Consolidation from BTC has opened the door for BNB, UNI, FIL and THETA to run higher.
Bitcoin (BTC) has made a strong comeback in the month of July and is on track for its best monthly gains since October 2021. The sharp recovery in Bitcoin and several altcoins pushed the Crypto Fear and Greed Index to 42/100 on July 30, its highest level since April 6.
Investors seem to be making the most of the depressed levels in Bitcoin. Data from on-chain analytics firm Glassnode shows that Bitcoin in exchange wallets has dropped to 2.4 million Bitcoin in July, down from the March 2020 levels of 3.15 million Bitcoin. This has sent the metric to its lowest level since July 2018.
Bloomberg Intelligence senior commodity strategist Mike McGlone highlighted that the United States Federal Reserve’s indication to consider rate hikes on a “meeting by meeting basis” may lay the groundwork for Bitcoin to outperform most assets. He said that Bitcoin’s “risk vs. reward tilted favorably for one of the greatest bull markets in history.”
Could Bitcoin extend its rally in the short term and could that trigger buying in select altcoins? Let’s study the charts of the top-5 cryptocurrencies that may outperform in the near term.
BTC/USDT
Attempts by the bulls to sustain the price above $24,276 have failed in the past two days, indicating that the bears are defending the level with vigor. However, a minor positive is that the bulls have not ceded ground to the bears.
This indicates that the bulls are not booking profits in a hurry as they expect a break above the overhead resistance. If the price breaks and closes above $24,276, the BTC/Tether (USDT) pair could pick up momentum and rally toward $28,171. This level may act as a resistance, but if bulls overcome the barrier, the next stop could be $32,000.
The upsloping 20-day exponential moving average (EMA) of $22,480 and the relative strength index (RSI) in the positive territory indicate that bulls have the upper hand.
To invalidate this bullish view in the short term, the bears will have to sink the price below the 20-day EMA. That could clear the path for a possible drop to the 50-day simple moving average (SMA) of $21,386 and then to the support line. A break below this level will suggest that bears are back in command.
The 4-hour chart shows that bulls pushed the price above the overhead resistance of $24,276 but could not build upon the breakout. The bears pulled the price back below the level but are struggling to sink the pair below the 20-EMA. This indicates that bulls are buying on dips.
If the price rebounds off the current level, the bulls will have another shot at the overhead zone between $24,276 and $24,668. If this zone is scaled, the bullish momentum could pick up further. Conversely, if bears sink the price below the 20-EMA, the pair could drop to the 50-SMA.
BNB/USDT
Binance Coin (BNB) broke above the downtrend line on July 28, indicating a potential trend change. The up-move is facing resistance near the psychological level of $300, but a positive sign is that the buyers have not given up much ground. This suggests that the bulls are not hurrying to book profits.
The upsloping 20-day EMA of $263 and the RSI in the positive territory indicate that the path of least resistance is to the upside. If buyers drive the price above $300, the BNB/USDT pair could resume its uptrend toward the overhead resistance at $350.
Alternatively, if the price turns down and breaks below $285, the pair could drop to the downtrend line. The 20-day EMA is placed close to this level, hence it becomes an important support to keep an eye on. If bears sink the price below the 20-day EMA, the pair could decline to the 50-day SMA of $239.
The pair turned down from the overhead resistance at $300 but the bulls are attempting to defend the 20-EMA. This indicates buying on dips. The bulls may again attempt to push the price above $300. If they manage to do that, the uptrend could resume. The pair could rise to $311 and then to $322.
This positive view could invalidate in the short term if the price turns down and breaks below the 20-EMA. If that happens, the pair could slide to the 50-SMA. The buyers are expected to defend this level aggressively because a break and close below it could open the doors for a decline to $239.
UNI/USDT
Uniswap (UNI) rebounded off the breakout level of $6.08 on July 26, indicating strong buying on dips. The up-move reached near the psychological resistance at $10 on July 28 where the bears are mounting a strong defense.
The upsloping moving averages and the RSI in the positive territory indicate an advantage to buyers. If the price rebounds off $8.11, it will suggest that buyers are trying to flip this level into support.
A strong rebound off $8.11 could open the doors for a retest at $10. The bulls will have to clear this overhead hurdle to indicate the start of the next leg of the up-move to $12.
Conversely, if the price turns down and breaks below $8.11, the UNI/USDT pair could drop to the 20-day EMA of $7.48. A break and close below this level will suggest that the bullish momentum has weakened.
The 4-hour chart shows that the bulls are attempting to defend the 20-EMA. If the price turns up from the current level and rises above $9.18, the pair could challenge the overhead resistance zone between $9.83 and $10.
Alternatively, if the price breaks below the 20-EMA, it will suggest that supply exceeds demand. The pair could then drop to the zone between $8.11 and the 50-SMA. This is an important zone for the bulls to defend because if they fail to do that, the short-term momentum could tilt in favor of the bears.
( Rakesh Upadhyay, Cointelegraph, 2022 )