Bitcoin has been stuck in a tight range throughout August. Checkmate, the chief on-chain analyst at Glassnode, emphasized that the price difference between the upper and lower ranges of Bitcoin’s Bollinger band has narrowed to 2.9%, the third narrowest ever.
Typically, a period of low volatility is followed by a widening range of volatility. The longer it stays in a range, the stronger the eventual breakout of that range will be. The only problem is that it’s hard to time the breakout. Therefore, traders should remain vigilant. Otherwise, they may miss the opportunity to catch the next trend.
One of the reasons risk assets may be under pressure is the strength of the U.S. dollar index (DXY), which has risen for four consecutive weeks.
In contrast, U.S. stocks have entered a correction phase over the past few days.Both the S&P 500 Index (SPX) and the Nasdaq Composite have pull back The past two weeks have suggested that short-term traders are taking profits.
What are the key support and resistance levels to watch for Bitcoin (BTC) and altcoins? Let’s analyze the graph to find out.
S&P 500 Index Price Analysis
After the S&P 500 fell below its 20-day exponential moving average (EMA) of 4,497 on Aug. 3, the bears thwarted multiple attempts by the bulls to push prices back above that level.
On Aug. 14, the price bounced off the 50-day simple moving average (SMA) at 4,443, suggesting that the bulls are defending this level with all their might. Buyers will try to maintain the momentum and push the price back above the 20-day moving average. If they succeed, the index could start rising to 4,607 and then 4,650.
If the bears want to take control, they will have to protect the 20-day SMA and pull the price below the 50-day SMA. This could start a deeper pullback to 4,300 and then 4,200.
US dollar index price analysis
The US dollar index found support at the 20-day moving average ($102) again on Aug. 4 and Aug. 10, indicating a shift in market sentiment from selling on rallies to buying on dips.
The index has hit a downtrend line, which could act as a strong resistance. If the price turns down from the downtrend line but bounces off the 20-day EMA, it will indicate that the trend is still bullish. This will enhance the prospects for a rally above the downtrend line. The index could then surge to the overhead resistance at 106.
This positive view will be invalidated in the short term if the price breaks below the 20-day EMA. There is minor support at 101.74, but if that level breaks down, the index could fall to 100.82.
Bitcoin Price Analysis
On Aug. 13, Bitcoin fell below the 20-day EMA ($29,458), but the bears were unable to take advantage of this and dropped the price to the critical support level of $28,585. This suggests a lack of aggressive selling at lower levels.
A flat 20-day moving average and a relative strength index (RSI) near the midpoint suggest a balance between buyers and sellers. This suggests that the BTC/USDT pair may continue to consolidate in the range between $28,585 and $30,350 for a while.
The next trend move may start after the price breaks out of this range. If the price turns down and breaks below the $28,585 support, it could start a decline towards $26,000. Conversely, a rally above $30,350 could enhance the prospects for a rally to the upper resistance zone between $31,500 and $32,400.
Ethereum Price Analysis
Ethereum (ETH) has been holding firm near its 20-day EMA ($1,853) for the past few days, suggesting that the bulls have maintained buying pressure, but the bears have held their ground.
The 20-day EMA is flattening and the RSI is near the midpoint, suggesting that selling pressure may be easing. If the bulls push the price above the moving averages, the ETH/USDT pair could rally to $1,930 and then to $2,000.
If the bears want to maintain control, they will have to defend the moving averages. If the price turns down from the 50-day moving average ($1,877), the pair could slip to the strong support at $1,816. For bulls, this is an important level to watch out for, as a break below it could take the pair down to $1,700.
BNB price analysis
BNB (BNB) has been trading below the moving averages for the past three days, but the bears have failed to sink the price to the support line of the symmetrical triangle.
If the price does not break above or below the triangle within the next few days, the pattern will be invalidated. The flat moving averages and the RSI just below the midpoint suggest that flat price action may continue for a while.
A breakout and close above the triangle would be the first sign that the uncertainty has resolved, favoring the bulls. Subsequently, the BNB/USDT pair may rally towards the overhead resistance at $265.
On the other hand, a breakout and close below the triangle could take the pair down to the key support at $220.
Ripple Price Analysis
XRP (XRP) has been oscillating between moving averages for the past few days, suggesting buying around the 50-day SMA ($0.62) and selling around the 20-day SMA ($0.65).
Although buyers are holding onto the 50-day SMA, the downsloping 20-day SMA and the RSI in negative territory suggest bears have the upper hand. A small rebound from current levels would increase the probability of a break below the 50-day moving average. If this happens, the XRP/USDT pair could drop to $0.56.
Contrary to this assumption, if the price climbs above the 20-day EMA, it will indicate strong buying at lower levels. The pair could then rise to $0.74.
Cardano Price Analysis
Cardano (ADA) has been correcting within a descending channel pattern for the past few days. This shows a lack of aggressive buying by the bulls.
The first sign of strength will be a breakout and close above the channel resistance line. This could open the doors for a rally to $0.34. If this level is breached, the ADA/USDT pair could retest the July 14 intraday high of $0.38.
The bears may have other plans. They will try to sell on a rise to the resistance line of the channel. If the price turns down from this level, it will indicate that the pair may continue to decline within the channel. An important support level to watch on the downside is $0.26.
related: Bitcoin sees fresh volatility as BTC price hits 4-day high near $29,600
Dogecoin Price Analysis
Dogecoin’s (DOGE) rally was rejected by a downtrend line on Aug. 13, suggesting that the bears are fiercely defending this level.
The price has reached the support line of the ascending channel, which is an important level to watch. If the price breaks below the support line, the DOGE/USDT pair may drop to $0.07.
Conversely, if the price rises from the current levels and breaks the downtrend line, it will indicate that the bulls are still buying at lower levels. The pair may first rise to $0.08 and later to the channel resistance line at $0.09.
Solana Price Analysis
Solana (SOL) is trading between $22.30 (downside) and $26 (upside). A small advantage in favor of the bulls is that the price is trading above the 20-day EMA ($24.09).
If the current rally persists, the bulls will attempt to propel the SOL/USDT pair above the overhead resistance at $26. If they succeed, the pair could accelerate to $29.12 and then to $32.13.
Alternatively, if the price turns down from $26, it would suggest that the pair may stay within the range for a few more days. The bears must pull the price below $22.30 to gain the upper hand.
Polygon Price Analysis
The bulls are finding it difficult to push Polygon (MATIC) above the 20-day EMA ($0.69), but a positive sign is that they have not yet ceded ground to the bears.
The moving averages are flattening out and the RSI is just below the midpoint, suggesting a balance between supply and demand. The balance could tip in favor of the bulls if they push the price above the 50-day moving average ($0.70). Subsequently, the MATIC/USDT pair may attempt a rally towards $0.80.
Conversely, if the price turns down from the 50-day moving average, it will indicate that bears are active at higher levels. This could keep the pair range-bound for a few days. Bears must sink and sustain the price below the support near $0.65 to gain the upper hand. The pair may then drop to $0.60.
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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