Bitcoin and select altcoins are starting to recover, but selling at the top of each price breakout suggests
Bitcoin and select altcoins are starting to recover, but selling at the top of each price breakout suggests that bears remain in control.
After the sharp fall on Aug. 17, Bitcoin (BTC) remained stuck inside a tight range over the weekend. This suggests indecision between the bulls and the bears about the next directional move.
After the latest fall, about 88% of Bitcoin held by Short-term Holders (STHs), owning Bitcoin for 155 days or less, has plunged into loss, according to Glassnode’s weekly newsletter, “The Week On-Chain.” Glassnode warns that the STH cohort is “increasingly price sensitive.”
In comparison, the long-term holders have neither panicked nor gone on a shopping spree during the current fall.
Traders are likely to keep a close watch on the United States Federal Reserve Chairman Jerome Powell’s speech at the annual Jackson Hole Economic Symposium on Aug. 25. If Powell does not spring a negative surprise, then the event may turn out to be bullish for risky assets. History suggests that U.S. stocks generally rise in the week after Jackson Hole.
What are the important support and resistance levels to watch for in Bitcoin and altcoins? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index (SPX) is correcting in an uptrend. Typically pullbacks are a buying opportunity in an uptrend but it is prudent to wait for the correction to end before resuming the purchases.
The price has reached the breakout level of 4,307, which is an important level to keep an eye on. The moving averages are on the verge of a bearish crossover and the relative strength index (RSI) is in the negative territory, indicating that bears are trying to seize control.
A bounce off the current level is again likely to face selling at the moving averages. If the price turns down from the moving averages, the index will be at risk of forming a bearish head and shoulders pattern.
On the contrary, a rally above the moving average will indicate that the corrective phase may be over.
U.S. dollar index price analysis
The U.S. dollar index (DXY) recovered to the downtrend line where the bears are posing a strong challenge. However, the index has not lost ground, indicating that the bulls have kept up the buying pressure.
If buyers propel the index above the downtrend line, it will suggest that the bears are losing their grip. The index could then resume its recovery and reach the stiff overhead resistance at 106. This level is again likely to attract strong selling by the bears.
The moving averages are the important support to watch out for on the downside. The bears will have to sink the price below the 50-day simple moving average (102) to signal a comeback. That could open the doors for a retest of the strong support near 101.
Bitcoin price analysis
Bitcoin has been consolidating inside a large range between $24,800 and $31,000 for the past several weeks. Inside a range, traders buy the dips to the support and sell near the overhead resistance. In between, trading may be random and volatile.
The moving averages have turned down and the RSI is in the oversold territory, indicating that bears are firmly in control. Sellers will try to build upon their advantage by yanking the price below $24,800 but the bulls are unlikely to give up easily.
The buyers will try to start a recovery from the support, which is likely to pick up momentum above $26,833. The BTC/USDT pair may then rise to the 20-day EMA ($28,098), signaling that the range-bound action remains intact.
Ether price analysis
Ether’s (ETH) bounce is struggling to rise above $1,700, indicating that the bears have not given up and are selling on minor rallies.
A shallow bounce usually indicates a lack of urgency among the bulls to buy. That increases the risk of a breakdown below the support. If the price turns down and slips below $1,626, it will suggest that bears remain in command. The ETH/USDT pair may then retest the intraday low of $1,550 made on Aug. 17.
Contrarily, if the price turns up from the current level and rises above $1,700, it will suggest the start of a stronger recovery. The first stop may be the 20-day EMA ($1,777) but if this level is crossed, the pair may reach the 50-day SMA ($1,852).
BNB price analysis
BNB (BNB) tumbled below the vital support at $220 on Aug. 17 and the bears have managed to defend the level since then. This suggests that the bears are trying to flip the $220 level into resistance.
The price crashed below the immediate support at $212 on Aug. 21, indicating the resumption of the downtrend. The BNB/USDT pair could first plummet to the pattern target of $196 and eventually to the next major support at $183.
Time…
cointelegraph.com
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