Bitcoin (BTC) rallied to the 200-week moving average on July 8, a level that could act as a battleground between the bulls and the bears. Several analysts are watching this level because a break and close above it could be the first sign that the bear market may be ending.
Bloomberg senior commodity strategist Mike McGlone said that Bitcoin’s 50-week and 100-week moving averages are showing similar signs as made before the 2018 bear market bottom. Therefore, McGlone expects Bitcoin to give a strong rebound in the second half of 2022.
Another positive sign is that Bitcoin rose 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 the DXY may be starting to weaken.
Could Bitcoin extend its recovery pulling the crypto markets higher? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin broke above the resistance line of the symmetrical triangle and the 20-day exponential moving average (EMA) ($21,233) on July 7, indicating that bulls are making a comeback.
The flattening 20-day EMA and the relative strength index (RSI) just below the midpoint suggest that the selling pressure may be reducing.
If the price rebounds off the current level or the breakout level from the triangle, it will suggest that the sentiment has turned positive and traders are buying the dips. That could increase the possibility of a rally to the 50-day simple moving average (SMA) ($25,015) and then to the pattern target at $26,490.
This positive view could invalidate in the short term if the price breaks back below the 20-day EMA and re-enters the triangle. That will indicate aggressive selling by the bears at higher levels. The pair could then drop to the support line of the triangle.
ETH/USDT
Ether (ETH) broke above the 20-day EMA ($1,198) on July 7 and reached the overhead resistance at $1,280 on July 8. The bears are defending this resistance aggressively and are attempting to sink the price back below the 20-day EMA.
If they do that, the ETH/USDT pair could drop to the support line of the ascending triangle. This is an important level to keep an eye on because a break and close below it could invalidate the bullish setup. That could pull the price down toward the critical support at $881.
Conversely, if the price rebounds off the 20-day EMA and breaks above $1,280, it will complete the bullish ascending triangle pattern. The pair could then rise to the 50-day SMA ($1,470) and later rally to the pattern target at $1,679.
BNB/USDT
BNB broke and closed above the 20-day EMA ($233) on July 6 but the bulls are struggling to push the price to the 50-day SMA ($262). This suggests that bears are active at higher levels.
The sellers are trying to pull the price back below the 20-day EMA. If they can pull it off, the BNB/USDT pair could slide to the strong support at $211.
On the other hand, if the price rebounds off the 20-day EMA, it will suggest that the sentiment is turning positive and the bulls are buying on dips. The bulls will then attempt to drive the price above the 50-day SMA and gain control. That could clear the path for a possible rally to $300.
XRP/USDT
Ripple (XRP) attempted a break above the resistance line of the symmetrical triangle but the bears had other plans. They aggressively defended the level and are trying to sink 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 flattish 20-day EMA and the RSI near the midpoint do not give a clear advantage either to buyers or sellers.
A break and close above the triangle could indicate the start of a new up-move. The pair could then rally to the pattern target at $0.48. Alternatively, a break below the triangle could open the doors for a retest at $0.28.
ADA/USDT
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 averages.
The sellers will attempt to build upon their advantage by pulling the price below the strong support at $0.44. If they manage to do that, the ADA/USDT pair could drop to the important level at $0.40. A break and close below this support could indicate the start of the next leg of the downtrend.
To invalidate this bearish view, buyers will have to push and sustain the price above the 50-day SMA ($0.51). If they manage to do that, the pair could rally to $0.60 and then to $0.70.
SOL/USDT
The buyers attempted to push Solana (SOL) above the 50-day SMA ($38.79) on July 5 and 6 but could not overcome the barrier. This suggests that the bears are selling on rallies.
The price is getting squeezed inside a symmetrical triangle. This points to a possible range expansion in the short term. If the price turns down and breaks below the triangle, the SOL/USDT pair could slide toward the critical support at $26.
Conversely, if the price turns up and breaks above the resistance line of the triangle, it will suggest that bulls have the upper hand. The pair could then rally to the psychological level of $50 where the bears may again mount a strong defense.
DOGE/USDT
Dogecoin (DOGE) attempted a break above the 50-day SMA ($0.07) on July 8 but the bears did not relent. The sellers are trying to use the opportunity to sink the price back 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 equilibrium could tilt in favor of the bulls if they push and sustain the price above the 50-day SMA. Such a move could clear the path for a rally to $0.08 and next to $0.09.
Conversely, if the price turns down and breaks below $0.06, the bears will strive to pull the DOT/USDT pair to the vital support at $0.05.
Related: DOGE days of summer: Shiba Inu gains 40% on Dogecoin two months after record lows
DOT/USDT
Polkadot (DOT) attempted to break above the overhead resistance at the 20-day EMA ($7.38) on July 7 but the bears held their ground. This indicates that bears are active at higher levels.
The bears will attempt to pull the price toward the critical support at $6.36. This is an important support for the bulls to watch out for because a break and close below it could indicate the resumption of the downtrend. The DOT/USDT pair could then decline to the psychological level of $5.
This negative view could invalidate if the price turns up and rises above the 20-day EMA. If that happens, the pair could attempt a rally to the 50-day SMA ($8.38). This level may again act as a resistance but if bulls clear this hurdle, it may signal a potential change in trend.
SHIB/USDT
The tight range trading in Shiba Inu (SHIB) resolved to the upside on July 7 as the price broke above the immediate resistance at $0.000011. The bears tried to sink the price back below $0.000011 on July 8 but the long tail on the candlestick indicates strong buying on dips.
The buyers will attempt to push the price above the stiff resistance at $0.000012. If they succeed, it will indicate demand at higher levels. The SHIB/USDT pair could then rally to $0.000014 where the bears may again pose a strong challenge.
Conversely, if the price turns down from the current level and sustains below $0.000011, it will suggest that the breakout on July 7 may have been a bull trap. The bears will then try to pull the price back below the critical support at $0.000010. If that happens, the next stop could be $0.000009.
AVAX/USDT
Avalanche (AVAX) has been trading between $13.71 and $21.35 for the past few days, indicating a bottoming formation. The 20-day EMA ($18.78) has flattened out and the RSI is just above the midpoint, indicating a balance between the bulls and the bears.
If buyers drive the price above the overhead resistance at $21.35, it will signal the start of a new up-move. The AVAX/USDT pair could rally to the pattern target of $29 where the bears may again mount a strong resistance. If the price turns down from this level but does not drop below $21.35, it will suggest that a bottom may have been made at $13.71.
Contrary to this assumption, if the price turns down from the current level and breaks below the 20-day EMA, it will indicate that the 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 conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
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