BTC/USD Forex Signal: Descending Triangle Signals Breakout
While it is too early to tell, the pair may soon break out lower as bears target the next key support at 30,000.
Bearish View
Set a sell-stop at 32,700 and a take-profit at 30,000.
Add a stop-loss at 34,000.
Timeline: 1-2 days.
Bullish View
Set a buy-stop at 33,500 and a take-profit at 35,000.
Add a stop-loss at 32,000.
The BTC/USD pair is still in consolidation mode as investors wait for the next catalyst. The pair is trading at 33,120, which is about 4% below the highest level last week. It is also about 50% below its all-time high of almost 65,000.
Bitcoin Price in Consolidation
Bitcoin has struggled to find direction in the past few weeks as investors wait for the next catalyst. The pair will likely react modestly to the upcoming US inflation data scheduled for Tuesday. The numbers are expected to show that the headline Consumer Price Index rose by 4.9% in June, a small decline from the previous 5.0%. In the same period, the core CPI is expected to have risen from 3.8% to 4.0%.
Inflation has an impact on Bitcoin prices. Some analysts view it as an ideal hedge against inflation, meaning that they expect its price to rise as prices rise. Recently, however, the price has struggled to find direction even as US inflation has risen to the highest level in more than a decade.
On the other hand, the BTC/USD pair tends to underperform in a high inflation environment since it leads to higher chances of tightening by the Fed. The FOMC minutes published last week shows that some members were starting to advocate for tapering of asset purchases.
The BTC/USD is also wavering as investors wait for the next unlocking by the Grayscale Bitcoin Trust. The Trust will unlock about 40,000 Bitcoins in the next few days. This is because institutional holders of the trust must hold them for six months before selling. Therefore, the rising liquidity could lead to some weakness for Bitcoin.
Further, the recent crackdown in China seems to be easing. On-chain data show that the Bitcoin hash rate is rising, which is a sign that more miners are coming back online.
BTC/USD Technical Analysis
The four-hour chart shows that Bitcoin has been in a consolidation mode recently. The price has found a major resistance at the 34,000 level where it has struggled to move above several times before. It has also found a support at around 30,000. It also seems to be forming a descending triangle pattern. The pair is also below the 25-day and 50-day moving averages. Therefore, while it is too early to tell, the pair may soon break out lower as bears target the next key support at 30,000.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Big crypto needs to prove itself as downside risk multiplies
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Bitcoin price closed the week down -2.9% but remained well above the 50-week simple moving average (SMA).
Ethereum price closed the week down -7.85% after making a brief rebound high.
XRP price closed the week down -8.62% and below the tactically important $0.650 price level.
Bitcoin price is now down -4.44% for the month as it clings to the support formalized by the 12-month simple moving average (SMA). Ethereum price is down -7.75% for the month but barely holds the instructive 2020 ascending trend line. Meanwhile, XRP is down -10.24% this month while navigating a range framed by the inverse head-and-shoulders neckline and the 78.6% Fibonacci retracement level.
Bitcoin price support aligns, but can it hold
Beginning in June, Bitcoin price has been examining the credibility of the support offered by the 12-month SMA, currently at $32,135, with success. The 12-month SMA merges with the head-and-shoulders neckline that extends from January 2021 through May 2021, creating formidable support for intra-month weakness.
Solidifying the support around the 12-month SMA is the 50-week SMA at $31,906 as Bitcoin price has not closed below the tactically important moving average on a weekly basis since the corrective process began in April.
However, on July 8, Bitcoin price triggered a rising wedge pattern that had dominated BTC from the June 22 low of $28,800, augmenting the probability that risk is tilted to the downside moving forward.
The measured move of the rising wedge pattern is 27%, projecting an ultimate Bitcoin price low of $25,000 if the breakdown gains momentum. A decline of that magnitude would shutter the enduring BTC bullish forecast and, more importantly, transform the resilient support around $30,000 into an imposing resistance level for any rebound attempts from the measured move target of $25,000.
The Bitcoin price drop to the measured move target would confirm the breakdown from the larger head-and-shoulders pattern, first triggered on June 22, and displace the BTC support invoked by the 61.8% Fibonacci retracement level of the 2020-2021 rally at $27,175.
Thus, to avoid the bearish outcome, Bitcoin price needs to hold the 12-month SMA at $32,135, the 50-week SMA at $31,906 and the head-and-shoulders neckline at $30,640 on a weekly closing basis.
BTC/USD weekly chart
For now, until Bitcoin price can log a daily close above the wedge’s upper trend line and the Anchored VWAP from October 21 at $37,690, it is forecasted that BTC will continue to churn in the range manufactured since the May 19 low.
Here, FXStreet’s analysts evaluate where BTC could be heading next as it seems bound for a rebound.
Ethereum price surfing critical support as broad crypto market roils
On July 8, Ethereum price collapsed below the lower trend line of a rising wedge pattern at $2,330, resolving the price structure that directed ETH since the doji candlestick low on June 22.
Since the breakdown, Ethereum price has surfed along the support granted by the February high at $2,041, and reinforced by the 200-day SMA at $2,030 and the ascending 2020 trend line now at $1,970.
