**Bitcoin and Market Analysis: A Fresh Perspective**
On August 5, Bitcoin (BTC) dipped below the critical psychological threshold of $50,000, triggering a wave of anxiety among traders in the wake of a downturn in the Japanese stock market. Data from Coinglass reveals that over $1.08 billion in leveraged positions were liquidated.
The pressing question for traders now is whether this correction will deepen or if a relief rally is on the horizon. Notable analyst Rekt Capital commented on X, suggesting that Bitcoin’s “downside deviation” could persist for approximately two months.
While some experts anticipate further declines, FXPro’s senior market analyst, Alex Kuptsikevich, indicated to Cointelegraph that Bitcoin could potentially plummet to $42,000.
Daily cryptocurrency market performance. Source: Coin360
Bitcoin has broken from its established range, yet it’s worth noting that initial breaks often turn out to be false signals. Markets can swiftly reverse, catching traders unawares. Should this scenario unfold, a short squeeze might occur within the coming days.
So, what resistance levels must the bulls overcome to ensnare the aggressive bears? Let’s delve into the charts for insights.
**S&P 500 Index Analysis**
The S&P 500 Index experienced a decline, closing beneath the 50-day simple moving average (5,448) on August 2, signaling a shift in short-term trends.
SPX daily chart. Source: TradingView
On August 5, the index saw a steep gap down. However, a silver lining is that lower price points are drawing in buyers. If the index can rise and maintain above 5,265, it might rally towards the moving averages, which serve as a crucial resistance level to monitor.
Conversely, if the price retreats from the moving averages, it would indicate a bearish sentiment, with rallies being sold off. The bears would then likely aim to drag the price down to the psychological level of 5,000.
**US Dollar Index Analysis**
The US Dollar Index (DXY) faced a downturn from the 20-day exponential moving average (104.22) on August 2, falling below the channel’s support line.
DXY daily chart. Source: TradingView
Currently, the index is seeking support at 102.35. Buyers will attempt to push the price back to the channel’s breakdown level. However, if the price falls from this level, it would signal that bears have converted it into resistance, increasing the likelihood of a drop to 102 and potentially 101.
To stave off declines, buyers must maintain the price above the 20-day EMA.
**Bitcoin Price Analysis**
Bitcoin’s sideways movement resolved downward, breaking below the strong support level of $55,724, indicating traders are rushing to exit.
BTC/USDT daily chart. Source: TradingView
The long tail on the candlestick suggests that bears are struggling to keep prices low, indicating that selling pressure is waning. Bulls will strive to reclaim the $55,724 mark. If successful, this would signal a rejection of the breakdown, potentially triggering a short squeeze and pushing the BTC/USDT pair towards the moving averages.
For bears to retain control, they must defend the $55,724 level, as failure to do so could see the pair slide back to critical support at $49,000 and eventually $42,000.
**Ether Price Analysis**
Ether (ETH) fell sharply below the $2,850 support on August 4, forming a descending triangle pattern.
ETH/USDT daily chart. Source: TradingView
On August 5, selling intensified, bringing the price closer to the psychological support level of $2,000. A minor positive is that bulls have stepped in to buy the dip, as indicated by the long tail on the candlestick.
The RSI’s oversold condition also hints at a potential relief rally in the near future, possibly bringing the ETH/USDT pair back to the $2,850 breakdown level. However, if the price fails to reach this level, it may signal weak buying interest, increasing the risk of a drop below $2,000.
**BNB Price Analysis**
BNB’s (BNB) recent price action remained confined between $495 and $635 until it broke down on August 5, signaling bearish control.
BNB/USDT daily chart. Source: TradingView
Despite this, the long tail on the candlestick indicates strong buying near $400. The RSI’s oversold reading suggests that the selling may have been excessive, and a relief rally could be imminent.
If the BNB/USDT pair manages to rise above the breakdown level of $495, it would indicate a rejection of the breakdown. However, this optimistic outlook would be negated if the price sharply declines from $460, potentially leading to further falls to $400 and $350.
**Solana Price Analysis**
Solana (SOL) has been fluctuating between $116 and $210 for several months, showcasing a pattern of buying on dips and selling on rallies.
SOL/USDT daily chart. Source: TradingView
The price recently bounced off solid support at $116, indicating bullish activity at lower levels. The SOL/USDT pair could target the moving averages, a key resistance level to watch.
Should the price retract from the moving averages, bears will likely aim to push the pair below $116. A successful attempt could result in further declines to $100 and possibly $80.
Conversely, a close above the moving averages would suggest diminishing selling pressure, allowing the pair to remain within its broader range for additional days.
**XRP Price Analysis**
XRP’s (XRP) drop below the 50-day SMA ($0.52) on August 5 indicates that it may remain within the expansive range of $0.41 to $0.64 for some time.
XRP/USDT daily chart. Source: TradingView
In such a range, traders typically buy near support and sell close to resistance. Bulls are likely to defend the $0.46 to $0.41 zone vigorously, as a break below could lead to declines to $0.35 and $0.30.
To signal a continuation of range-bound action, a break and close above the 50-day SMA would be a positive development. After failing to breach the lower end of the range, the XRP/USDT pair could then rise towards resistance at $0.64.
**Dogecoin Price Analysis**
Dogecoin (DOGE) fell below the $0.10 psychological support on August 5, indicating bearish dominance.
DOGE/USDT daily chart. Source: TradingView
The price rebounded from the $0.08 support, suggesting that bulls are attempting to halt the decline. The DOGE/USDT pair may rise to $0.10 and then towards the moving averages. A significant rebound would indicate the potential end of the downtrend and the beginning of a range-bound phase.
However, if the price retraces from $0.10, it would signal weak buying interest, raising the likelihood of a drop to $0.06.
**Toncoin Price Analysis**
Toncoin (TON) formed a double top pattern after falling below $6.77 on July 25. The inability of bulls to reclaim this level intensified selling on August 2.
TON/USDT daily chart. Source: TradingView
On August 5, the TON/USDT pair reached critical support at $4.72, which may serve as solid support. Buyers have initiated a relief rally, potentially pushing the price up to $5.50 and then $6.36. The RSI’s oversold condition also suggests the possibility of a bounce soon.
This optimistic outlook would be undermined if the price turns down from overhead resistance and breaks below $4.72, potentially intensifying selling and dragging the pair down to around $3.50.
**Cardano Price Analysis**
Cardano (ADA) fell below the vital support level of $0.32 on August 5, but buying interest emerged at lower levels, as indicated by the long tail on the candlestick.
ADA/USDT daily chart. Source: TradingView
The sharp sell-off in recent days has pushed the RSI into the oversold territory, suggesting a possible relief rally is on the horizon. This recovery could test the moving averages, where sellers are likely to reappear. A significant downturn from the moving averages could see the ADA/USDT pair drop to the $0.24 support.
Buyers will need to propel the pair above the downtrend line to indicate a potential trend reversal.
*Disclaimer: This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before acting.*