This suggests that sentiment remains negative. However, the recent Chinese crackdown on crypto miners or regulatory measures have failed to trigger the next step in Bitcoin’s downtrend. This indicates that smart money is not panicking but fishing deep in the hollows.
Analyst Willy Woo recently said in an interview on the What Bitcoin Did podcast that long-term holders who sold their Bitcoin earlier this year are slowly accumulating at lower levels. Woo added that the on-chain data suggests Bitcoin is on the road to recovery.
Billionaire Steven Cohen’s hedge fund Point72 Asset Management is looking for a “crypto boss” to enter the crypto business, according to sources from The Street news outlet. This suggests that institutional investors view the current decline as an entry opportunity.
With the crypto markets recovering, let’s take a look at the charts of the top five cryptocurrencies that stand a good chance of leading the rescue rally.
Bitcoin has consolidated between $ 31,000 and $ 42,451.67 in the past few days. After the bears failed to keep the price below range support on June 22-26, the bulls are currently attempting a rally.
The bulls have pushed the price above the 20-day exponential moving average ($ 34,993) and will now attempt to push the price above the 50-day simple moving average ($ 36,597). The positive divergence on the relative strength index indicates that the bullish momentum may accelerate.
If the buyers push the price above the 50-day SMA, the BTC / USDT pair could rally to the air resistance zone at $ 41,330 at $ 42,451.67. Bears are likely to defend this area aggressively. If the price drops from this resistance, the pair may extend its range-related action for a few more days.
Contrary to this assumption, if the price drops from the 50-day SMA and goes below $ 32,700, the bears will again try to push the pair below $ 31,000. If they are successful, the next stop could be critical support at $ 28,000.
The 4 hour chart shows the formation of an ascending triangle pattern which will end in a breakout and close above $ 36,670. If the bulls manage to pull through, the pair could climb back up to $ 41,000 and then to the setup target of $ 44,535.
On the contrary, if the price drops from the current level or to $ 36,670, the bears will try to drop the pair below the trendline of the triangle. If this happens, the bullish setup will be canceled and it could cause a drop to $ 32,700 and then to $ 31,000.
ETH / USDT
Ether (ETH) broke the 20-day EMA ($ 2,193) on June 30, but the bulls were unable to maintain the higher levels. The bears took the price below the 20-day EMA on July 1 and tried to trap aggressive bulls.
However, the strong rebound of $ 2,018.50 on July 2 suggests that sentiment has turned positive and traders are racking up lows. The bulls pushed the price back above the 20-day EMA on July 3.
The 20-day EMA has flattened and the RSI is attempting to break above 52, indicating that momentum is turning positive. ETH / USDT could rally to the downtrend line where bears could try to block the bullish movement.
But if the momentum continues and the bulls propel the price above the downtrend line, the pair could hit $ 2,990.05. This positive opinion will be invalidated if the pair rejects the 50-day SMA ($ 2,437) and breaks the $ 2,000 support.
The 4 hour chart shows an inverted head and shoulders pattern that ended in a breakout and closed above $ 2,280. This bullish setup has a target of $ 2,860. Rising moving averages and the RSI near the overbought zone suggest buyers are in control.
Contrary to this assumption, if the pair falls back below $ 2,280, it will suggest that the bears have not given up yet and that they are trying to trap the aggressive bulls. A break below $ 2,000 could shift the advantage again in favor of the bears. The pair could then retest the critical support at $ 1,728.74.
UNI / USDT
Uniswap (UNI) rebounded from $ 13 on June 22 and topped the 20-day EMA ($ 19.50), for the first time since June 4, which is a positive sign. The 20-day EMA flattened and the RSI hit the midpoint, indicating sellers are losing their grip.
UNI / USDT could now hit the 50 day SMA ($ 22.99) where bears are again likely to mount strong resistance. However, if the bulls can stop the next decline at the 20-day EMA, this will suggest a change in sentiment from selling on rallies to buying on lows.
This will improve the outlook for a breakout above the 50 day SMA. If this happens, the pair can begin its journey to air resistance at $ 30. On the contrary, if the price drops and goes below $ 16.93, bears can pull the pair back to $ 13.
The moving averages have completed a bullish cross and the RSI is close to overbought territory, implying that the bulls have the upper hand in the near term. If the buyers push the price above the overhead resistance at $ 21, the pair could gain momentum and climb back up to $ 25, then $ 27.
On the other hand, if the price breaks below 20-EMA, the next major support to watch on the downside is $ 17. A break below will suggest traders continue to sell at higher levels. The pair can then drop to $ 15.
After a massive drop from $ 497.19 to $ 28.31, Internet Computer (ICP) is trying to form a bottom. The 20-day EMA ($ 53) flattens out and the RSI tries to recover from heavily oversold levels, indicating that selling pressure is easing.
If the bulls push the price above $ 60, the ICP / USDT pair will complete a 1-2-3 bottom formation. The pair could then rise to $ 72.61. Thereafter, if the bulls stop the next decline above the 20 day EMA, it will suggest that a new uptrend has started.
Contrary to this assumption, if the price drops from the current level and drops below $ 41.44, the bears will attempt to push the pair down to all-time low of $ 28.31. A break below this support could prolong the bearish trend.
The moving averages have completed a bullish cross and the RSI is in positive territory on the 4 hour chart, suggesting that the bulls are back in the game. However, the bears are unlikely to give up easily and defend $ 52.
If the price drops from the current level but bounces off the moving averages, it will suggest an accumulation at lower levels. The bulls will then try again to push the price above $ 52 and then $ 60.
If they are successful, the pair can start a new uptrend. Contrary to this assumption, if the price drops below $ 40, the pair may retest the all-time low.
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AAVE / USDT
Aave crossed the downtrend line on June 29, indicating that negative momentum was weakening. The bears attempted to slow the rally at the 20-day EMA ($ 252) but were unable to bring the price back below the downtrend line. It suggests buying at lower levels.
The bulls propelled the price above the 20-day EMA on July 3, indicating a possible change in trend. The bears may attempt to turn the previous support at $ 280 into resistance, but if the bulls do not allow the price to drop below $ 215.62, the possibility of a break above air resistance is high.
This will open the doors for a rally to the 50-day SMA ($ 321), then $ 400. The flattening 20-day EMA and the RSI near the midpoint indicate that the bulls are trying to make a comeback. This positive opinion will be invalidated if the AAVE / USDT pair drops from the current level and falls below $ 215.62. This could cause a retest of the June 22 low at $ 170.10.
The 4 hour chart shows a rounded bottom formation that will end on a breakout and close above air resistance at $ 280. This reversal setup has a target of $ 389.90, but it may not be an easy climb as the bears will try to block the rally at $ 340.
Both moving averages have increased and the RSI is in positive territory, indicating an advantage for the bulls. If the price drops from the current level but bounces off the moving averages, it will suggest that sentiment has turned positive and buyers are building up on the lows. This assumption will be invalidated in the event of a failure and will close below $ 215.62.
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 comes with risk, you should do your own research before making a decision.