The S&P 500 Index experienced a significant increase of approximately 2% last week, reaching a new all-time high. In contrast, Bitcoin saw a decline of 11% during the same period, resulting in its lowest weekly close in four months. This indicates that Bitcoin has been underperforming compared to the equity markets recently. However, there is some consolation for Bitcoin bulls as the price of BTC has managed to stay above the critical support level of $56,552.
The weakness in Bitcoin has led to a pullback in several altcoins, which some investors see as an opportunity to buy. According to a report by CoinShares on July 8, digital investment products received inflows of $441 million last week.
Investors are now wondering whether the correction in Bitcoin is over or if there will be further declines. While it is difficult to say for certain, some analysts believe that a bottom may be near. In their July 8 report, analysts from the Bitfinex exchange suggested that Bitcoin may have formed a local bottom.
The question now is whether the Bitcoin bulls can prevent a drop to $50,000 and if altcoins will start to recover. Let’s examine the charts to gain a better understanding of the current technical situation.
S&P 500 Index Price Analysis:
The S&P 500 Index is currently in a strong uptrend, consistently reaching new all-time highs. This indicates that the bulls are firmly in control.
A minor concern in the near term is that the relative strength index (RSI) has entered the overbought territory, suggesting a potential minor correction or consolidation. The 20-day exponential moving average (EMA) at 5,461 is likely to provide strong support. If the price bounces off this level, the index may reach 5,750 and possibly even 6,000.
However, if the bears manage to push the price below the 20-day EMA, it may entice short-term bulls to take profits. This could lead to increased selling pressure and a decline to the 50-day simple moving average (SMA) at 5,320.
U.S. Dollar Index Price Analysis:
The bulls attempted to maintain the U.S. Dollar Index (DXY) above the resistance level of 105.74, but the bears had other plans.
Strong selling pressure caused the price to fall below the 20-day EMA (105) on July 3. This encouraged the bears to continue their pressure, resulting in a drop below the 50-day SMA (105) on July 5. This indicates that the bulls are losing their grip.
The bears will likely try to further strengthen their position by pushing the price to the crucial support level at 104. Buyers are expected to fiercely defend this level. If the price bounces off 104, the index may consolidate between 104 and 106 for some time.
Bitcoin Price Analysis:
On July 7, Bitcoin closed below the critical support level of $56,552, but the bears were unable to maintain the downward momentum and push the price below $53,485.
The presence of a long tail on the July 8 candlestick suggests that the bulls are aggressively defending the zone between $56,552 and $53,485. This could lead to a rise in the BTC/USDT pair to the 20-day EMA ($60,625), which is an important resistance level to watch.
However, if the price sharply breaks down from the 20-day EMA, it will indicate that sentiment remains negative and traders are selling during rallies. This would put the $53,485 support level at risk of breaking, with the next support level at $50,000.
Alternatively, if buyers manage to push the price above the 20-day EMA, it will suggest that the pair may continue to trade within the range of $53,485 to $73,777 for some time.
Ether Price Analysis:
Ether (ETH) has fallen to the strong support level of $2,850 for the second time in the past four days, indicating significant selling pressure from bears.
If the $2,850 support level is breached, selling may intensify, and the ETH/USDT pair could experience a downward movement towards $2,200. Buyers are expected to defend this level vigorously.
On the other hand, if the price bounces off the current level and rises above $3,110, it will signal the beginning of a relief rally towards the 20-day EMA ($3,272). This is an important level for bears to defend, as a break above it would indicate that the pair may continue to trade within the range of $2,850 to $4,094 for some time.
BNB Price Analysis:
The bears are attempting to initiate a new downtrend by pushing BNB below $460, but the bulls are fighting to hold onto this support level.
Buyers must push and maintain the price above the 20-day EMA ($553) to suggest that the pullback may be over. If successful, the BNB/USDT pair could attempt a rally towards the 50-day SMA ($597).
However, if the price turns down from the current level or the 20-day EMA and breaks below $460, it will signal the start of a deeper correction. In this case, the pair may drop to $400 and subsequently to $360.
Solana Price Analysis:
Solana (SOL) has been forming a descending triangle pattern, which will be confirmed on a break and close below $116.
The downsloping moving averages indicate that bears have the advantage, but the positive divergence on the RSI suggests that bulls are attempting a comeback. The first sign of strength would be a break and close above the moving averages, potentially opening the doors for a rally towards the downtrend line.
However, the bears are likely to have other plans. They will try to push the price below $116 and complete the bearish setup. If successful, the SOL/USDT pair could drop to $100 and potentially even $80.
XRP Price Analysis:
XRP’s recovery stalled at $0.45 on July 6, indicating a lack of demand at higher levels.
The price has now reached the near-solid support level at $0.41. If the price turns upwards from this level, it will indicate that bulls are fiercely defending the $0.41 support. They will then make another attempt to break the overhead resistance at $0.46.
On the downside, if the $0.41 level is breached, the XRP/USDT pair may retest the low of $0.38 from July 5. Bulls must protect this level, as a breakdown could lead to a further decline towards $0.30.
Toncoin Price Analysis:
Toncoin (TON) has been consolidating within an uptrend, with the price ranging between $6.77 and $8.29 in recent days.
The TON/USDT pair initiated a strong recovery from $6.36 on July 5, but encountered significant selling pressure near the 20-day EMA ($7.42). This suggests that bears are active at higher levels.
Bulls are unlikely to give up the support zone between $6.77 and $6.36 without a fight. If the price rebounds from this zone and rises above the 20-day EMA, bulls may attempt to push the pair towards the range’s resistance level.
Dogecoin Price Analysis:
Dogecoin’s relief rally was unable to reach the breakdown level of $0.12, indicating that bears are selling on every minor increase.
Bulls are expected to vigorously defend the zone between $0.10 and $0.08 because a breakdown could send the DOGE/USDT pair plunging to $0.06. The depth of the fall will determine the length of time it takes for the next rally to begin.
If the price rises from the current level, bears will attempt to halt the recovery at $0.12. If buyers overcome this barrier, the pair may rally towards the 50-day SMA ($0.14), signaling a potential trend change in the near term.
Cardano Price Analysis:
Cardano (ADA) has been falling within a descending channel pattern, indicating that bears are selling during rallies.
The downsloping moving averages favor bears, but the positive divergence on the RSI suggests that selling pressure may decrease. Bulls will attempt to push the price towards the resistance line of the channel. A break and close above the channel would indicate the start of a strong recovery.
Conversely, if the price turns downwards and breaks below the channel, it will indicate an increase in bearish momentum. In this case, the ADA/USDT pair may drop to $0.25.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making a decision.