Bitcoin (BTC) has once again held the critical support area at $31,000 today, indicating accumulation at lower levels. This led some analysts to speculate that traders were selling their holdings to investors with a low history of selling in anticipation that “a supply shock” to occur when the re-accumulation process completes.
Another sign of strong hands entering the crypto market was seen when Capital International Group, a $2.3 trillion asset manager, purchased a 12.3% stake in MicroStrategy, which many believe to be a sort of Bitcoin proxy stock because it holds 105,084 Bitcoin on its books. This acquisition suggests the asset manager is taking indirect exposure to Bitcoin.
The United States Consumer Price Index (CPI) surged 0.9% in June 2021 over the previous month and 5.4% from a year earlier, this is the fastest pace in nearly 13 years. However, Bitcoin’s failure to respond positively to the spike in inflation has ignited a debate on Bitcoin’s billing as an inflation hedge. News outlet Fortune said this made Bitcoin a doubtful hedge against inflation.
In a bear phase, the markets usually tend to overlook the triggers in the short term. During such a period, the smart money continues to accumulate and eventually, the price action catches up with fundamentals. Therefore, writing off Bitcoin with only a few months of data may not be the right thing to do.
Let’s study the charts of the top-10 cryptocurrencies to determine the critical support and resistance levels, which may signal the start of the next trending move.
The long tail on Bitcoin’s candlestick today indicates that bulls are defending the $31,000 level aggressively. However, buyers will face a stiff resistance from the bears at the 20-day exponential moving average ($33,973).
If the price turns down from the 20-day EMA, it will suggest that sentiment remains negative and traders are selling on every minor rally. The bears will then make one more attempt to sink the price below $31,000.
If they succeed, the BTC/USDT pair could challenge the next critical support at $28,000. This may be a make-or-break level for the bulls because if it cracks, the selling may intensify. The next major support on the downside is $20,000.
Contrary to this assumption, if bulls thrust the price above the 20-day EMA, the pair could reach the 50-day simple moving average ($35,361). A breakout and close above this level will be the first indication that sellers are losing their grip.
That will also increase the possibility of a break above $36,670. If that happens, the pair could start its journey toward the $41,330 to $42,451.67 resistance zone.
The failure of the bulls to push (ETH) above the 20-day EMA ($2,135) from July 9 to 12 may have attracted selling by short-term traders. That pulled the price below the psychological level at $2,000 on July 13.
However, the bears could not sustain the selling pressure and sink the price to the critical support at $1,738.74. This is a positive sign as it shows buying at lower levels.
The bulls will now once again try to propel the price above the moving averages. If they succeed, the ETH/USDT pair could rally to the downtrend line. A breakout and close above this resistance will indicate a possible change in trend.
On the contrary, if the price turns down from the 20-day EMA, the bears will make one more attempt to sink the price to $1,728.74. A break below this support could start the next leg of the downtrend.
Binance Coin (BNB) slipped below the 20-day EMA ($313) on July 13, indicating that bears are trying to gain the upper hand. However, the long tail on today’s candlestick suggests that bulls are not willing to give up and are buying on dips.
The flat moving averages and the relative strength index (RSI) just below the midpoint suggest a balance between supply and demand. The bulls will have to push and sustain the price above the 50-day SMA ($331) to signal strength.
That will clear the path for an up-move to $379.58 and later to the stiff overhead resistance at $433. On the contrary, if the price turns down from the 50-day SMA, the bears will try to pull the BNB/USDT pair below the $276.40 to $264.26 support zone. If they succeed, the decline could extend to $251.41 and then to $211.70.
The failure of the bulls to push Cardano (ADA) above the 20-day EMA ($1.35) from July 9 to 12 may have resulted in profit-booking by short-term traders. That pulled the price below the $1.28 support on July 13.
The long tail on today’s candlestick suggests that bulls are attempting to defend the support at $1.19. However, the 20-day EMA has started to slope down and the RSI has tumbled below 42, suggesting that bears have the upper hand.
