The S&P 500 Index experienced a significant increase of approximately 2% last week, reaching an 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 managed to stay above the critical support level of $56,552.
Bitcoin’s weakness has led to a pullback in several altcoins, which some investors see as an opportunity to buy. According to a report from CoinShares on July 8, digital investment products saw inflows of $441 million last week.
The main question on investors’ minds is whether the correction is over or if Bitcoin will continue to fall. While it’s difficult to say for certain, some analysts believe that a bottom may be near. Analysts from Bitfinex exchange stated in their July 8 report that Bitcoin may have formed a local bottom.
Will the Bitcoin bulls be able to prevent a drop to $50,000? Will altcoins start to recover? Let’s analyze the charts to gain a better understanding of the current technicals at play.
S&P 500 Index Price Analysis
The S&P 500 Index is currently experiencing a strong uptrend, consistently reaching new all-time highs. This indicates that the bulls are firmly in control.
In the near term, there is a minor negative as the relative strength index (RSI) has entered overbought territory, suggesting a potential minor correction or consolidation. The 20-day exponential moving average (EMA) at 5,461 is expected to provide strong support. If the price bounces off this level, the index may reach 5,750 and then 6,000.
To prevent further upside, bears need to quickly push the price below the 20-day EMA, which could tempt short-term bulls to book profits. Increased selling pressure may then bring the index down to the 50-day simple moving average (SMA) at 5,320.
U.S. Dollar Index Price Analysis
The bulls attempted to keep the U.S. Dollar Index (DXY) above the resistance level of 105.74, but the bears had different plans.
Strong selling pressure caused the price to drop below the 20-day EMA (105) on July 3. This encouraged the bears to maintain their pressure, resulting in the index falling below the 50-day SMA (105) on July 5. This suggests that the bulls are losing their grip.
The bears will try to strengthen their position further by pushing the price towards the crucial support level at 104. Buyers are expected to defend this level strongly. 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 support level of $56,552, but the bears were unable to maintain the momentum and bring the price below $53,485.
The tail on the July 8 candlestick indicates that the bulls are aggressively defending the zone between $56,552 and $53,485. The BTC/USDT pair could rise to the 20-day EMA ($60,625), which is an important resistance level to watch out for.
If the price sharply breaks down from the 20-day EMA, it would indicate negative sentiment and traders selling on rallies. This would put the $53,485 support level at risk of breaking down, with the next support level at $50,000.
On the other hand, if buyers push the price above the 20-day EMA, it would suggest that the pair could trade within the range of $53,485 to $73,777 for some time.
Ether Price Analysis
Ether (ETH) has fallen to the solid support level of $2,850 for the second time in the past four days, indicating strong selling pressure from bears.
If the $2,850 support level breaks, selling pressure may increase, and the ETH/USDT pair could experience a downward movement towards $2,200. Bulls are expected to strongly defend this level.
Alternatively, if the price bounces off the current level and rises above $3,110, it would signal the start 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 suggest that the pair may continue to trade within the range of $2,850 and $4,094 for some time.
BNB Price Analysis
Bears are attempting to initiate a new downtrend by pushing BNB below $460, but bulls are trying to hold on to the support level.
Buyers need to push and maintain the price above the 20-day EMA ($553) to indicate 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 would signal the start of a deeper correction. The pair may then drop to $400 and subsequently to $360.
Solana Price Analysis
Solana (SOL) has been forming a descending triangle pattern, which will be completed if the price breaks and closes below $116.
The downsloping moving averages suggest that bears have the advantage, but the positive divergence on the RSI indicates that bulls are attempting a comeback. The first sign of strength would be a break and close above the moving averages, which could lead to a rally towards the downtrend line.
However, bears are likely to try to push the price below $116 to complete the bearish setup. If successful, the SOL/USDT pair could drop to $100 and then $80.
XRP Price Analysis
XRP’s recovery halted at $0.45 on July 6, suggesting a lack of demand at higher levels.
The price is now near the solid support level at $0.41. If the price turns up from this level, it would indicate strong defense from the bulls. They would then attempt to break the overhead hurdle at $0.46.
On the downside, if the $0.41 level breaks, the XRP/USDT pair may retest the July 5 low of $0.38. Bulls need to protect this level as a breakdown could lead to a further drop to $0.30.
Toncoin Price Analysis
Toncoin (TON) has been consolidating in an uptrend, with the price stuck between $6.77 and $8.29 for the past few days.
The TON/USDT pair started a strong recovery from $6.36 on July 5, but encountered 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 of $6.77 and $6.36 without a fight. If the price rebounds from this zone and rises above the 20-day EMA, bulls will once again attempt to push the pair towards the resistance of the range.
Dogecoin Price Analysis
Dogecoin’s relief rally failed to reach the breakdown level of $0.12, indicating that bears are selling on every minor rise.
Bulls are expected to fiercely defend the zone between $0.10 and $0.08. If this zone is breached, the DOGE/USDT pair may plummet to $0.06. The deeper the fall, the longer it will take for the next rally to begin.
If the price rises from the current level, bears will try to halt the recovery at $0.12. If buyers overcome this barrier, the pair may rally to 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 on rallies.
The downsloping moving averages favor bears, but the positive divergence on the RSI suggests that selling pressure could be reduced. Bulls will attempt to push the price towards the resistance line of the channel. A break and close above the channel would suggest the start of a strong recovery.
However, if the price turns down and breaks below the channel, it would indicate an increase in bearish momentum. The ADA/USDT pair may then drop to $0.25.
Please note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making a decision.