A daily close below $1,970 would instantly tilt the ETH risk further to the downside and set in motion a drop to the 61.8% Fibonacci retracement of 2020-2021 advance at $1,730. If Ethereum price perfects a weekly close below $1,717, it would trigger the larger descending triangle pattern (highlighted in blue) and announce the potential for an additional 40% plunge based on the measured move of the descending triangle. More specifically, a 40% decline from the triangle breakout would equate to a price below $1,000.
An Ethereum price move of 40% would be challenged by the 12-month SMA at $1,420, the 2018 high at $1,419 and the 50-week SMA at $1,386. In fact, ETH should struggle to extend the sell-off beyond those levels, representing a 34% spike lower from the current price and a 19% decline from $1,717.
ETH/USD weekly chart
A daily close above the 50-day SMA at $2,341 would negate the short-term bearish outlook, but investors should not overlook the descending triangle’s upper trend line, now at $2,570. It will press down on price, limiting upside potential.
Here, FXStreet’s analysts evaluate where ETH could be heading next as it seems bound for an upswing.
XRP price widens trading range, but still void of any actionable clues
Unlike Bitcoin and Ethereum, XRP price triggered a minor rising wedge pattern much sooner, on July 1, before shuffling into a consolidation along the critically important $0.650 price level, which corresponds with the May 23 low. The consolidative process broke on July 8. Ripple now cannot recover $0.65, thereby broadening the trading range, with support currently at the 50-week SMA at $0.566 or the 78.6% retracement level at $0.555.
The wedge’s measured move is around 30%, indicating that XRP price will push through the Fibonacci level and the June low at $0.512 before settling for support at $0.477. To reach the target price, Ripple needs to fall 24% from the current price level.
XRP/USD weekly chart
The best Ripple market operators can hope for at this point is for XRP price to oscillate around $0.650, and only a daily close above $0.770 would disrupt the bearish forecast being depicted in the Ripple charts of various timeframes.
In a cryptocurrency market characterized by wavering commitment and intensifying risk to the downside, market speculators should practice patience and let the digital tokens prove themselves before making definitive trading decisions. It is important to remember that investors have nothing to prove to the markets; instead, the markets must constantly prove themselves.
Here, FXStreet’s analysts evaluate where Ripple could be heading next as it seems bound for an upswing.
Top 5 cryptocurrencies to watch this week: BTC, LUNA, ATOM, CAKE, FTT
Bitcoin (BTC) price is still range-bound and traders are searching for signs that may provide insight about the next directional move. Philip Swift, the creator of analytics resource LookIntoBitcoin, pointed out on July 9 that the Puell Multiple rebounded “out of the green zone of this week” only for the fifth time in history. Swift said if the indicator continues to move up, Bitcoin’s price may follow it higher.
Another positive outlook for Bitcoin came from Lex Moskovski, chief investment officer at Moskovski Capital, who highlighted that Bitcoin’s price was trading about 59% below the target price projected by the stock-to-flow model, which is the largest negative deflection in history. Moskovski said this could be a “great buying opportunity” for traders who believe in the model.
Crypto market data daily view. Source: Coin360
In other news, Capital International, a financial services company, has purchased 953,242 shares of MicroStrategy stock in the second quarter of 2021, according to the business intelligence firm’s filings to the U.S. Securities and Exchange Commission.
Due to its huge Bitcoin holding, MicroStrategy’s stock price largely follows Bitcoin’s trajectory. Therefore, the purchase by Capital International indicates that institutional investors may have started positioning for a bullish move in Bitcoin.
However, not everyone is so bullish. Guggenheim executive Scott Minerd has an extremely bearish view on Bitcoin because he anticipates a drop to $10,000.
Let’s study the charts of the top-5 cryptocurrencies and spot the critical levels that may signal the start of a strong relief rally.
BTC/USDT
Bitcoin has been trading in a tight range between $31,000 and $36,670 for the past few days, which suggests that traders are undecided about the next directional move. Usually, the breakout from a tight range results in a sharp move.
BTC/USDT daily chart. Source: TradingView
Both moving averages are gradually flattening out and the relative strength index (RSI) has been trading close to the midpoint, which suggests a balance between supply and demand. If bulls push the price above $36,670, it will be the first sign of strength.
The BTC/USDT pair could then rally to $41,330 and then to $42,451.67 where the bears are likely to mount a stiff resistance. A breakout of this resistance will indicate the possible start of a new uptrend.
On the other hand, if the price turns down from the current level or the overhead resistance at $36,670, the bears will try to pull the pair down to $31,000 and then to $28,000. A break below this support zone will increase the possibility of the resumption of the downtrend.
The 4-hour chart shows the formation of a descending triangle pattern that will complete on a breakdown and close below $32,268. If that happens, the possibility of a break below $31,000 increases.
On the contrary, if bulls propel the price above the downtrend line, it will invalidate the bearish setup. The failure of a negative pattern is a bullish sign as it traps the aggressive bears who have sold in anticipation of a breakdown. The pair could then rise to $36,670.
