Traders took a hands-off approach to Bitcoin and altcoins until BTC managed to push the $20,000 level back into support.
Bears are attempting to sink Bitcoin (BTC) below $19,000 to further cement their dominance in the cryptocurrency market. Analysts looking at bitcoin’s MVRV-Z score, a measure of how high or low bitcoin’s price is relative to “fair value,” expect a deeper decline before an eventual bottom.
However, economist, trader and entrepreneur Alex Krueger noted that Bitcoin’s trading volume hit an all-time high in June. Typically, the highest volume in a downtrend signals capitulation and “creates a major bottom.” If Bitcoin follows the historical pattern of the 2018 bear market, Kruger expects a bottom to form in July.
Daily view of cryptocurrency market data. Source: Coin360
Crypto traders will have to pay close attention to the performance of U.S. stocks next week due to the close correlation between Bitcoin and the S&P 500, which could be influenced by the release of minutes from the Federal Reserve’s last meeting, as well as the June jobs report.
Can Bitcoin Form Higher Lows and Lead the Crypto Market on a Path to Recovery? Let’s take a look at the charts of the top 5 cryptocurrencies that suggest a possible relief rally in the near term.
Bitcoin/USDT
The long wick on Bitcoin’s July 1 candlestick suggests that bears continue to sell on a rally near the 20-day exponential moving average ($21,396). Although the bears dragged the price below $19,637, they were unable to build on this momentum.
BTC/USDT daily chart. Source: TradingView
The bulls are trying to push the price back above $19,637. If they are successful, the BTC/USDT pair could rise again to the 20-day EMA. A breakout and close above $22,000 could signal a potential trend change. Then, the pair could try to rally towards the 50-day simple moving average ($25,938).
Conversely, if the price turns down from current levels, it will show that the bears are still in control. Sellers will then work to pull the price below $18,626. If they do, the pair could slide to the important support area of $17,960 to $17,622.
This is an important defensive area for the bulls as failure to do so could start the next downtrend. Then, the pair could drop to $15,000.
BTC/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the bears are aggressively defending the 20-day EMA. Both moving averages are sloping down and the Relative Strength Index (RSI) is in negative territory, suggesting that bears have the upper hand. A break below $18,626 could further strengthen the bears.
This bearish view could be negated in the near term if the bulls push the price above the 20 EMA. The pair could then rise to the 50 SMA and the bears could pose a strong challenge again. If the price rises above this resistance, the pair could rally to $21,000 and then to $22,000.
SHIB/USDT
Shiba Inu (SHIB) has been trading in a tight range around the moving averages as the bulls attempt to form higher lows near $0.000009. Usually, a narrow range trade is followed by a range expansion.
SHIB/USDT daily chart. Source: TradingView
If the price breaks above the 50-day SMA ($0.000010), the SHIB/USDT pair is likely to pick up momentum and rally to $0.000012 and then to $0.000014. A breakout and close above this level could signal a potential change in trend.
Contrary to this assumption, a break below $0.000009 could lure bulls who could buy above the 50-day SMA. This could clear the way for a retest of $0.000007. A break below this key support could signal a resumption of the downtrend.
SHIB/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the formation of a symmetrical triangle pattern. The pair has been stuck between the 20 EMA and the support line of the triangle. If the bears sink and sustain the price below the support line, the pair could drop to $0.000009. A break below this support could indicate that the bears are back in the driver’s seat.
Conversely, if the bulls push the price above the 20 EMA, the pair could rise to the resistance line of the triangle. If this level is broken, the pair could rise to $0.000011 before heading towards $0.000012.
MATIC/USDT
Polygon (MATIC) retreated from strong overhead resistance at $0.61 on June 26, and the bears pulled the price below the 20-day EMA ($0.50) on June 28. A small positive is that the bulls did not allow the bears to continue their advantage and bought the dip on June 30.
MATIC/USDT daily chart. Source: TradingView
Since then, the MATIC/USDT pair has been trading around the 20-day EMA. This shows that the bulls are trying to push the price back above this level. If they are successful, the pair could make another attempt to clear the $0.61 hurdle.
The RSI is showing a positive divergence, indicating that the bears may be losing control. A break above $0.61 could clear the way for a possible rally to $0.75.
Contrary to this assumption, if the price turns down from current levels and breaks below $0.41, it would suggest that the near-term recovery could be a bear market rally. Sellers will then attempt to pull the price back towards the key support level of $0.31.
MATIC/USDT 4-hour chart. Source: TradingView
Buyers pushed the price above the downtrend line and the 20 EMA, but were unable to clear the psychological level of $0.50. This attracted selling, with the bears pulling the price to $0.45. If this support breaks, a retest of $0.41 is likely.
Conversely, if the price bounces off current levels, it will indicate that the bulls are buying the dips. The bulls will then make another attempt to clear overhead resistance at $0.50. If they are successful, the pair could rally to $0.55 and then to $0.61.
Bitcoin’s Negative Correlation With USD Hits New 17-Month High – What’s Next for BTC?
Atom/USDT
Cosmos (ATOM) is trying to form a bottom after a prolonged downtrend. Buyers pushed the price above the 20-day SMA ($7.84) on July 1, but the 50-day SMA ($8.81) could act as a strong barrier.
ATOM/USDT daily chart. Source: TradingView
The flat 20-day EMA and RSI near the midpoint suggest that selling pressure may be diminishing. If buyers push the price above the 50-day SMA, bullish momentum could pick up and the ATOM/USDT pair could rally to $10.84 and then to $12.50. A breakout and close above this level could indicate a potential trend change.
This bullishness could be invalidated in the short-term if the price turns down from current levels and breaks below $6.89. If this happens, the pair could retest the key support at $5.55.
ATOM/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the bulls are attempting to turn the 50-SMA into support. If the price rises from current levels and breaks above $8.38, the bulls are likely to challenge the immediate resistance at $8.75. A break above this level could signal a resumption of the uptrend. The pair may then rise to $9.
Conversely, if the price turns down and breaks below the moving averages, it will indicate that the bears are continuing to sell at higher levels. The pair could then slide towards $7.18 and then $6.89.
Ape/USDT
Buyers pushed ApeCoin (APE) higher and closed above the 20-day EMA ($4.69) on June 27, but they were unable to build on the recovery. The bears pulled the price back below the 20-day EMA on June 29, but a positive sign is that the bulls have not given up much ground.
APE/USDT daily chart. Source: TradingView
This shows that buyers are not selling their positions as they are anticipating a move higher. The flattening 20-day EMA and the RSI just below the midpoint suggest that selling pressure may be diminishing.
If buyers push prices above the 20-day EMA, it could tip the advantage in their favor. The APE/USDT pair could then rally to the 50-day SMA ($5.72), where the bears are expected to mount a strong defense.
Contrary to this assumption, if the price turns down from current levels and breaks below $4.21, the next stop loss might be $3.85.
APE/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows a symmetrical triangle, indicating indecision between buyers and sellers. Both moving averages are flat and the RSI is close to the midpoint, indicating equilibrium.
If the price breaks below the triangle, it will show that the bears have established their dominance. The pair could then drop to the pattern target of $3.78.
Alternatively, if the price rises from the current levels and breaks out of the triangle, it could be a favorable signal for the bulls. The pair could then rise to $5.38 and then $5.57.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk and you should do your own research when making a decision.
Source of information: Compiled from COINTELEGRAPH by 0x information.The copyright belongs to the author Rakesh Upadhyay and may not be reproduced without permission