The weakness in the U.S. Dollar Index bodes well for Bitcoin and altcoins in the near term.
The weakness in the U.S. Dollar Index bodes well for Bitcoin and altcoins in the near term.
Bitcoin has been struggling to rise and sustain above the $31,000 level for the past few days, but Standard Chartered has painted a bullish picture for this year and the next. In a report, the bank said that Bitcoin (BTC) could reach $50,000 this year and stretch the rally to $120,000 by the end of next year.
Large investors seem to be taking a bullish stance and are making the most of the stagnant Bitcoin prices. Behavioral analytics platform Santiment shows that sharks and whales, entities holding between 10 and 10,000 Bitcoin, have increased their hoarding by 71,000 Bitcoin since mid-June.
While the long term looks bullish, macroeconomic indicators hold the key in the short term. The United States equities market is likely to be influenced by the second-quarter earnings and the inflation data due to be released on July 12. That is likely to set the stage for a risk-on or a risk-off sentiment.
Could the S&P 500 Index (SPX) resume its rally over the next few days? Will Bitcoin and the altcoins follow the equities markets higher? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The bulls are trying to protect the 20-day exponential moving average (4,373) but the long wick on the July 7 candlestick shows that bears are active at higher levels.
The relative strength index (RSI) has started to form a negative divergence, indicating that the bullish momentum may be weakening. That could result in a minor correction or consolidation for a few days.
If the 20-day EMA crumbles, the index may decline to 4,325. This is an important level for the bulls to defend because a break below it may sink the index to the 50-day simple moving average (4,257).
This bearish view will be negated if the price turns up from the current level and soars above 4,457. That will signal the resumption of the uptrend. The index could next rally to 4,650.
U.S. dollar index price analysis
The U.S. dollar index skidded back below the moving averages on July 7, which suggests that the bears have kept up the pressure.
The index could next slump to the support at 101.92. Buyers are expected to defend this level with vigor because a break below it may challenge the vital support at 100.82.
This is an important level to keep an eye on but if it breaks down, the index will complete a descending triangle pattern. That could signal the resumption of the next leg of the downtrend.
Conversely, if the price rebounds off 101.92, the bulls will again try to overcome the barrier at 103.57. If they can pull it off, the index may climb to the downtrend line. A break and close above this level will invalidate the bearish setup, signaling that the bulls are on a comeback.
Bitcoin price analysis
Bitcoin bounced off the 20-day EMA ($29,886) on July 7 but returned to retest the level on July 10. The repeated retest of a support level within a short time tends to weaken it.
If bulls want to prevent a fall, they will have to propel the price to the overhead resistance zone between $31,000 and $31,500. This zone is likely to attract strong selling but if bulls overcome this obstacle, the BTC/USDT pair may rally to the next major resistance at $40,000.
Contrarily, if the price turns down and plunges below the 20-day EMA, it may tempt several short-term bulls to book profits. The pair could then descend to the 50-day SMA ($28,170). Such a deep correction will suggest that the pair may remain stuck between $24,800 and $31,500 for a while longer.
Ether price analysis
The bulls are trying to guard the 50-day SMA ($1,841) but they are struggling to propel Ether (ETH) above the 20-day EMA ($1,871). This suggests that the bears are not willing to give up their advantage.
Both moving averages have flattened out and the RSI is near the midpoint, signaling a balance between supply and demand. If buyers kick the price above the 20-day EMA, the ETH/USDT pair may climb to the overhead resistance at $2,000.
Alternatively, if the price tumbles below the 50-day SMA, the bears will try to yank the price to $1,700. This level may act as a support but if it gives way, the pair could extend its slide to the vital support at $1,626.
BNB price analysis
The bulls successfully held the support at $230 and pushed BNB (BNB) above the 20-day EMA ($241) on July 10. This indicates solid buying at lower levels.
If bulls sustain the price above the 20-day EMA, it will suggest that the selling pressure is reducing. The BNB/USDT pair may then attempt a rally to the overhead resistance zone between $257 to $265. The bears are expected to fiercely defend the zone.
If the price turns down from the…
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