Bitcoin’s failure to rebound off strong support may open further downside as bears may be tempted to sell.
Bitcoin’s failure to rebound off strong support may open further downside as bears may be tempted to sell.
Bitcoin (BTC) has been trading near the $29,000 level for the past few days. This suggests a lack of strong demand at higher levels but the only solace for the bulls is that they have managed to sustain the price above the immediate support.
The uncertainty about the next directional move may have tempted short-term traders to book profits. CoinShares said in its latest weekly report that Bitcoin investment products witnessed $111 million in outflows, the largest weekly outflows since March.
While the short-term price action remains uninspiring, crypto bulls remain confident that Bitcoin will rally before its next halving in 2024. Blockstream CEO Adam Back said in a conversation on X (previously known as Twitter) that Bitcoin will hit $100,000 by the end of March.
Could Bitcoin extend its decline in the near term or will it turn up? Will the altcoins outperform Bitcoin over the next few days? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index (SPX) is witnessing a tough battle between the bulls and the bears near the 20-day exponential moving average (4,511). Sellers pulled the price below the 20-day EMA on Aug. 2, indicating that the bullish momentum is weakening.
The bulls pushed the price back above the 20-day EMA on Aug. 4 but the bears aggressively sold the rally. This suggests that the bears are pouncing on relief rallies. The index could decline to the 50-day simple moving average (4,414), which could act as a strong support.
The 20-day EMA is flattening out and the relative strength index (RSI) is near the midpoint, indicating a balance between supply and demand. If the price rebounds off the 50-day SMA, it will suggest that lower levels continue to attract buyers. The index may then swing between the 50-day SMA and 4,650 for some time.
U.S. dollar index price analysis
Buyers pushed the U.S. dollar index (DXY) above the 50-day SMA (102) on Aug. 2 but they could not build upon this strength.
The bears pulled the price back below the 50-day SMA on Aug. 4. A minor positive is that the bulls have kept the price above the 20-day EMA (101). If buyers drive the price above the 50-day SMA, the index could retest the downtrend line. This remains the key level to watch on the upside because a break above it could open the doors for a rally to 106.
If bears want to gain the upper hand, they will have to sink and sustain the price below the 20-day EMA. The index could then slide to the strong support at 100.82.
Bitcoin price analysis
Bitcoin’s price is getting squeezed between the 20-day EMA ($29,387) and the horizontal support at $28,861. This low volatile period is likely to be followed by an expansion in volatility.
If the price plunges and sustains below $28,861, it will suggest that the uncertainty has resolved in favor of the bears. The BTC/USDT pair could then start a decline to $26,000 and eventually to $24,800.
Contrarily, if the price turns up and breaks above the 50-day SMA ($29,893), it will suggest that the bulls have overpowered the bears. That could start a rally to the overhead resistance zone between $31,500 and $32,400.
Ether price analysis
The bulls managed to keep Ether (ETH) above the immediate support at $1,816 for the past few days but they are struggling to start a strong recovery. This suggests that demand dries up at higher levels.
The downsloping 20-day EMA ($1,856) and the RSI in the negative territory indicate that bears have the upper hand. If the price slips and sustains below $1,816, the ETH/USDT pair could slump $1,700 and then to the crucial support at $1,626.
If bulls want to make a comeback, they will have to quickly kick the price above the 50-day SMA ($1,877). If they do that, the pair could start its northward march toward the overhead resistance at $2,000.
BNB price analysis
The price action inside a symmetrical triangle pattern is usually random and volatile. BNB (BNB) has been oscillating inside the triangle with no clear advantage either to the bulls or the bears.
Typically, the symmetrical triangle behaves as a continuation pattern but in some cases, it can also start a reversal.
If the price rises above the triangle, it will suggest that the bulls have the upper hand. The BNB/USDT pair could then rise to the overhead resistance at $265. If this level is cleared, the pair may surge to $288.
Another possibility is that the price tumbles below the triangle. The pair may then descend to $220. If this support cracks, the pair may fall to the pattern target of $194.
XRP price analysis
XRP (XRP) continued its correction and dipped below the…
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