Bitcoin (BTC) has been trading in a narrow range for the past few days, signaling a period of consolidation. However, analysts note that the range has formed near the recent local high, suggesting that the bulls are not rushing to exit their positions as they anticipate another leg higher. The market dominance of Bitcoin has also declined to 48% from over 50% on June 30, indicating that market participants have been gradually shifting their focus to select altcoins, which are starting to show upward movement. Despite the recovery of altcoins, traders are advised to keep a close watch on Bitcoin’s price action, as a sharp downturn in Bitcoin could trigger a sell-off in altcoins.
Bitcoin’s Support and Resistance Levels
Technical analysis of Bitcoin’s price charts reveals important support and resistance levels to watch out for. Currently, Bitcoin is struggling to break above the 20-day exponential moving average (EMA) of $29,670, indicating bearish pressure. If the bears manage to pull the price below the immediate support at $28,861, the BTC/USDT pair could remain range-bound between $31,000 and $24,800 for some time. The downsloping 20-day EMA and the negative relative strength index (RSI) support this bearish view. However, if the bulls drive the price above the 20-day EMA, the pair could rise to the resistance zone between $31,000 and $32,400, signaling the start of a new uptrend towards $40,000.
Dogecoin Faces Resistance but Remains Bullish
Dogecoin (DOGE) is facing resistance just above the $0.08 level, but the bulls have held their ground and have not given up much of their gains. The dip in price on July 28 was quickly bought by the bulls, indicating positive sentiment and a willingness to buy the dips. If the bulls manage to propel the price above the recent intraday high, the DOGE/USDT pair could gain momentum and rise to $0.10 and subsequently to $0.11. On the other hand, if the price turns down and falls below the 20-day EMA, it would suggest that the bears are selling on rallies, and the pair could slide to the breakout level of $0.07.
Maker Breaks Above Overhead Resistance
Maker (MKR) has finally broken above the stiff overhead resistance at $1,200 after being stuck below it for several months. However, it is common for prices to retest breakout levels after a significant move. In this case, if the price drops to the breakout level of $1,200 and sharply turns up from there, it will indicate that the bulls have converted it into support. The MKR/USDT pair may then initiate a new uptrend towards $1,600 and subsequently $1,900. Conversely, if the bears sustain the price below $1,200, it could suggest a bull trap, and the pair may drop to the 20-day EMA at $1,079, signaling a bearish trend.
Optimism Shows Signs of Uptrend
Optimism (OP) is showing signs of a potential uptrend, with the 20-day EMA starting to turn up and the RSI in positive territory. Currently, there is minor resistance at $1.66, but if the price clears this level, the OP/USDT pair could rise to $1.88 and then $2. However, if the price turns down from $1.66, it will indicate selling pressure from bears, and the pair may drop to the 20-day EMA and potentially descend further to the 50-day SMA at $1.33.
XDC Network’s Strong Uptrend
The XDC Network (XDC) has experienced a strong uptrend, surging from $0.03 to $0.06 within a span of two weeks. The price may experience a correction to the 38.2% Fibonacci retracement level of $0.05, followed by the 20-day EMA at $0.05. A strong bounce off this zone would confirm bullish sentiment and may lead to a resumption of the uptrend. A rally above the July 27 intraday high could open the gates for a move towards $0.10. However, if the price breaks below the 20-day EMA, the bullish outlook would be invalidated.
While Bitcoin continues to consolidate, altcoins are showing signs of recovery. Traders should closely monitor Bitcoin’s price action to gauge the direction of the overall market. Technical analysis suggests potential opportunities for gains in altcoins like Dogecoin, Maker, Optimism, and the XDC Network, but caution should be exercised as market conditions remain uncertain.