Bitcoin (BTC) and altcoins are tracking the United States equities markets higher on Aug. 3 as traders buy the dip.
Smaller investors seem to be making the most of the bear market in Bitcoin as the number of wholecoiners has soared by 40,000 since the sharp fall in June. In comparison, wallet addresses with more than 1,000 Bitcoin have declined by 113 since May.
Some analysts believe that Bitcoin has not yet formed a macro bottom, however. Trading firm QCP Capital expects Bitcoin to gradually rise for most of the third quarter amid high volatility.
They believe Bitcoin’s rally could hit a roof around $28,700. For the long-term, the firm did not rule out a final capitulation in Bitcoin to around $10,000, which may mark a bottom for the bear market.
Nevertheless, Bitcoin miners seem to be in an upbeat mode as they increased their Bitcoin holdings in July following the capitulation in June. According to data from on-chain analytics firm CryptoQuant, Bitcoin held by the miners hit the highest levels since.
Could Bitcoin and altcoins resume their up-move or will the recovery falter at higher levels? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin dropped to the 20-day exponential moving average (EMA) ($22,632) on Aug. 2, which is acting as strong support. The gradually up-sloping 20-day EMA and the relative strength index (RSI) in the positive territory suggest that bulls have a slight edge.
The buyers will now attempt to push the price above the overhead resistance at $24,668. If they succeed, the BTC/USDT pair could rally to $28,000 where the bears may mount a stiff resistance. If bulls clear this hurdle, the rally could extend to $32,000.
Contrary to this assumption, if the price turns down from the current level or the overhead resistance, it will suggest that higher levels continue to attract selling from the bears. A break and close below the 20-day EMA could sink the pair to the 50-day simple moving average (SMA) ($21,344) and then to the support line.
Ether (ETH) turned down and dropped to the 20-day EMA ($1,545) on Aug. 2 but the long tail on the candlestick suggests that the bulls aggressively purchased the dip.
The bulls will once again attempt to clear the overhead resistance zone between $1,700 and $1,785. If they succeed, it will indicate a potential trend change. The ETH/USDT pair could then rally to $2,000 and later to $2,200.
To invalidate this bullish view, the bears will have to sink and sustain the price below the 20-day EMA. That could open the doors for a decline to the strong support at $1,280. A bounce off this level could keep the pair stuck between $1,280 and $1,700 for a few days.
Binance Coin (BNB) bounced off the $275 support on Aug. 2, indicating that the sentiment has turned positive and traders are buying on dips.
The bulls will now make one more attempt to push the price above the overhead resistance at $300. If they succeed, the BNB/USDT pair could pick up momentum and rally toward the stiff overhead resistance at $350.
The rising 20-day EMA ($268) and the RSI in the positive territory indicate that the path of least resistance is to the upside. This bullish view could invalidate in the near term if the price turns down and breaks below the 20-day EMA.
The long tail on XRP’s Aug. 3 candlestick indicates that bulls are attempting to defend the 20-day EMA ($0.36). The gradually up-sloping 20-day EMA and the RSI in the positive territory indicate a slight advantage to buyers.
If bulls push the price above the $0.39 to $0.41 resistance zone, the XRP/USDT pair could signal the start of a new up-move. The pair could then rally to $0.48 where the bears may again mount a strong defense.
Contrary to this assumption, if the price turns down from the current level or the overhead resistance, the possibility of a break below the 20-day EMA increases. If that happens, the pair may continue its range-bound action for a few more days.
Cardano (ADA) has been stuck in a large range between $0.40 and $0.55 for the past few days. The bulls are currently attempting to defend the moving averages.
If they succeed, the ADA/USDT pair could climb to the overhead resistance at $0.55. This remains an important level to watch out for. If bulls overcome this barrier, the pair could rally to $0.63 and later on to $0.70.
Alternatively, if the price breaks below the moving averages, the pair could slide to the immediate support at $0.45. A bounce off this level could form a new tighter range between $0.45 and $0.55 while a break below $0.45 could clear the path for a drop to $0.40.
Solana (SOL) dipped below the 20-day EMA ($40) on Aug. 2 and dropped to the 50-day SMA ($37) on Aug. 3. The long tail on the candlestick suggests that traders are defending the support line.
If bulls push and sustain the price above the 20-day EMA, the SOL/USDT pair could gradually climb up to $48. This is an important level to keep an eye on because a break and close above it could complete the ascending triangle pattern that has a target objective of $71.
Conversely, if the rebound lacks strength, the bears will attempt to sink the pair below the support line. If they manage to do that, the bullish setup will be negated and the pair may slide to $31.
The bulls are attempting to arrest Dogecoin’s (DOGE) pullback at the 50-day SMA ($0.07). If the rebound sustains above the 20-day EMA ($0.07), a retest of $0.08 is possible.
The bulls will have to push and sustain the price above $0.08 to signal the completion of an ascending triangle pattern. If that happens, the DOGE/USDT pair could rally to $0.10 and then to the pattern target at $0.11.
On the contrary, if the rebound lacks strength, it will suggest that demand dries up at higher levels. That could pull the price down to the trendline support. A break and close below this level could invalidate the bullish setup.
Related: Lido DAO: Ethereum's biggest Merge staker just jumped 30% — will LDO rally into September?
Polkadot (DOT) turned down from the overhead resistance and dipped to the 20-day EMA ($7.70) where the bulls are trying to stall the pullback.
The gradually up-sloping 20-day EMA and the RSI in the positive territory indicate that bulls have a slight edge. If bulls propel the price above the overhead resistance at $9, the DOT/USDT pair could rally to $10.80 and then to $12.
Alternatively, if the price turns down from the current level or the overhead resistance and breaks below the moving averages, it will suggest that the pair may extend its stay inside the range between $6 and $9 for a few more days.
Polygon (MATIC) bounced off the 20-day EMA ($0.84) on Aug. 2, indicating that bulls are buying on dips. The price could next retest the $0.98 to $1.01 overhead resistance zone.
Although the developing negative divergence on the RSI warrants caution, the up-sloping moving averages indicate advantage to buyers. If bulls clear the overhead resistance zone, the MATIC/USDT pair could rally to $1.26.
On the contrary, if the price turns down and breaks below the 20-day EMA, the pair could drop to the strong support at $0.75. A sharp rebound off this level could keep the pair range-bound between $0.75 and $1 for a few days.
The bears tried to sink Avalanche (AVAX) below the 20-day EMA ($22.71) on Aug. 2 but the bulls held their ground. This indicates that traders are viewing the dips as a buying opportunity.
The bulls will attempt to push the price above the overhead resistance at $26.38. If they succeed, the AVAX/USDT pair could complete a bullish ascending triangle pattern, which has a target objective at $33 and then $38.
Contrary to this assumption, if the price turns down from the current level or the overhead resistance and breaks below the 20-day EMA, the pair could slide to the support line. This is an important level for the bulls to defend because a break and close below it could tilt the advantage in favor of the bears.
Market data is provided by HitBTC exchange.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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