Bitcoin price corrected sharply after reaching $12,000 but the strong bounce from BTC and altcoins shows bulls are intent on pushing prices higher.
Bitcoin’s (BTC) rally above the $10,000–$10,400 zone has attracted several traders who had been waiting for a trending move to start. Yusuke Otsuka, the co-founder of Japanese crypto exchange Coincheck, said that several Japanese traders who had been dormant have started trading again this week.
Monex Group CEO Oki Matsumoto also said that many traders who missed buying gold at lower levels are interested in Bitcoin as it has just started its uptrend.
Crypto market data daily view. Source: Coin360
However, it should be noted that traders have different goals, and they trade different time frames. After the sharp up move of the past few days, some short-term traders pressed the sell button as Bitcoin topped $12,000.
This resulted in a massive drop in Bitcoin and several other altcoins, but the positive sign is that buyers emerged at lower levels, which suggests that traders who missed buying the breakout are keen to get in.
The next few days are critical as they will provide deeper insight into whether Bitcoin has started a sustained up move or if this was a massive bull trap.
BTC/USD
Bitcoin (BTC) started an uptrend after it broke out of the $10,000–$10,400 resistance level on July 27. This move also completed the inverse head and shoulders pattern, which has a target objective of $16,997.
BTC/USD daily chart. Source: TradingView
As the pair is in a trending move a 20-day exponential moving average, and the directional movement indicator has been used on the charts.
The average directional movement index (ADX) is above 41 level, which suggests that the trend is strong. The positive directional indicator (+DI) is above the negative directional indicator (-DI), which suggests that the bulls have the upper hand.
Today, the BTC/USD pair reached an intraday high of $12,113.50, which is just below the $12,304.37 resistance. This attracted aggressive profit booking from some short-term bulls that dragged the price down to $10,525.
This resulted in a large outside day candlestick pattern, which sometimes indicates a reversal. For the trend to turn negative, the bears will have to sink and sustain the price below $10,400.
However, today, the price has rebounded sharply off the $10,525 level, which suggests that the traders are using the dips to buy. As long as the price sustains above $10,400, the path of least resistance is likely to be on the upside.
BTC/USD 4-hour chart. Source: TradingView
The ADX on the 4-hour chart is above 44, suggesting that the short-term trend is also strong but the -DI has risen above the +DI, which suggests that the bears have a minor advantage. If the bears can sink the price below $10,800, a retest of $10,400 will be on the cards.
A break below $10,400 will be a huge negative, hence, traders can avoid bottom fishing if the price sustains below this level.
Conversely, if the pair sustains above the $10,800–$10,400 support zone, then the bulls are likely to make another attempt to push the price to $12,113.50. A break above this level is likely to resume the up move.
ETH/USD
Ether (ETH) broke out of the $253.556 level on July 22 and reached a high of $415.634 today, which is a 62.92% rally within a short time. This pace of the uptrend is unsustainable, hence, a pullback was warranted.
ETH/USD daily chart. Source: TradingView
Today, traders booked profits aggressively that quickly pulled the price down to $328.507, which is just above the 50% Fibonacci retracement level of the most recent leg of the rally. However, the bulls purchased this dip aggressively, which shows strong demand at lower levels.
Unless the price closes near the bottom of today’s large range, the outside day candlestick pattern will not signal a reversal. The ETH/USD pair might trade in a small range for a few days as both the bears and the bulls wait for clarity.
The ADX is above 52 and the +DI is above the -DI, which shows that the advantage is with the bulls. If the bulls can sustain the price above the 38.2% Fibonacci retracement level of $346.857, a retest of $415.634 is likely. Above this level, the uptrend is likely to resume with the next target at $480.
Contrary to the assumption, if the bears can sink the price below $320, a drop to the 20-day EMA ($302) is possible. A break below this zone will be a huge negative and could signal that a short-term top has been made at $415.634.
ETH/USD 4-hour chart. Source: TradingView
The 4-hour chart shows that the bulls are trying to keep the price above the 20-EMA, which is a positive sign. The short-term trend remains strong with the ADX above 42 levels. The +DI and the -DI are close to one another, which shows that both the bulls and the bears are trying to establish their supremacy.
