The U.S. equity markets, gold, crude oil and the crypto markets are all up today. This shows that the U.S. investors have returned from the holiday weekend charged up and ready to buy assets to fight the likely devaluation in the U.S. dollar due to the Federal Reserve’s current monetary policy.
Sino Global Capital CEO Matthew Graham believes that China wants to internationalize the renminbi as a direct challenger to the dollar. Hence, the digital yuan will use the latest technologies to counter “Swift, CHIPS, Fedwire […],” which are all technologies used by the U.S. dollar but are antiqued and expensive.
Daily cryptocurrency market performance. Source: Coin360
Bitcoin’s (BTC) dominance, which was close to 70% on May 15, has gradually dropped and now rests below 64%. This suggests that after the halving, trader’s interest in the top-ranked asset on CoinMarketCap declined compared to the altcoins.
Does this mean that altcoins are likely to outperform Bitcoin in the short-term or is this a rally that will be sold into? Let’s analyze the charts to find out.
Repeated failure by the bears to sustain Bitcoin (BTC) below $9,000 has attracted buyers who have now pushed the price above the 20-day exponential moving average ($9,255). The bears might aggressively defend the 50-day simple moving average ($9,392).
BTC/USD daily chart. Source: TradingView
If the BTC/USD pair turns down from the moving averages, the bears will make one more attempt to sink the price below the $8,825-$8,638.79 support zone. If successful, a deeper correction is possible.
Conversely, if the bulls can drive the pair above the 50-day SMA, a rally to $10,000 is likely. The long-term downtrend line is placed just above this level, hence, the bears will try to defend it aggressively.
A breakout of the $10,000-$10,500 zone will be an important event as that could result in a sustained uptrend in the pair.
After staying below the 20-day EMA ($230) for the past few days, Ether (ETH) decided to climb above it. This is a positive sign as it shows strong accumulation at lower levels.
ETH/USD daily chart. Source: TradingView
The next target is $253.556, which might act as a stiff resistance but if the bulls can drive the second-ranked cryptocurrency on CoinMarketCap above this resistance, the uptrend is likely to resume. The next target on the upside is $288.599.
However, if the bears again defend the $253.556 level, the ETH/USD pair might remain range-bound for a few more days. The 20-day EMA is gradually sloping up and the relative strength index has jumped into the positive zone, which suggests that bulls have a minor advantage in the short-term.
XRP has broken out of the descending channel and the 20-day EMA ($0.18) suggesting an end of the downtrend. The 20-day EMA has flattened out and the RSI has risen above the midpoint, which shows that the bears are losing their grip.
XRP/USD daily chart. Source: TradingView
The next target to keep an eye on is the downtrend line. The 50-day SMA ($0.19) is also located at the same level. If the momentum can drive the fourth-ranked cryptocurrency on CoinMarketCap above this resistance, a rally to $0.214616 and then to $0.235688 is possible.
Conversely, if the XRP/USD pair turns down from the 50-day SMA but does not break below the 20-day EMA, it could signal the formation of a higher low. However, if the price slides below the 20-day EMA during the next drop, it will indicate that the current rise was a bull trap.
The bears attempted to break below the $217.55 support on July 5 but the bulls again bought the dip, indicating strong buying at lower levels. Today, the buyers have propelled Bitcoin Cash (BCH) above the moving averages, which is a huge positive.
BCH/USD daily chart. Source: TradingView
This is the first sign that the bulls are back in the game. If the fifth-ranked cryptocurrency on CoinMarketCap can sustain above $240, a rally to $260 is possible.
However, it is not going to be easy because the bears have not allowed the BCH/USD pair to sustain above the $240 level since mid-June.
Therefore, they are likely to aggressively defend this resistance once again. If the pair turns down from $240, it could again drop to the 20-day EMA ($229).
In a surprise move today, Bitcoin SV (BSV) has surged and broken out of the moving averages, which suggests huge buying by the bulls.
