Bitcoin and most major altcoins are bouncing off strong support levels, indicating possible accumulation by the bulls.
Price analysis 7/14: BTC, ETH, BNB, ADA, XRP, DOGE, DOT, UNI, BCH, LTCPRICE ANALYSIS
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.
Daily cryptocurrency market performance. Source: Coin360
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.
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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).
BTC/USDT daily chart. Source: TradingView
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.
ETH/USDT daily chart. Source: TradingView
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.
BNB/USDT daily chart. Source: TradingView
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.