If the bulls can sustain the price above $366, it will be a huge positive as it will indicate strong demand at lower levels. Such a move will increase the possibility of a rally to $415.634, above which the uptrend is likely to resume. Hence, the bulls can remain positive as long as the price sustains above the 20-EMA.
However, if the price dips below the 20-EMA, the bears are likely to make another attempt to break below the critical support at $320. Traders can remain cautious as long as the price remains below the 20-EMA and $366.
LINK/USD
Chainlink (LINK) has been consolidating in a large range of $6.8221–$8.9080 for the past few days. This has dragged the ADX to just above 31, which suggests that the trend has weakened marginally.
LINK/USD daily chart. Source: TradingView
The +DI and the -DI are close to each other, which suggests that both the bulls and the bears are trying to gain an upper hand.
Today, the LINK/USD pair plunged sharply from close to the overhead resistance of the range to the support of the range. However, the bears could not keep the price down and the pair rebounded sharply from the intraday lows of $6.87.
This suggests that the bulls are aggressively buying at lower levels. If the bulls can propel the pair above $8.9080, the uptrend is likely to resume with the next target at $11.
LINK/USD 4-hour chart. Source: TradingView
The 4-hour chart shows that the bulls purchased the dip to $6.87 aggressively and then tried to propel the price above $8.908 but they are facing stiff resistance just below this level, which suggests that the bears have other plans.
However, if the bulls can keep the price above the upsloping 20-EMA, it will increase the possibility of a breakout above $8.908. A close (UTC time) above this level will suggest that the uptrend has resumed.
Conversely, if the price slides below the 20-EMA, the bears will make one more attempt to sink the price below $6.8221. If they succeed, it will be a huge negative.
VET/USD
VeChain (VET) is currently trading inside a bullish flag pattern. The 20-day EMA ($0.016) is flat and the +DI and -DI are close to each other, which suggests a balance between buyers and sellers.
VET/USD daily chart. Source: TradingView
A breakout and close (UTC time) above the resistance line will tilt the advantage in favor of the buyers and complete the bullish setup, which has a target objective of $0.031398.
However, if the bears sink the VET/USD pair below the 50% Fibonacci retracement level of $0.015279, the correction can deepen to the 61.8% Fibonacci retracement level of $0.013698.
A break below this level will be a huge negative and could result in a deeper correction. Therefore, traders can wait for the price to break out and sustain above the flag before turning positive.
VET/USD 4-hour chart. Source: TradingView
The bulls have been aggressively defending the $0.015279 support for the past few days. Today also, the price rebounded from just below this level. The bulls will now try to push the price above the resistance line. If successful, a move to $0.020 and then to $0.021978 is likely.
Contrary to this assumption, if the bears sink and sustain the price below $0.015279, a drop to the support line of the flag is possible. The -DI has risen above the +DI, which suggests that the bears have a minor advantage.
A break below the flag will be a huge negative, hence, traders can avoid buying if the price sustains below $0.013.
LTC/USD
Litecoin (LTC) hit its first target objective of $64, which resulted in profit booking by a few short-term traders. This pulled the altcoin down to $51.8850, which is just above the breakout level of $50.7864.
LTC/USD daily chart. Source: TradingView
The ADX is above 38 levels and the +DI is above the -DI, which suggests that the bulls have the upper hand. If the bulls can keep the price closer to $60 levels, it will increase the possibility of a breakout above $65.1573, which can result in a rally to $80.
This bullish view will be invalidated if the bears sink the price below $50.7864. Such a move will indicate a possible change in trend because the bulls are no longer buying the dips. Therefore, traders can avoid initiating long positions if the price sustains below $50.
LTC/USD 4-hour chart. Source: TradingView
The 4-hour chart shows that the ADX is above 34 and the +DI and -DI are close to each other, which suggests that the bulls and the bears are trying to assert their supremacy.
If the bulls can push the price above the 20-EMA, it will be the first indication of strength and will increase the possibility of a move to $65.1573. A break above this level will signal the possible resumption of the uptrend.
However, if the bears sink the price below $55, the LTC/USD pair can retest the critical support at $50.7864. A break below this level will be a huge negative.
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.
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