Bitcoin (BTC) briefly extended its recovery above $24,000 and the altcoins continued to make smart gains on July 20, but the bullish momentum of the week experienced a brief setback after Tesla’s earnings report showed the company had sold 75% of its BTC position.
Although the sharp breakout of this week is a positive sign, analysts were quick to point out that a sustained recovery depends on a strong performance from Wall Street. Analyst Venturefounder pointed out that the rally was largely macro-driven and Bitcoin’s correlation with NASDAQ remained at a historical high of 91%.
Bitcoin’s sharp rally in the past few days has awakened hibernating bulls who are dishing out lofty targets. Analyst TechDev projected a target of $120,000 in 2023, while Galaxy Digital CEO Mike Novogratz told a Bloomberg conference on July 19 that Bitcoin could soar above $500,000 within the next five years.
Daily cryptocurrency market performance. Source: Coin360
Nevertheless, analysts remain divided in their near-term expectations and some are unconvinced that the trend has turned. These traders believe that the current rise is a bear market rally. On the other hand, some analysts expect the up-move to continue in the short term. On-chain data firm Whalemap suggests that the rally could extend to $27,100.
Could Bitcoin and major altcoins continue their rise or will bears trap the bulls and sink the price lower? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin broke and closed above the 50-day simple moving average (SM($22,966) and the overhead resistance at $23,363 on July 19. This indicates a potential trend change.
BTC/USDT daily chart. Source: TradingView
If buyers sustain the price above $23,363, the bullish momentum could pick up further and the BTC/USDT pair could rally to the pattern target of $28,171. This level may witness profit-booking from short-term traders.
The 20-day exponential moving average (EMA)($21,461) has started to turn up and the relative strength index (RSI) has risen into the positive territory. This indicates an advantage to buyers.
To invalidate this positive view, the bears will have to pull the price below the 20-day EMA. If they do that, it will indicate that the recent breakout may have been a bull trap.
ETH/USDT
Ether’s (ETH) recovery has reached near the strong overhead resistance at $1,700. The bears tried to pull the price down on July 19 but the bulls did not give up much ground. This suggests that traders are not booking profits aggressively as they anticipate a move higher.
ETH/USDT daily chart. Source: TradingView
The moving averages have completed a bullish crossover and the RSI is near the overbought zone. This suggests that the path of least resistance is to the upside. If buyers drive the price above $1,700, the ETH/USDT pair could rise to the psychological level at $2,000 and then to $2,200.
Contrary to this assumption, if the price turns down from $1,700 and breaks below $1,493, the bears will attempt to pull the price toward $1,280.
BNB/USDT
TheBNB relief rally is nearing the downtrend line, which could act as minor resistance. The moving averages have completed a bullish crossover and the RSI is near the overbought territory, indicating an advantage to buyers.
BNB/USDT daily chart. Source: TradingView
If the price turns down from the current level or the downtrend line, the BNB/USDT pair could drop to the 20-day EMA ($244). This is an important level to keep an eye on because a strong bounce off it will suggest that bulls are buying on dips.
That increases the likelihood of a breakout of the downtrend line. If that happens, the pair could rise to $300 and then to $350.
Contrary to this assumption, if the price turns down and breaks below the moving averages, it will suggest that the sentiment remains bearish and traders are selling on rallies.
XRP/USDT
The relief rally in Ripple (XRP) could face resistance at the overhead resistance at $0.39 as bears attempt to pull the price back below the moving averages.
XRP/USDT daily chart. Source: TradingView
If the XRP/USDT pair rebounds off the moving averages, it will suggest that the sentiment has turned positive and traders are buying on dips. The bulls will then make another attempt to clear the overhead hurdle and push the price to $0.45. This level could again attract strong selling by the bears.
The positive view could invalidate in the short term if the price plummets below the moving averages. If that happens, the pair could again drop to the vital support at $0.30.
ADA/USDT
The bears tried to stall Cardano’s (ADA) recovery near the 50-day SMA ($0.50) on July 19 but the bulls had other plans. They purchased the dip to the 20-day EMA ($0.47) and pushed the price above the overhead resistance.
