Bitcoin’s (BTC) 43% rally from $29,482.61 on July 21 to $42,316.71 on July 30 has invigorated the bulls, who had been sitting on the sidelines. After the sharp rise, some analysts are debating whether Bitcoin could repeat its sharp bull runs of 2013 and 2017.
Vailshire Capital founder and CEO Jeff Ross highlighted that Bitcoin had rallied tenfold in the second half of 2013 after facing three months of negative news. Ross said: "I still contend that 2021 will behave in similar fashion."
PlanB, the creator of the stock-to-flow price model, said Bitcoin’s comeback in July was “like clockwork.” He said that the stock-to-flow model will remain valid if Bitcoin closes August above $47,000.
Meanwhile, institutional investors continue to accumulate Bitcoin while the price is still depressed. Asset management firm GoldenTree, with about $45 billion in assets under management, has purchased an undisclosed amount of Bitcoin, according to The Street.
Bitcoin’s short-term sentiment has clearly turned bullish, following the strong recovery of the past few days. Let’s study the charts of the top five cryptocurrencies that may participate in the up-move in the next few days.
Bitcoin’s (BTC) sharp rally of the past few days is facing stiff resistance at $42,451.67, but the positive sign is that buyers have not given up much ground. This suggests that bulls are not dumping their positions, as they anticipate the up-move to continue.
The rising 20-day exponential moving average (EMA) at $36,800 and the relative strength index (RSI) near the overbought zone suggest that the path of least resistance is to the upside. If bulls drive the price above $42,451.67, the BTC/USDT pair could start a new uptrend, which could reach the psychological level at $50,000.
On the other hand, if the price turns down from the current level, the bulls will attempt to defend the support at $36,670. A strong rebound off this support could keep the pair range-bound between $36,670 and $42,451.67 for a few days.
The bears will have to pull the price below $36,670 to gain the upper hand. Such a move could unlock the possibility for a retest at $31,000.
The four-hour chart shows that both moving averages are sloping up and the RSI is in the positive zone, indicating an advantage to buyers. If the price rebounds off the 20-day EMA, the bulls will make one more attempt to clear the overhead hurdle at $42,451.67.
Alternatively, if the bears pull the price below the 20-day EMA, the pair could drop to the 50-day simple moving average (SMA). A strong bounce off this support will suggest that sentiment remains positive and traders are buying on dips.
The bullish momentum may weaken if the price dips below the 50-SMA. Such a move could result in a decline to $36,670.
Uniswap (UNI) rose above the downtrend line on July 30, invalidating the descending triangle pattern. This could result in a short squeeze as aggressive bears rush to cover their positions.
If bulls drive the price above the $23.45 to $25 resistance zone, the UNI/USDT pair could rally to the stiff overhead resistance at $30. The moving averages have completed a bullish crossover and the RSI has risen into the positive territory, suggesting that bulls are in command.
However, the bears may have other plans, as they are likely to try to defend the overhead zone. If the price turns down from the zone but rebounds off the 20-day EMA ($19.25), it will suggest that traders are buying the dips. That will increase the possibility of a break above $25 and a rally to $30.
Contrary to this assumption, if the price turns down and plummets below the moving averages, several aggressive bulls may get trapped. That may result in a drop to $17.24 and then to $13.
The UNI/USDT pair could rise to $23.45 where the bulls may encounter stiff resistance from the bears. If the bulls do not give up much ground, it will suggest they anticipate a further rally. The upsloping moving averages and the RSI in the overbought zone also indicate that the sentiment favors a further rise.
This positive view will be negated if the price turns down from the overhead resistance and breaks below the 20-day EMA. Such a move will suggest that traders booked profits near $23.45 aggressively. That may result in a deeper pullback to the 50-day SMA.
Chainlink (LINK) broke above the 50-day SMA ($18.73) on July 27, suggesting that bears were losing their grip. After a minor hesitation near the psychological level at $20, the bulls resumed the relief rally on July 30.
However, the long wick on Aug. 1's candlestick suggests that the up-move may be losing steam.
If the price turns down from the current level but rebounds off the 20-day EMA ($18.83), it will suggest that the sentiment has turned bullish. The buyers will then attempt to push the LINK/USDT pair toward the stiff overhead resistance zone at $32.50 to $35.
Conversely, if the pair breaks below the moving averages, it will suggest that bears have not yet given up. They may then pull the price down to the critical support zone at $13.38 to $15.
Both moving averages are sloping up on the four-hour chart and the RSI is in the positive zone, suggesting that bulls are in control. The bulls are likely to buy the dips to the 20-day EMA. If that happens, the pair could resume its up-move, with the next possible stop at $26.20.
On the other hand, if bears pull the price below $21, several aggressive bulls may get trapped. The price could then drop to the 50-day SMA. This is an important level for the bulls because if it cracks, the pair may extend its decline to $15.
The bulls pushed Solana (SOL) above the downtrend line on July 31, invalidating the descending triangle pattern. Currently, the bears are attempting to pull the price back below the downtrend line and trap the aggressive bulls.
The 20-day EMA ($30.49) has turned up and the RSI has risen above 61, indicating that buyers have the upper hand. If bulls buy the dip to the downtrend line, it will suggest that the sentiment has turned positive. The buyers will then try to resume the up-move by propelling the price above the $37 to $38.10 resistance zone.
If they succeed, the SOL/USDT pair could rally to $44 where the bears are likely to mount a stiff resistance. This positive view will invalidate if the bears pull the price below the moving averages. Such a move could open the doors for a further fall to $26.50.
The bears are attempting to stall the relief rally near the overhead resistance at $38.10, but the upsloping moving averages and the RSI in the positive zone suggest that bulls have the upper hand.
If the pair rebounds off the 20-EMA, the buyers will again attempt to clear the overhead hurdle. If they manage to do that, the pair could start its journey toward $44.
A break below the 20-EMA will be the first sign of weakness. That may pull the price to the 50-SMA and delay the possible break above $38.10.
Monero (XMR) broke above the downtrend line on July 26, which invalidated the developing descending triangle pattern. The failure of a bearish setup is a positive sign.
The XMR/USDT pair has been consolidating in a tight range for the past three days. If bulls drive the price above $250, the pair could start its journey toward $288.06 and later to $316.23. The moving averages are on the verge of a bullish crossover and the RSI is in the positive zone, indicating advantage to the buyers.
If the price turns down from the current level but finds support at the 20-day EMA ($220), it will suggest that traders are buying on dips. The bulls will then make one more attempt to resume the up-move.
This positive view will invalidate if the bears sink the price below the moving averages. Such a move will suggest that the current rally was a bull trap.
For the past few days, the four-hour chart shows the pair had been stuck between $180 and $227.50. The breakout of this range gives the pair a target objective at $275, but the bears have other plans. They are aggressively defending the psychological resistance at $250.
The upsloping moving averages and the RSI in the positive territory suggest the path of least resistance is to the upside. If bulls thrust the price above $250, the upward march may pick up momentum.
On the downside, bears will have to sink and sustain the price below $227.50 to invalidate the bullish view.
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.