto markets up? Let’s study the chart of the top-10 cryptocurrencies to find out.
Bitcoin broke the resistance line of the symmetrical triangle and the 20-day exponential moving average (EMA) ($21,233) on July 7, indicating that the bulls are making a comeback.
The 20-day EMA and the Relative Strength Index (RSI) just below the midpoint suggest that selling pressure is likely to ease.
If the price rebounds from the current level or the breakout level from the triangle, it would indicate that sentiment has turned positive and traders are buying dips. This could increase the chances of a rally to the 50-day simple moving average (SMA) ($25,015) and then the pattern target at $26,490.
If the price breaks below the 20-day EMA and re-enters the triangle, this positive outlook could be invalidated in the near term. This would indicate aggressive selling by the bears at higher levels. The pair can then drop to the support line of the triangle.
Ether (ETH) broke above the 20-day EMA ($1,198) on July 7 and reached upper resistance at $1,280 on July 8. The bears are defending this resistance aggressively and attempting to push the price below the 20-day EMA.
If they do, the ETH/USDT pair could decline to the support line of the ascending triangle. This is an important level to keep an eye on as a break and close below it could invalidate the bullish setup. This could drag the price towards the important support level of $881.
Conversely, if the price bounces off the 20-days EMA and breaks above $1,280, it will complete a bullish ascending triangle pattern. Then the pair can rise to the 50-day SMA ($1,470) and later rebound to the pattern target at $1,679.
BNB broke and closed above the 20-day EMA ($233) on July 6, but the bulls are struggling to push the price above the 50-day SMA ($262). This suggests that bears are active at a high level.
Sellers are trying to pull the price below the 20-day EMA. If they can pull it off, the BNB/USDT pair could slide towards a strong support at $211.
On the other hand, if the price rebounds from the 20-day EMA, it would indicate that the sentiment is turning positive and the bulls are buying on the downside. The bulls will then attempt to drive the price above the 50-day SMA and regain control. This could clear the way for a potential rally to $300.
Ripple (XRP) attempted to break the resistance line of the symmetrical triangle, but the bears had other plans. They aggressively defended the level and are trying to push the price back below the 20-day EMA ($0.33).
If they succeed, the XRP/USDT pair could extend its stay inside the triangle for some more time. The 20-day EMA and the RSI near the midpoint do not give a clear advantage to the buyers or sellers.
A break and close above the triangle could signal the start of a new up-move. The pair may then rebound to the pattern target of $0.48. Alternatively, a break below the triangle could open the doors for another test at $0.28.
Cardano (ADA) rose above the 20-day EMA ($0.47) on July 8, but the bulls could not sustain the higher levels. This indicates that the bears are aggressively defending the moving average.
Sellers will attempt to build on their gains by pulling the price below the strong support at $0.44. If they manage to do so, the ADA/USDT pair could decline towards the crucial $0.40 level. A break and close below this support could signal the start of the next leg of the downtrend.
For this bearish outlook to be invalidated, buyers will need to push and hold the price above the 50-day SMA ($0.51). If they manage to do this, the pair can rebound to $0.60, and then to $0.70.
Buyers attempted to push the Solana (SOL) above the 50-day SMA ($38.79) on July 5 and 6, but could not clear the barrier. This shows that bears are selling at rallies.
Price is being squeezed inside a symmetrical triangle. This points to a possible range expansion in the near term. If the price turns down and breaks the bottom of the triangle, the SOL/USDT pair may slide towards the key support at $26.
Conversely, if the price rises and breaks the resistance line of the triangle, it would suggest that the bulls have the upper hand. The pair may then rebound to the psychological level of $50, where the bears can once again create a strong defense.
Dogecoin (DOGE) attempted to break above the 50-day SMA ($0.07) on July 8, but the bears did not budge. Sellers are trying to use the opportunity to push the price below the 20-day EMA ($0.07).
The RSI is near the midpoint and the 20-day EMA has flattened out, suggesting a balance between buyers and sellers. This balance could tilt in favor of the bulls if they push the price higher and sustain above the 50-day SMA. Such a move could clear the way for a rally near $0.08 and $0.09.
Conversely, if the price declines and breaks below $0.06, the bears will attempt to pull the DOT/USDT pair towards the important support at $0.05.
related: DOGE Days of Summer: Shiba Inu Gains 40% on Dogecoin Two Months After Record Drop
dot / usdt
Polkadot (DOT) attempted to break above resistance at the 20-day EMA ($7.38) on July 7, but the bears held off. This indicates that bears are active at higher levels.
The bears will try to pull the price towards the important support at $6.36. This is an important support for the bulls, as a break and close below it could signal a resumption of the downtrend. The DOT/USDT pair could then decline to the psychological level of $5.
This downside view may be invalidated if the price rises and rises above the 20-day EMA. If this happens, the pair may attempt a rally to the 50-day SMA ($8.38). This level could again act as a resistance, but if the bulls break this barrier, it could signal a possible trend reversal.
Tight range trading in the Shiba Inu (SHIB) resolved to an upside on July 7 as the price broke the immediate resistance at $0.0000011. The bears tried to push the price below $0.00011 on July 8th, but a long tail on the candlestick indicates strong buying on the dips.
Buyers will try to push the price above the tough resistance level of $0.000012. If they succeed, it would indicate demand at higher levels. The SHIB/USDT pair could then rally to $0.0000014 where the bears could once again present a strong challenge.
Conversely, if the price declines from the current levels and remains below $0.0000011, it would indicate that the breakout on July 7 could be a bull trap. The bears will then try to pull the price back below the crucial support level of $0.0000010. If this happens, the next stop could be $0.000009.
Avalanche (AVAX) has been trading between $13.71 and $21.35 for the past few days, indicating a bottom formation. The 20-day EMA ($18.78) has flattened out and the RSI is just above the midpoint, which indicates a balance between bulls and bears.
If buyers drive the price above the overhead resistance at $21.35, it would signal the start of a new up-move. The AVAX/USDT pair is likely to rally towards the pattern target of $29, where the bears may again establish a strong resistance. If the price declines from this level but does not drop below $21.35, it could mean a downside break to $13.71.
Contrary to this sentiment, if the price breaks below current levels and breaks below the 20-day EMA, it would indicate that range-bound action may continue for a few more days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should do your own research when making a decision.
Market data is provided by hitBTC Exchange.