ADA/USDT daily chart. Source: TradingView
The up-move is facing resistance at $0.55, which could pull the ADA/USDT pair to the 20-day EMA. The gradually rising 20-day EMA and the RSI in the positive territory indicate advantage to buyers.
If the price rebounds off the 20-day EMA, the bulls will again attempt to clear the overhead hurdle. If they succeed, the rally could reach $0.62.
Another possibility is that the price turns down from the current level and remains stuck between the $0.44 to $0.55 range for a few days.
SOL/USDT
Solana’s (SOL) recovery is facing resistance at $48 as seen from the long wick on the July 19 candlestick. This suggests that bears continue to sell at higher levels.
SOL/USDT daily chart. Source: TradingView
If bulls do not cede much ground to the bears, it will improve the prospects of a break above the overhead resistance. The gradually upsloping 20-day EMA ($38) and the RSI in the positive zone indicate advantage to buyers. A break and close above $48 could open the doors for a possible rally to $60.
Contrary to this assumption, if the price turns down sharply from the current level, the SOL/USDT pair could drop to the moving averages. The bears will have to sink the pair below the support line to gain the upper hand.
DOGE/USDT
Dogecoin (DOGE) broke and closed above the 50-day SMA ($0.07) on July 19 but the rally is facing resistance near $0.08 as seen from the long wick on July 20 candlestick.
DOGE/USDT daily chart. Source: TradingView
The moving averages are on the verge of a bullish crossover and the RSI is in positive territory, indicating that bulls have the upper hand. If the price rebounds off the 20-day EMA ($0.06), the bulls will again try to clear the overhead hurdle at $0.08 and push the DOGE/USDT pair toward $0.10.
Alternatively, if the price breaks below the moving averages, the pair could drop to $0.06. A bounce off this level could keep the pair range-bound between $0.06 and $0.08 for a few days.
DOT/USDT
Polkadot’s (DOT) recovery reached the 50-day SMA ($7.73) on July 18 but the bulls are struggling to overcome this barrier. This suggests that the bears are defending this level aggressively.
DOT/USDT daily chart. Source: TradingView
The 20-day EMA ($7.21) is flattish and the RSI is in the positive territory, indicating a minor advantage to buyers. If the price turns down from the current level but rebounds off the 20-day EMA, it will suggest that dips are being bought. The bulls will then strive to push the price toward $10.
This positive view could invalidate in the short term if the price turns down and breaks below the 20-day EMA. The DOT/USDT pair could then drop to the crucial support at $6.36.
MATIC/USDT
Polygon’s (MATIC) up-move in the past few days pushed the RSI deep into the overbought zone, indicating that the rally may have been overheated in the short term. That may have attracted profit-booking near the psychological level of $1.
MATIC/USDT daily chart. Source: TradingView
The price could drop to the 20-day EMA ($0.68), which is likely to act as strong support. The rising 20-day EMA and the RSI in the positive zone suggest that bulls have the upper hand.
If the price rebounds off the 20-day EMA, it will indicate that the sentiment has turned positive and the bulls are buying on dips. The bulls will then attempt to push the price above $1. If they succeed, the MATIC/USDT pair could rally to the overhead resistance at $1.20.
Conversely, a break and close below the 20-day EMA could tilt the advantage in favor of the bears.
AVAX/USDT
Avalanche (AVAX) broke out of the ascending triangle pattern on July 18 indicating the start of a new up-move. However, the long wick on the July 19 and 20 candlestick shows that bears are selling at higher levels and will try to pull the price to the breakout level at $21.35.
AVAX/USDT daily chart. Source: TradingView
The moving averages have completed a bullish crossover and the RSI is in the positive zone, indicating advantage to buyers. If the price rebounds off $21.35, it will suggest that bulls have flipped the level into support. That could resume the uptrend toward the pattern target of $29.
This positive view could invalidate if the price turns down and plummets below $21.35. Such a move will suggest that bears continue to sell on rallies. The pair could then drop to the support line.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Source: Cointelegraph
