The weakness in the U.S. Dollar Index bodes well for Bitcoin and altcoins in the near term.
Bitcoin has been struggling to rise and sustain above the $31,000 level for the past few days, but Standard Chartered has painted a bullish picture for this year and the next. In a report, the bank said that Bitcoin (BTC) could reach $50,000 this year and stretch the rally to $120,000 by the end of next year.
Large investors seem to be taking a bullish stance and are making the most of the stagnant Bitcoin prices. Behavioral analytics platform Santiment shows that sharks and whales, entities holding between 10 and 10,000 Bitcoin, have increased their hoarding by 71,000 Bitcoin since mid-June.
While the long term looks bullish, macroeconomic indicators hold the key in the short term. The United States equities market is likely to be influenced by second-quarter earnings and the inflation data due to be released on July 12. That is likely to set the stage for a risk-on or a risk-off sentiment.
Could the S&P 500 Index (SPX) resume its rally over the next few days? Will Bitcoin and altcoins follow the equities markets higher? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The bulls are trying to protect the 20-day exponential moving average (EMA) of 4,373, but the long wick on the July 7 candlestick shows that bears are active at higher levels.
The relative strength index (RSI) has started to form a negative divergence, indicating that the bullish momentum may be weakening. That could result in a minor correction or consolidation for a few days.
If the 20-day EMA crumbles, the index may decline to 4,325. This is an important level for the bulls to defend because a break below it may sink the index to the 50-day simple moving average (SMA) of 4,257.
This bearish view will be negated if the price turns up from the current level and soars above 4,457. That will signal the resumption of the uptrend. The index could next rally to 4,650.
U.S. Dollar Index price analysis
The U.S. Dollar Index (DXY) skidded back below the moving averages on July 7, which suggests that the bears have kept up the pressure.
The index could next slump to the support at 101.92. Buyers are expected to defend this level with vigor because a break below it may challenge the vital support at 100.82.
This is an important level to keep an eye on, but if it breaks down, the index will complete a descending triangle pattern. That could signal the resumption of the next leg of the downtrend.
Conversely, if the price rebounds off 101.92, the bulls will again try to overcome the barrier at 103.57. If they can pull it off, the index may climb to the downtrend line. A break and close above this level will invalidate the bearish setup, signaling that the bulls are on a comeback.
Bitcoin price analysis
Bitcoin bounced off the 20-day EMA ($29,886) on July 7 but returned to retest the level on July 10. The retest of a support level within a short period of time tends to weaken it.
If bulls want to prevent a fall, they will have to propel the price to the overhead resistance zone between $31,000 and $31,500. This zone is likely to attract strong selling, but if bulls overcome this obstacle, the BTC/USDT pair may rally to the next major resistance at $40,000.
Contrarily, if the price turns down and plunges below the 20-day EMA, it may tempt several short-term bulls to book profits. The pair could then descend to the 50-day SMA ($28,170). Such a deep correction will suggest that the pair may remain stuck between $24,800 and $31,500 for a while longer.
Ether price analysis
The bulls are trying to guard the 50-day SMA ($1,841), but they are struggling to propel Ether (ETH) above the 20-day EMA ($1,871). This suggests that the bears are not willing to give up their advantage.
Both moving averages have flattened out and the RSI is near the midpoint, signaling a balance between supply and demand. If buyers kick the price above the 20-day EMA, the ETH/USDT pair may climb to the overhead resistance at $2,000.
Alternatively, if the price tumbles below the 50-day SMA, the bears will try to yank the price to $1,700. This level may act as support, but if it gives way, the pair could extend its slide to the vital support at $1,626.
BNB price analysis
The bulls successfully held the support at $230 and pushed BNB (BNB) above the 20-day EMA ($241) on July 10. This indicates solid buying at lower levels.
If bulls sustain the price above the 20-day EMA, it will suggest that the selling pressure is reducing. The BNB/USDT pair may then attempt a rally to the overhead resistance zone between $257 and $265. The bears are expected to fiercely defend the zone.
If the price turns down from the overhead resistance, it will suggest that the pair may continue to oscillate between $220 and $265 for a while longer. The bears will have to sink and sustain the price below $220 to indicate the start of the next leg of the downtrend.
XRP price analysis
XRP (XRP) remains pinned below the 20-day EMA ($0.48), indicating that the bears are selling on every recovery attempt.
The 20-day EMA is sloping down and the RSI is in negative territory, indicating that bears have the upper hand. Sellers will attempt to strengthen their position by pulling the price below the $0.45 support. If they succeed, the XRP/USDT pair may deepen the correction to the next support at $0.41.
If bulls want to prevent the slide, they will have to quickly thrust and sustain the price above the moving averages. That could open the doors for a possible relief rally to $0.53 and then to $0.58.
Cardano price analysis
Buyers pushed Cardano (ADA) above the 20-day EMA ($0.29) on July 8, but they could not sustain the higher levels. The bears pulled the price back below the 20-day EMA on July 9.
The bulls will have to protect the uptrend line if they want to keep the bullish ascending triangle pattern intact. If the price rebounds off this level, the bulls will again try to drive the ADA/USDT pair above the $0.30 resistance. If they manage to do that, the pair may start a new up move toward $0.35 and then $0.39.
Instead, if the price slips below the uptrend line, it will invalidate the bullish pattern and sink the pair to $0.26. That will indicate a consolidation between $0.24 and $0.30 for some more time.
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Dogecoin price analysis
Buyers are finding it difficult to propel Dogecoin (DOGE) above the 20-day EMA ($0.07), indicating that the bears are defending the level with vigor.
The bears will try to sink the price to the strong support at $0.06. This level is likely to attract buyers. If the price rebounds off this level with strength, it will signal that the DOGE/USDT pair may extend its range-bound action between $0.06 and $0.07 for a few more days.
The next trending move is expected to begin after buyers drive the price above $0.07 or bears sink the pair below $0.06. Until then, random and volatile price action is likely to continue.
Solana price analysis
Solana (SOL) turned down from the immediate resistance at $22, indicating that bears continue to sell on minor rallies.
The SOL/USDT pair could correct to the 20-day EMA ($19.15), which is an important support level to keep an eye on. If the price rebounds off this level, the bulls will again try to clear the overhead hurdle at $22. If they can pull it off, the pair will complete a bullish head-and-shoulders pattern. The pair could then start a rally toward $27.12.
On the contrary, if the price continues lower and plummets below the 50-day SMA ($18.44), several aggressive bulls may get trapped. That could result in long liquidation, pulling the pair near $15.28.
Litecoin price analysis
Buyers tried to arrest Litecoin’s (LTC) correction at the 20-day EMA ($95), but the bears had other plans. Sellers pulled the price below the 20-day EMA on July 10.
The bulls are trying to push the price back above the 20-day EMA, as seen from the long tail on the day’s candlestick. If they do that, the LTC/USDT pair may rise to the psychological level of $100. A break above this resistance could start a stronger recovery toward $106 and then $115.
Conversely, if the price turns down from the current level, it will suggest that the bears are not willing to let go of their advantage. The pair may then descend to the 50-day SMA ($89) and subsequently to $81.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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