The S&P 500 Index experienced a 2% increase last week, reaching a new all-time high. On the other hand, Bitcoin saw an 11% decline during the same period, resulting in its lowest weekly close in four months. This indicates that Bitcoin has been underperforming compared to the stock market recently. However, there is some hope for Bitcoin bulls as the price managed to stay above the crucial support level of $56,552.
The weakness in Bitcoin has led to a pullback in several alternative coins, 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.
The main question on investors’ minds is whether the correction in Bitcoin is over or if it will continue to decline. While it’s difficult to say for certain, some analysts believe that a bottom may be near. Analysts from the Bitfinex exchange stated in their July 8 report that Bitcoin may have reached a local bottom.
Will the Bitcoin bulls be able to prevent a drop to $50,000? Will alternative coins 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 experiencing a strong upward trend, consistently reaching new all-time highs. This indicates that the bulls are firmly in control.
One minor concern in the near term is that the relative strength index (RSI) has entered overbought territory, suggesting a potential minor correction or consolidation. The 20-day exponential moving average (5,461) is likely to provide strong support. If the price bounces off this level, the index may reach 5,750 and potentially 6,000.
To prevent further upside, bears must quickly push the price below the 20-day EMA. If they succeed, it may tempt short-term bulls to book profits, resulting in increased selling pressure and a potential drop to the 50-day simple moving average (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 pushed the price below the 20-day EMA (105) on July 3. This encouraged the bears to maintain their pressure, leading to a drop below the 50-day SMA (105) on July 5. This suggests that the bulls are losing their grip.
The bears will try to further strengthen their position by pushing the price to the critical 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 a period of time.
Bitcoin Price Analysis:
On July 7, Bitcoin closed below the support level of $56,552, but the bears couldn’t maintain the momentum to push 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.
If the price sharply breaks down from the 20-day EMA, it will indicate negative sentiment and traders selling on rallies. This will put the $53,485 support level at risk of breaking down, with the next support level at $50,000.
However, if buyers 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 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 start a downward movement towards $2,200. Bulls are expected to vigorously defend this level.
Alternatively, if the price bounces off the current level and rises above $3,110, it will 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 will indicate that the pair may continue to trade within the range of $2,850 to $4,094 for some time.
BNB Price Analysis:
Bears are attempting to start a new downtrend by pushing BNB below $460, but bulls are trying to hold onto the support level.
Buyers must 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 will signal the start of a deeper correction. The pair may then drop to $400 and subsequently $360.
Solana Price Analysis:
Solana has been forming a descending triangle pattern, which will complete on a break and close below $116.
The downsloping moving averages suggest that bears have the upper hand, but the positive divergence on the RSI indicates that bulls are attempting a comeback. The first sign of strength will 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, indicating a lack of demand at higher levels.
The price has reached a near-solid support level at $0.41. If the price turns up from this level, it will signal that bulls are fiercely defending the $0.41 support. Bulls will then make another attempt to surpass 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 may lead to a further drop to $0.30.
Toncoin Price Analysis:
Toncoin has been consolidating in an uptrend, 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 indicates that bears are active at higher levels.
Bulls are unlikely to give up the support zone of $6.77 to $6.36 without a fight. If the price rebounds from this zone and rises above the 20-day EMA, bulls will once again try to push the pair towards the range resistance.
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 vigorously defend the zone between $0.10 and $0.08, as a breakdown may cause the DOGE/USDT pair to 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 towards the 50-day SMA ($0.14), signaling a potential trend change in the near term.
Cardano Price Analysis:
Cardano has been falling within a descending channel pattern, indicating that bears are selling on rallies.
The downsloping moving averages give bears an advantage, but the positive divergence on the RSI suggests that selling pressure may decrease. Bulls will once again try to push the price towards the channel’s resistance line. A break and close above the channel will indicate the start of a strong recovery.
However, if the price turns down and breaks below the channel, it will 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.