LUNA/USDT
Terra protocol’s LUNA token had been trading inside the $7.96 to $3.91 range since the end of May. However, the bulls pushed the price above the resistance on the range on July 9, indicating that demand exceeds supply.
LUNA/USDT daily chart. Source: TradingView
The moving averages have completed a bullish crossover and the RSI has risen close to the overbought zone, suggesting a change in trend.
If bulls sustain the price above $7.96, the LUNA/USDT pair could start a new uptrend. The first target objective on the upside is the downtrend line where the bears will again try to stall the up-move.
If the price turns down from the downtrend line but rebounds off the 20-day exponential moving average or $7.96, it will suggest the formation of a higher low. The buyers will then try to resume the uptrend by pushing the price above the downtrend line.
Contrary to this assumption, if bears pull the price back below $7.96, it will indicate a lack of demand at higher levels. A break below the moving averages will open the doors for a possible drop to $3.91.
Both moving averages are sloping up and the RSI is near the overbought territory on the 4-hour chart, which shows that bulls have the upper hand.
However, the bears have not yet given up as they are trying to stall the up-move close to $8.50. If bulls drive the price above $8.75, the pair could start a new uptrend that may reach $10 and then $12.
Conversely, if the price turns down from the current level and breaks below $7.46, the pair may drop to the 50-simple moving average.
ATOM/USDT
Cosmos (ATOM) has been trading between $17.56 and $8.51 for the past few days. The bulls pushed the price above the 50-day SMA ($12.66) on July 5, which was the first sign of strength.
ATOM/USDT daily chart. Source: TradingView
Thereafter, bears tried to trap the aggressive bulls and pull the price down but they could not break the 20-day EMA ($12.54) support. This suggests buying on dips.
The moving averages are on the verge of a bullish crossover and the RSI is in the positive territory, which suggests that the correction may have ended. The bulls will now try to push the price to the resistance of the range at $17.56 where the bears are likely to pose a stiff challenge.
This bullish view will be negated if the price turns down from the current level and the bears sink the ATOM/USDT pair below $11.41. Such a move could open the doors for a drop to the critical support at $8.51.
The price has been trading inside an ascending channel for the past few days. Both moving averages are sloping up and the RSI is in the positive zone, indicating the path of least resistance is to the upside.
If the price rebounds off the 20-EMA, the bulls will try to break the pair above the resistance line of the channel. If they succeed, the pair could pick up momentum and rally to $17.56.
On the contrary, if bears sink the price below the moving averages, the pair could drop to the trendline of the channel. A break below this support will shift the advantage in favor of the bears.
CAKE/USDT
PancakeSwap (CAKE) has been sandwiched between the moving averages for the past five days. This consolidation shows that bears are defending the 50-day SMA ($15.67) while the bulls are buying the dips to the 20-day EMA ($14.55).
CAKE/USDT daily chart. Source: TradingView
However, this tight range trading is unlikely to continue for long and may result in a strong move within the next few days. The RSI has risen into the positive territory, indicating that bulls have a minor advantage.
If buyers push and sustain the price above the 50-day SMA, the CAKE/USDT pair could rally to $18.62 and later to $21.52.
Alternatively, if the price turns down and plummets below the 20-day EMA, the bears might pull the price down to $12.39. A break below this support could open the doors for a retest of the critical support at $10.
The 4-hour chart shows that the price is rising inside an ascending channel. Both moving averages are sloping up gradually and the RSI is in the positive zone, suggesting that buyers have the upper hand.
The bulls will now try to push the price into the upper half of the channel. If they succeed, the pair could rise to the resistance line of the channel near $17. Contrary to this assumption, if the price turns down and breaks below the trendline of the channel, it will suggest an end of the short-term up-move.
Related: Key altcoin price metric flashed bullish ahead of Axie Infinity’s parabolic rally
FTT/USDT
FTX Token (FTT) broke above the downtrend line on July 6, suggesting that the correction may have ended. The bears tried to stall the recovery at the 50-day SMA ($30.26) on July 8 but could not sink the price below the 20-day EMA ($28.68).
FTT/USDT daily chart. Source: TradingView
The price rebounded off the 20-day EMA on July 9 and the bulls are trying to push the FTT/USDT pair above the 50-day SMA. The 20-day EMA has started to turn up marginally and the RSI has risen into the positive zone, indicating that bulls are attempting to make a comeback.
If buyers propel and sustain the price above the 50-day SMA, the pair could start a relief rally that may reach $34.73 and then $36.73.
This bullish view will invalidate if the price turns down from the current level and plummets below the 20-day EMA. Such a move will suggest that bears are selling on rallies. The pair could then drop to the next support at $25.22.
The 4-hour chart shows that bulls have pushed the price above the overhead resistance at $30.50. The rising moving averages and the RSI in the positive territory suggest the path of least resistance is to the upside.
If buyers sustain the price above $30.50, the pair could extend its relief rally to $33 and then to $34.73. This positive view will be invalidated if the price turns down from the current level and breaks below $29.50. Such a move could pull the pair down to $28.
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.