Bitcoin (BTC) bulls have successfully defended the $30.000 level for the past few days, but the failure to achieve a strong recovery has some traders worried that the price will eventually drop to new lows.
In a series of tweets, Ecoinometrics said the current fix “looks very similar to 2013” when Bitcoin took 197 days to reach a new historic high and a bottom formed after a 69% correction of the historic high.
If history repeats itself, investors may need to be patient because the current fix has only been in play for 95 days. At $30.000, Bitcoin has just dropped 54% from its all-time high, and a 69% correction could sink it to $20.000.
In a new report, Delphi Digital highlighted that trading activity has collapsed, with spot currency volumes falling more than 60% from May highs. The derivatives market has also seen an exodus of leverage traders and open Bitcoin futures are back to early 2021 levels.
Delphi Digital sees this as a bullish signal, as it believes that "the strongest players are the ones who contribute primarily to current levels of open interest."
Let's study the charts of the top 5 cryptocurrencies that can perform better in the short term.
In this article, we will discuss:
BTC / USDT
Bitcoin is trying to rebound from $31.000 support, but the long fuse in today's chandelier suggests buying dries up at higher levels. Bears will once again try to sink the price below the $31.000 support.
The 20-day exponential moving average ($33.174) is falling and the relative strength index (RSI) is in the negative zone, suggesting that bears have the upper hand. If sellers sink the price below $31.000, the BTC/ USDT it could drop to the next support at $28.000.
The $31.000-$28.000 zone is critical for bulls, because if this zone breaks, sentiment will sour further and could lead to a long sell-off. That could intensify sales and result in a drop to $20.000.
Contrary to this assumption, if bulls maintain the rally and push the price above the 50-day simple moving average ($34.925), it will signal that the selling pressure is easing. This could increase the possibility of a break above $36.670.
Bulls pushed the price above 20-EMA on the 4-hour chart but failed to overcome the hurdle on the 50-SMA. This suggests that bears continue to sell higher. Bears will try again to sink the price below the $31.000 support.
If successful, the pair could drop to $30.000 and then to $29.000. The first sign of strength will be a pause and close above 50-SMA. The short-term bias will shift in favor of bulls if the pair rallies above the downtrendline.
MATIC/USDT
Polygon (MATIC) has been corrected in the last few days and the price has reached the strong support zone at $0,74 to $0,68. Bulls tend to aggressively defend this zone.
Although the moving averages are falling, the RSI is trying to rebound from oversold territory. This suggests that aggressive bulls are trying to initiate a relief rally.
The first upside resistance is the 20-day EMA ($1). If the price turns down from this level and breaks below the support zone, the downtrend may resume and the pair MATIC /USDT can drop to $0,54 and then $0,34.
Alternatively, if bulls push the price above the 20-day EMA, the pair could rise to the 50-day SMA ($1,26). A break above this resistance could open the door for a move higher to $1,71.
The $0,78 rebound is facing resistance at the 20-EMA on the 4-hour chart. This suggests that bears are unwilling to give up their advantage and are selling higher. Bears will now try to sink the pair to $0,74.
On the other hand, if the price rises from the current level, bulls will once again try to push the price above 20-MME. If they manage to do that, the pair could move up to 50-SMA. Above that resistance, the rally of relief could reach $1,05.
THETA/USDT
THETA has been in a downtrend since it peaked at $15,88 on April 16th. The bearish move hit the strong support zone at $4,57 to $3,85, which could attract buying.
Downward-sloping moving averages suggest that bears are in charge, but oversold levels on the RSI indicate the possibility of a rally against the trend. The first positive resistance is the 20-day EMA ($5,68).
If the price drops from this resistance, the bears will make one more attempt to sink the THETA/USDT pair below the support zone. A break below $3,85 will signal the start of the next leg of the downtrend, which could reach $2,60.
Conversely, if bulls push the price above the 20-day EMA, the pair could rally to the downtrendline. A break of this resistance will suggest a possible trend change.
The pair has been consolidating in a narrow range between $4,33 and $4,62. The RSI has formed a positive divergence on the 4-hour chart, indicating that the bearish momentum may be weakening.
If bulls push and hold the price above 20-EMA, the pair could rise to 50-SMA. This level could act as a resistance, but if buyers can overcome this hurdle, the pair could rally to the next $6 over-resistance.
On the other hand, if bears sink and keep the price below $4,33, the selling could intensify and the pair could drop to psychological support at $4.
CRO/USDT
Crypto.com's (CRO) currency has fluctuated between $0,14 and $0,08 in recent days. The price dropped from $0,13 on July 14th, but the positive sign is that bulls are trying to lock in the correction near the moving averages.
Both moving averages have flattened out and the RSI is just below the midpoint, indicating a balance between supply and demand. If the price drops from its current level and breaks below $0,10, the pair could slide into strong support at $0,08.
On the other hand, if bulls push and hold the price above the moving averages, the CRO/USDT pair could rise to the resistance zone at $0,13 to $0,14. Bears will likely defend this zone aggressively. If the price falls from this zone, range-bound action may continue for a few more days.
Bears pulled the price down from support by $0,108 but failed to take advantage. The price rebounded and rose to 20-EMA, but bulls were unable to overcome this hurdle. This suggests that bears have not given up and are selling higher.
If the bears sink and keep the price below $0,108, the pair could start its journey towards critical support at $0,08.
Conversely, if bulls raise the price above 20-EMA, the pair could rise to 50-SMA. A break above this level will increase the possibility of a new test of the air resistance zone.
LEO/USD
The Unus Sed Leo (LEO) has been trading near the resistance of the $2,03 to $2,95 wide range for the past few days. Typically, a strong consolidation near the overload resistance indicates that bulls are not taking profits as they anticipate a breakout.
Both moving averages rose and the RSI is above 63, indicating an advantage for buyers. If bulls keep the price above $2,96, the LEO/USD pair could start its journey towards the next resistance at $3,32.
This positive view will be invalidated if the price falls from its current level and falls below the 20-day EMA ($2,78).
Such a move will suggest that buyers have given up on the prospect of a breakout and are taking profits. This could pull the price into the 50-day SMA ($2,59).
The 4-hour chart shows that the tight consolidation between $2,85 and $2,95 has shifted to the positive side. If buyers hold the price above $2,96, bullish momentum could intensify and the pair could rise to $3,10 in the short term.
The 20-EMA has started to rise gradually and the RSI is above 62, indicating a small advantage for the bulls. Contrary to this assumption, if the price drops below $2,80, the pair could drop to $2,67.