BSV/USD daily chart. Source: TradingView
The next resistance to watch out for is $200. If the momentum can carry the sixth-ranked cryptocurrency on CoinMarketCap above this level, a rally to $227 is possible. The 20-day EMA ($168) has turned up and the RSI has risen into the positive zone, which suggests a change in the short-term trend.
A similar sharp up move had started in end-March of last year (marked via ellipse on the chart) that had carried the BSV/USD pair from $146.20 to $227. Hence, a strong rally cannot be ruled out this time.
However, if the bears defend the $200 level aggressively, the BSV/USD pair could dip back to the moving averages, which will now act as a strong support.
After consolidating close to the $41 levels for the past few days, Litecoin (LTC) has broken out of the 20-day EMA ($42.60). The bears might attempt to stall the up move at the 50-day SMA ($44.05).
LTC/USD daily chart. Source: TradingView
If the bears succeed, the seventh-ranked cryptocurrency on CoinMarketCap might again dip to $41 and then to $39.
Both moving averages are flat and the RSI is just above the midpoint, which suggests a balance between supply and demand.
Nonetheless, if the bulls can push the LTC/USD pair above the 50-day SMA, a rally to $47.50 and above it to $51 is possible.
Cardano (ADA) has been consolidating close to the $0.10 resistance for the past three days, which shows that the bears are trying to stall the up move at this level. However, the positive thing is that the bulls have not given up much ground.
ADA/USD daily chart. Source: TradingView
This shows that the buyers are in no hurry to book profits as they expect the uptrend to resume. If the bulls can push the eighth-ranked cryptocurrency on CoinMarketCap above $0.11, it is likely to pick up momentum.
Such a move will complete a huge bottoming formation that has a target objective of $0.20.
However, the zone between $0.10 and $0.11 had previously acted as a stiff resistance (shown via ellipse on the chart), hence, the bears are likely to defend it aggressively.
If the ADA/USD pair turns down from the current levels, it can drop to the 20-day EMA ($0.088), which is likely to act as a strong support. A break below this support will signal that the bulls are losing momentum.
Even though Binance Coin (BNB) had been trading below $15.72 for the past few days (shown via ellipse on the chart), the bears could not intensify the selling and take advantage of the weakness, which indicates a lack of sellers at lower levels.
BNB/USD daily chart. Source: TradingView
The relief rally has reached the 20-day EMA ($15.82), which is likely to act as a resistance but if the bulls can push the ninth-ranked crypto-asset on CoinMarketCap above this level, a move to the 50-day SMA ($16.47) is possible.
Both moving averages have flattened out and the RSI is just below the 50 level, which suggests a range-bound action for a few more days.
Contrary to the assumption, if the BNB/USD pair turns down from the 20-day EMA, it can again drop to $15 levels.
Crypto.com Coin (CRO) continues to be in a strong uptrend as both moving averages are sloping up and the RSI is close to the overbought territory. This suggests that bulls are in command.
CRO/USD daily chart. Source: TradingView
The buyers have pushed the 10th-ranked cryptocurrency on CoinMarketCap above $0.133539. This has resumed the up move with the next target being $0.15306. This level is likely to act as a stiff resistance but if the bulls can scale above it, the momentum is likely to pick up.
While the overall chart structure remains positive, the bearish divergence on the RSI is still intact. In an uptrend, these divergences are sometimes negated by a sustained up move but sometimes they result in a correction.
Therefore, to be on the safer side, traders can trail their stops to lock in their paper profits in case of a sharp pullback.
The bears attempted to sink EOS below $2.3314 on July 5 but failed. This attracted huge buying by the bulls who have pushed the altcoin above both moving averages, which is a huge positive.
EOS/USD daily chart. Source: TradingView
There is a minor resistance at $2.6209 but if this level is crossed, the 11th-ranked cryptocurrency on CoinMarketCap can rally to $2.8319. If the momentum can carry the price above this level, a retest of $3.1104 will be on the cards.
This view will be invalidated if the bulls fail to sustain the price above $2.6209. Such a move will indicate selling by the bears at higher levels and could keep the EOS/USD pair in a $2.6209-$2.3314 range for a few more days.
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.