Bitcoin (BTC) is leading the recovery in crypto markets today after the price rallied back above the $32,000 level. Sam Trabucco, a quantitative trader at Alameda Research, said the firm had purchased the dip in Bitcoin on July 20.
Trabucco said the sharp recovery in equity markets, fewer long liquidations in the crypto derivatives market and the possible end of FUD caused due to China mining ban and Grayscale unlocking could act as recovery catalysts that could boost the crypto rally further.
The correction may open up opportunities for several new investors to enter the crypto markets.
JPMorgan director of asset and wealth management Mary Callahan Erdoes said in a recent interview with Bloomberg that several of the bank’s clients want to invest in Bitcoin because they consider it as an asset class.
Let’s study the charts of the top-10 cryptocurrencies to determine the levels where resistance may creep in.
BTC/USDT
Aggressive selling by the bears pulled the price below $31,000 on July 19 and that was followed by another down move on July 20. However, the bulls purchased the dip below $30,000 today, resulting in a strong rebound.
If they succeed, the pair could start the next leg of the downtrend that could pull the price down to $20,000.
Conversely, if bulls drive the price above the 20-day EMA, the pair could challenge the 50-day simple moving average ($34,599). A break above this resistance will be the first sign of strength and open the doors for a possible rally to $36,670.
ETH/USDT
The long tail on the July 20 candlestick suggests that bulls purchased the dip to the strong support at $1,728.74. This is the third instance when Ether (ETH) has rebounded off this level since May 23.
If the price turns down from the 50-day SMA, the bears will again try to pull the price below $1,728.74. If they manage to do that, the pair could start the next leg of the downtrend that may reach $1,536.92.
The buyers will have to clear the hurdle at the downtrend line to signal a possible change in trend.
BNB/USDT
Binance Coin (BNB) has bounced off the $251.41 support today which is a positive sign. This suggests that bulls are not waiting for a deeper correction to buy.
Conversely, if the price turns down from the downtrend line, it will indicate that bears are selling on rallies. The sellers will then again attempt to pull the price down to the critical support at $211.70. A break below this support could complete a bearish descending triangle pattern and start the next leg of the downtrend.
ADA/USDT
Cardano (ADA) plunged to the critical support at $1 on July 20 but the bulls aggressively purchased this dip, resulting in a strong rebound today. The relief rally could now reach the 20-day EMA ($1.25) where bears may offer a stiff resistance.
Conversely, if the price turns down from the 20-day EMA, the bears will again try to sink the pair below $1. If that happens, panic selling may ensue and the pair could start its downward journey to $0.80 and then to $0.68.
XRP/USDT
XRP has bounced off the critical support at $0.50 today, indicating that bulls are attempting to defend this level aggressively. The rebound could rise to the 20-day EMA ($0.61), which is likely to act as a stiff hurdle.
If that happens, the XRP/USDT pair could resume the downtrend. The next support is at $0.45 and then $0.40. Alternatively, if bulls drive the price above the 20-day EMA, it will indicate that bears are losing their grip. The pair may then rise to the overhead resistance at $0.75.
DOGE/USDT
Dogecoin (DOGE) has once again bounced off the $0.15 support today, suggesting that bulls are aggressively attempting to defend this level. The relief rally could now reach the overhead resistance at $0.21.
A breakout of $0.21 will be the first sign of strength and could result in a rally to the 50-day SMA ($0.26). On the contrary, if the price turns down and plummets below $0.15, the pair may witness panic selling and could drop to $0.10.
DOT/USDT
Polkadot (DOT) plummeted near the psychological level at $10 on July 20 where buying emerged. This has resulted in a strong recovery today.
Contrary to this assumption, if bulls push the price above the 20-day EMA, the pair could move up to the 50-day SMA ($17.82). A breakout and close above this resistance will signal a possible change in trend.
UNI/USDT
Uniswap (UNI) turned down from the overhead resistance at $16.93 on July 19 and started its southward march toward the next critical support at $13 but the bulls had other plans. They purchased at lower levels today, resulting in a strong recovery.
If they succeed, the pair could start the next leg of the downtrend and slide to the psychological support at $10. Conversely, if bulls propel the price above the 20-day EMA, the pair may reach the downtrend line. A breakout of this resistance will indicate that bears are losing their grip.
Related: It is time for the US to create a ‘Ripple test’ for crypto
BCH/USDT
Bitcoin Cash (BCH) dropped to $383.53 on July 20 from where it is attempting to start a relief rally. This suggests that bulls are accumulating at lower levels.
If they manage to do that, the decline could extend to the next support at $330. On the other hand, if bulls thrust the price above the 20-day EMA, the pair may rally to the overhead resistance at $538.11.
LTC/USDT
Litecoin (LTC) plunged below the $118 support on July 19, completing a bearish descending triangle pattern. The decline had pushed the RSI into oversold territory, suggesting that selling was overdone in the short term.
On the contrary, if bulls push and sustain the price above $118, the pair could climb up to the 20-day EMA ($127) where bears may again try to stall the relief rally. If they succeed, the pair could again turn down but if bulls drive the price above the 20-day EMA, a rally to the 50-day SMA ($145) is possible.
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.
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