In a downtrend, when markets do not respond negatively to bearish news, it is a sign that the selling may have reached exhaustion. Reports of electric vehicle maker Tesla dumping 75% of its Bitcoin (BTC) holdings in the second quarter only caused a minor blip as lower levels attracted strong buying from the bulls.
Tesla was not the only institution that sold its Bitcoin. Arcane Research analyst Vetle Lunde highlighted in a Twitter thread that large institutions have sold 236,237 BTC since May 10.
It is encouraging to note that even after huge selling by institutions and the unfavorable macro environment, Bitcoin has held up quite well.
The current bear market allows an opportunity for new traders to enter at lower levels. A report published by Boston Consulting Group, Bitget and Foresight Ventures shows that only 0.3% of individual wealth is parked in crypto compared to 25% in equities. This shows that crypto is still in the early stages of adoption compared to legacy markets.
Could Bitcoin and major altcoins extend their recovery over the short term? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin slipped below the 50-day simple moving average (SMA) ($22,683) on July 21 but the bulls aggressively bought the dip as seen from the long tail on the day’s candlestick. The buyers are currently attempting to sustain the price above the overhead resistance at $23,363.
The upsloping 20-day exponential moving average (EMA) ($21,729) and the relative strength index (RSI) in positive territory indicate the path of least resistance is to the upside.
If bulls thrust the price above the $23,363 to $24,276 resistance zone, bullish momentum may pick up and the BTC/USDT pair could rally to $28,171 and then to $30,000.
Contrary to this assumption, if the price turns down and breaks below the 20-day EMA, it will suggest that the bears have not yet given up. The sellers will then strive to sink the pair to the support line. A break and close below this support could tilt the advantage in favor of the bears.
ETH/USDT
Ether’s (ETH) pullback ended at $1,605 on July 21. This shallow correction indicates that traders are not hurrying to close their positions as they expect the up-move to continue.
The upsloping 20-day EMA ($1,345) and the RSI near overbought territory indicate an advantage to buyers. The bulls will strive to propel the price above the overhead resistance at $1,700. If they succeed, the ETH/USDT pair could pick up momentum and rally to the psychological level of $2,000.
Alternatively, if the price turns down from $1,700, it will suggest that bears are defending this level aggressively. The pair could then consolidate between $1,600 and $1,700 for a few days. A break below this support could pull the pair to the 20-day EMA.
BNB/USDT
BNB‘s correction took support near the 20-day EMA ($247) on July 21, indicating that bulls are accumulating on dips. The buyers will attempt to push the price above the downtrend line and resume the up-move.
The bullish crossover on the moving averages and the RSI in positive territory indicates that bulls have the upper hand. If the price breaks above the downtrend line, the BNB/USDT pair could rise to $300 and then to $325.
Conversely, if the price turns down from the downtrend line, it will suggest that bears are defending the level with vigor. However, if bulls do not give up much ground from this level, the likelihood of a breakout increases. This bullish view could be negated on a break below the 50-day SMA ($243).
XRP/USDT
Ripple’s (XRP) long tail on the July 21 candlestick shows that bulls are buying on dips to the moving averages. This suggests that the sentiment has shifted from selling on rallies to buying on dips.
The gradually upsloping 20-day EMA ($0.35) and the RSI in positive territory indicate an advantage to buyers. The bulls will attempt to push the price above the immediate resistance at $0.39.
If they succeed, the XRP/USDT pair could extend its rally to the stiff overhead resistance at $0.45. The bears may pose a strong challenge at this level.
A break below the moving averages will invalidate the bullish view. The pair could then consolidate in a large range between $0.30 and $0.39 for a few days.
ADA/USDT
Cardano (ADA) dipped below the 50-day SMA ($0.49) on July 20 but the bears could not pull the price below the 20-day EMA ($0.47). This suggests that lower levels are attracting buyers.
The gradually upsloping 20-day EMA and the RSI in positive territory indicate that the bulls have a slight edge. The buyers will make one more attempt to clear the overhead resistance at $0.55.
If they succeed, the ADA/USDT pair could pick up momentum and start its northward march toward $0.70. Conversely, if the price turns down and breaks below the 20-day EMA, the pair may consolidate between $0.44 and $0.55 for a few days.
SOL/USDT
Solana’s (SOL) pullback from the $48 level took support at the 20-day EMA ($39). The buyers tried to push the price above the overhead resistance on July 22 but met with heavy selling pressure at higher levels.
If the price turns down from the current level or the overhead resistance, the SOL/USDT pair could drop to the moving averages and spend some more time inside the ascending triangle pattern. A break below the support line will invalidate the bullish setup and put the bears back in the driver’s seat.
Conversely, if the price rebounds off the 20-day EMA, the buyers will make one more attempt to clear the overhead hurdle at $48. If they manage to do that, the triangle pattern will complete. The pair could then start an up-move to $60. If this barrier is overcome, the next stop could be the pattern target of $71.
DOGE/USDT
The bears tried to pull Dogecoin (DOGE) below the 20-day EMA ($0.07) on July 21 but the bulls purchased the dip aggressively as seen from the long tail on the candlestick.
This improves the prospects of a break above the overhead resistance at $0.08. If that happens, the DOGE/USDT pair could rally to $0.09 and then to $0.10. The flattish 20-day EMA and the RSI in the positive territory indicate a minor advantage for the buyers.
Contrary to this assumption, if the price turns down from $0.08, it will suggest that bears continue to sell at higher levels. That could keep the pair stuck between $0.08 and $0.06 for some time.
Related: Bitcoin wobbles on Wall Street open as Ethereum hits $1.6K in 6-week high
DOT/USDT
Polkadot (DOT) pulled back to the 20-day EMA ($7.25) on July 21 but the long tail on the day’s candlestick shows that bulls purchased at lower levels.
The bounce off the 20-day EMA is a positive sign and it increases the likelihood of a break above $8.08. If that happens, the DOT/USDT pair could resume its recovery and rally to $8.79 and later to the psychological level of $10.
Contrary to this assumption, if the price turns down from the current level or $8.08, it will suggest that demand dries up at higher levels. The bears will then try to sink the price below the 20-day EMA and challenge the crucial support at $6.
MATIC/USDT
Polygon (MATIC) remains in an uptrend. The pullback that started at $0.98 on July 19 rebounded off the 38.2% Fibonacci retracement level of $0.80. This suggests that sentiment remains positive and traders are buying on dips.
The upsloping 20-day EMA ($0.72) and the RSI in positive territory indicate that buyers have the upper hand. The MATIC/USDT pair could rise to $0.98, where the bears may try to stall the recovery. If the price turns down from this level, the pair may remain range-bound between $0.80 and $0.98 for a few days.
Alternatively, if buyers thrust the price above $0.98, bullish momentum could pick up and the pair could soar to $1.26. The bears will have to sink the price below the 20-day EMA to gain the upper hand.
AVAX/USDT
Avalanche (AVAX) turned down from $26 on July 20 but the bears could not pull the price to the breakout level at $21.35. This suggests that bulls are buying on minor dips.
The rising 20-day EMA ($21.19) and the RSI in the positive zone indicate an advantage to buyers. If bulls drive the price above $26.50, the bullish momentum could pick up and the AVAX/USDT pair could rise to $29 and later to $33.
To invalidate this bullish view, sellers will have to pull the price back below $21.35. If they manage to do that, the pair could slide to the support line which may attract buyers. A break and close below this level could indicate that bears are back in control.
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 conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
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