Gold continues to trade near its nine-year highs as investors hedge their portfolio against a possible devaluation of the U.S. dollar due to the expansive monetary policy of the Federal Reserve. Bitcoin (BTC), which has long been forecast as digital gold, is not finding favor among investors as it remains highly correlated with the U.S. equity markets.
Daily cryptocurrency market performance. Source: Coin360
One possible reason for investors’ aversion to Bitcoin as a safe haven could be the persistent regulatory uncertainty.
Despite this, Grayscale Investments and Digital Currency Group CEO Barry Silbert said that the risk of a Bitcoin ban has passed as several policy-makers and regulators accept “that Bitcoin has a right to exist and ultimately you can't shut it down."
Bitcoin’s (BTC) range continues to tighten making it extremely difficult to place any logical trades. As the intraday range shrinks, even day trading would become difficult. In such situations, traders usually wait on the sidelines until volatility picks up or a trending move starts.
BTC/USD daily chart. Source: TradingView
When the volume drops, it makes it easier for a large trader or a group of traders to step in and move the markets.
In this case, if the price breaks above $9,500, it could be the first indication of strength. If the bulls who are sitting on the sidelines jump in and buy aggressively above $9,500, it could pose a serious challenge to the $10,000–$10,500 zone, above which a sustained up move is likely.
On the other hand, if the price slips below $8,800, the short-term traders owning long positions might cover them, which could drag the BTC/USD pair to $8,130.58. This is an important level to watch out for because if this support breaks down it could result in a deeper correction.
It is very difficult to predict with certainty which of the above scenarios would play out. Therefore, instead of hazarding a guess, traders can wait on the sidelines and make an entry only after they believe that a strong trending move has started.
The bulls purchased the dip below the moving averages on July 16, which is a positive sign as it shows that the buyers are not willing to wait for Ether’s (ETH) price to drop to the strong support of $216.006 before buying.
ETH/USD daily chart. Source: TradingView
Both moving averages have flattened out and the relative strength index is close to the midpoint, which suggests a balance between supply and demand. This suggests that the second-ranked cryptocurrency on CoinMarketCap could extend its consolidation for a few more days.
With the ETH/USD pair staying close to the middle of the $216.006–$253.556 range, it has become very difficult to predict the direction of the breakout. The random price action near the center of a range can hit stops very frequently, hence, traders should be cautious until a trending move starts.
Although the bulls are buying the dips to the 20-day exponential moving average ($0.19), the demand dries up at higher levels. This suggests that the bulls are not confident that XRP can start a new uptrend.
XRP/USD daily chart. Source: TradingView
A breakout of the downtrend line will be the first indication of strength. Above this level, the fourth-ranked cryptocurrency on CoinMarketCap can move up to $0.206424 and then to $0.211694.
Conversely, if the bears sink the XRP/USD pair below the 20-day EMA, a drop to $0.188499 is possible. If this support breaks down, the pair could give back all its recent gains and drop to $0.17 levels.
Bitcoin Cash (BCH) has turned down from the 20-day EMA ($229), which is a negative sign. The bears will now make use of this advantage and try to sink the price below the $217.55 support.
BCH/USD daily chart. Source: TradingView
If this support breaks down, the fifth-ranked cryptocurrency on CoinMarketCap could drop to the critical support at $200.
Contrary to the assumption, if the BCH/USD pair rebounds off the $217.55 support, it might remain stuck in the tight $217.55–$246 range for a few more days. A breakout of $246 will be the first sign of strength.
Bitcoin SV (BSV) plunged below the $170 support on July 19, which is a huge negative. The bulls purchased the fall to $161.10 but they have not been able to support the altcoin at higher levels.
BSV/USD daily chart. Source: TradingView
The bears will again attempt to sink the sixth-ranked cryptocurrency on CoinMarketCap below $170. If they succeed, the decline could extend to $154.550, which would be a 100% retracement of the July 6 rally.
If the bears can sink the BSV/USD pair below $146.20, the downtrend is likely to resume with the next support at $120 and then $100.
This bearish view will be invalidated if the pair turns around from the current levels and breaks above the downtrend line.
The bulls are struggling to keep Cardano (ADA) inside the pennant, which is a negative sign. If the bears sink the altcoin below the pennant and the 20-day EMA ($0.115), it will indicate that the momentum has weakened.
ADA/USD daily chart. Source: TradingView
Such a move could result in a range-bound action for a few days. The critical support to watch on the downside is $0.11 because if this breaks down, the uptrend would be in danger.
Below this level, a drop to $0.10 and then to the 50-day simple moving average ($0.095) is possible.
Instead, if the seventh-ranked cryptocurrency on CoinMarketCap sustains above the 20-day EMA, the bulls will make another attempt to push the price above $0.1380977. If successful, the uptrend is likely to resume. The next target on the upside is $0.173 and then $0.20.
Litecoin (LTC) has been trading below both the moving averages for the past few days, which shows that the bulls are in no urgency to buy at higher levels. This could drag the price to the critical support at $39.
LTC/USD daily chart. Source: TradingView
The bears have not been able to sink the eighth-ranked cryptocurrency on CoinMarketCap below $39 for about three and a half months. However, the previous rebound off this support could not rally to the top of the $39–$51 range, which suggests weakness. A break below $39 will be a huge negative as that could drag the price to $35 and then to $30.
This negative view will be invalidated if the LTC/USD pair turns up from the current levels and rises above the moving averages and the $46 resistance. If that happens, a rally to $51 will be on the cards.
Binance Coin (BNB) sharply bounced off the 20-day EMA ($17.16) on July 19, which suggests aggressive buying by the bulls. However, the buyers are facing stiff resistance in the $18.20–$19 zone.
BNB/USD daily chart. Source: TradingView
The 20-day EMA ($17.14) is gradually sloping up and the RSI is in the positive territory, suggesting a minor advantage to the bulls.
If the ninth-ranked crypto-asset on CoinMarketCap turns up from the current levels and breaks above the resistance zone, a rally to $21.50 and above it to $22.93 is possible.
This view will be invalidated if the bears sink the BNB/USD pair below the moving averages. Such a move could drag the price to the trendline of the ascending triangle.
Chainlink (LINK) is in a strong uptrend but it is currently witnessing profit booking since topping out at $8.9080 on July 15. The first support on the downside is at the 38.2% Fibonacci retracement level of $7.3144.
LINK/USD daily chart. Source: TradingView
If the tenth-ranked cryptocurrency on CoinMarketCap rebounds off this level, it will indicate that the bulls are not waiting for a deeper correction to buy. This could resume the up move with the first target objective at $8.9080 and if this is crossed, the uptrend could extend to $10.
Both moving averages are sloping up and the RSI is close to the overbought zone, which suggests that bulls have the upper hand. This bullish view will be invalidated if the bears sink the LINK/USD pair below the 20-day EMA ($6.87).
Crypto.com Coin (CRO) remains in a strong uptrend but the bears are aggressively defending the overhead resistance level at $0.1462. This has attracted profit booking by the bulls, which could result in a possible decline to the 20-day EMA ($0.137).
CRO/USD daily chart. Source: TradingView
If the 11th-ranked cryptocurrency on CoinMarketCap rebounds off the 20-day EMA, the bulls will again attempt to push the price above $0.1462. If they succeed, a rally to $0.15306 is possible.
However, the developing bearish divergence on the RSI suggests caution. If the bears sink the price below the 20-day EMA, the CRO/USD pair could drop to the 50-day SMA and if this support also cracks, the decline can extend to $0.11.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.