Bitcoin (BTC) is in freefall, having broken below the psychological support level of $60,000 on August 4. Bitcoin has come under heavy selling pressure this week as traders have reduced their risk following the Japanese stock market Nikkei’s plunge of around 6% on August 2. A weaker-than-expected July jobs report on August 2 failed to improve the picture, and the Nasdaq Composite fell into correction territory, falling more than 10% from its all-time high.
Despite the recent decline, Bitcoin is still within a large range. It is difficult to predict the direction of the breakout from the range, but Bitcoin whales are still bullish. Whale addresses holding more than 1,000 Bitcoin added 84,000 Bitcoin in July. Also, according to Glassnode’s Whale Net Position Change indicator, about 64,000 Bitcoins have been moved out of whale exchange balances in the last 30 days, the most since 2015.
Bitcoin’s weakness has led to several altcoins falling, indicating that buyers are taking a wait-and-see approach. However, as Bitcoin approaches the bottom of its range, buyers are likely to step in. This could lead to a rebound in some altcoins.
What are the important levels to watch out for in Bitcoin where a recovery could begin? Let’s take a look at the top 5 cryptocurrencies that could lead the crypto market higher.
Bitcoin Price Analysis
Bitcoin has been under intense selling pressure since it broke above the moving average on August 2. The free fall broke through the $60,000 support level on August 4.
The 20-day exponential moving average ($63,855) has started to show a downward trend, and the relative strength index (RSI) is approaching sell-off territory, suggesting that the downside is in control.
The recovery attempt is likely to face strong resistance at the 20-day EMA. If the price declines sharply from the 20-day EMA, there is a high risk of a drop below the important support level of $55,724.
Conversely, a breakout and close above the 20-day EMA would signal that BTC/USDT may remain range-bound for the time being.
The 4-hour chart shows that the bulls have not been able to stop the decline at $60,000, which suggests that every little advance is being sold. The next support level for the downtrend is $55,724, followed by $53,485. Buyers will try to defend this area with all their might, as failure to do so could trigger a deeper correction.
The bulls should push the price above the 20-EMA and hold it, which would indicate that the bears are losing control. Then the pair can rise towards the 50-simple moving average.
Solana Price Analysis
Solana (SOL) has been trading in a wide range between $116 and $210 over the past few months, which is a signal to buy on dips and sell on rises.
The bears have pushed the price below the moving averages, but the SOL/USDT pair is likely to find support in the $127-$116 area. If the price bounces from the current levels or support area, it is expected to face selling at the 20-day EMA ($162).
If the price breaks below the 20-day EMA, the pair could retest the support zone. On the other hand, if it breaks above the 20-day EMA and closes, a rally to $188 is likely.
The 4-hour chart shows a sharp decline, with the price falling into the oversold zone. The pair is expected to find support in the $135 to $121 zone. If so, the pair is likely to rally to the 20-EMA. This level is a must-watch level, as a breakout of this level could push the pair to $165.
Conversely, if the relief rally fails to break above the 20-EMA, it would be a signal that bears are selling off every minor upside move. The pair could then retest the crucial support at $121.
XRP Price Analysis
The bulls’ inability to sustain XRP (XRP) above $0.64 led to a massive sell-off, which caused the price to fall to the 50-day SMA ($0.52).
If the price bounces from current levels, the bulls will attempt to push the XRP/USDT pair above the 20-day EMA ($0.57). If they do so, it will be a signal that the pair may start a rally towards $0.64.
This bullish outlook will be invalidated if the price continues to decline and break below the 50-day SMA. The pair could then fall to the $0.46-$0.41 support zone, which is likely to attract solid buying from the bulls.
The falling moving average and the RSI near the oversold area indicate that the bears are in the lead. The minor support level is $0.52, but the bears will try to maintain momentum and push the pair down to $0.46.
If the bulls want to stop the decline, they will need to quickly push the price above the 20-EMA. This will open the door for a recovery to the 50-SMA, and the bears will try to stop the uptrend.
Related: Bitcoin Price Drops $60K, But Maturity Wyckoff Signals Give Hope
Caspar Price Analysis
Kaspar (KAS) plunged from $0.21 on August 1, but the bulls are trying to find support at the 50-day SMA ($0.17).
Buyers will need to push the price above the 20-day EMA ($0.18) to signal the start of a recovery. Then, the KAS/USDT pair will attempt to break above the hurdle at $0.19. If that happens, the pair can start a rally towards $0.24.
Alternatively, if the price continues to decline and falls below the 50-day SMA ($0.17), this will be a signal that the bulls are rushing for an exit. This could start a deeper correction towards $0.16 and later towards $0.14.
The 4-hour chart shows that the pair tried to bounce from $0.17, but the bears sold near the $0.18 level. If the $0.17 level breaks, the pair could fall towards the uptrend line, which is likely to act as a solid support level.
If the price bounces off the uptrend line, the bulls will try again to push the pair above the 20-EMA. Conversely, if the price breaks below the uptrend line, it signals the start of a deeper correction towards $0.14.
Aave Price Analysis
Buyers pushed Aave (AAVE) above the $115 resistance level on August 1, but failed to hold the high.
The bulls attempted a relief rally from the 20-day EMA ($101) on August 4, but the long wick of the candlestick shows selling at higher levels. If the price breaks below the 20-day EMA, the next stop is likely to be the 50-day SMA ($93).
This negative view will be invalidated in the short term if the price rises from the current level and breaks $115. Such a move is a signal that sentiment is still positive and traders are buying on the dip. Then, the AAVE/USDT pair can rise to $130.
The bulls pushed the price above the moving average on the 4-hour chart but failed to hold the higher level. The bears sold aggressively and pushed the price back below the moving average.
There is strong support in the $96-$102 zone. If the price bounces from this zone and stays above the 20-EMA, it will signal that the correction is over. Conversely, if it breaks below the zone, the pair may fall to $85.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.