If the price turns down from $1.28, it will indicate selling on minor rallies and that will increase the prospects of a decline to $1.10 and then $1. Alternatively, if bulls push the price above the 20-day EMA, it will signal strength. The ADA/USDT pair may then rise to the 50-day SMA ($1.46).
XRP has gradually drifted down to the horizontal support at $0.59. This is an important level for the bulls because if they fail to defend it, the bears will attack the June 22 low at $0.50.
The declining moving averages and the RSI below 40 suggest that bears are in command. A break and close below $0.50 will open the doors for a possible decline to $0.45 and then to $0.40.
Conversely, if the price rebounds off the current level, the buyers will make one more attempt to clear the hurdle at the 20-day EMA ($0.66). If they manage to do that, the XRP/USDT pair could rise to $0.75. A breakout and close above this level will signal strength.
Dogecoin (DOGE) broke and closed below the $0.21 support on July 12, which suggests that supply exceeds demand. The failure of the bulls to defend $0.21 clears the path for a retest of the critical level at $0.15.
The descending moving averages and the RSI below 36 indicate that bears are in control. If bears pull the price below the $0.15 support, the selling could intensify and the DOGE/USDT pair could drop to $0.10.
However, the $0.15 level has held on two previous occasions, hence the bulls may again try to defend it aggressively. A strong bounce off it could push the price to the overhead resistance at $0.21. A breakout and close above the 20-day EMA ($0.23) will signal that bulls are trying to make a comeback.
Polkadot’s (DOT) tight consolidation between $14.50 and $16.93 ended with a breakdown on July 13, which shows that supply exceeds demand. That pulled the price down to the critical support at $13.
The downsloping moving averages and the RSI below 37 indicate that bears are in control. A break and close below the $13 support will suggest the resumption of the downtrend. The next support is the psychological level at $10.
Conversely, if the price rebounds off the current level, the bulls will try to push the price above $14.50. If they succeed, it will indicate accumulation at lower levels. The first sign of strength will be a break and close above $16.93. If this happens it could set the stage for a strong relief rally.
Uniswap (UNI) broke below the 20-day EMA ($19.81) on July 12, which indicates that bears have overpowered the bulls. There is a minor support at $16.93 but if the level gives in, the altcoin could drop to $15 and then to $13.
The 20-day EMA has started to turn down and the RSI has dropped into the negative zone, indicating the path of least resistance is to the downside. A breakdown and close below $13 will complete a descending triangle pattern, suggesting the start of the next leg of the downtrend.
Contrary to this assumption, if the price rebounds off the current level or $15, the bulls will again try to thrust the price above the downtrend line. If they succeed, the bearish setup will invalidate and the UNI/USDT pair could move up to $25 and then $27.
The tight range trading in Bitcoin Cash (BCH) between $475.69 and $538.11 resolved to the downside on July 13. This suggests that supply exceeds demand as bulls are not confident that a bottom has been made.
Both moving averages are sloping down and the RSI is in the negative territory, suggesting an advantage to the bears. If the price sustains below $475, the BCH/USDT pair could gradually drop to $428 and then to the next major support at $370.
However, the long tail on today’s candlestick suggests that bulls are attempting to push the price back above $475.69. If they manage to do that, it will indicate buying at lower levels. A breakout and close above $538.11 will be the first sign of the start of a stronger relief rally.
Litecoin (LTC) is trading inside a descending triangle pattern that will complete on a breakdown and close below $118. The long tail on today’s candlestick suggests that bulls are attempting to defend the support.
However, both moving averages are sloping down gradually and the RSI is below 40, suggesting that bears are in control. Any relief rally is likely to face stiff resistance at the downtrend line. If the price turns down from this level and breaks below $118, the LTC/USDT pair could resume the downtrend.
The next support on the downside is the psychological level at $100 but if it cracks, the decline could extend to $70. On the contrary, if the bulls drive the price above the downtrend line, it will invalidate the pattern. The pair could then rise to the 50-day SMA ($154) and later to $180.
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.