Bitcoin (BTC) is in a free fall, breaking below the psychological $60,000 support on Aug. 4. Bitcoin came under intense selling pressure this week as traders reduced risk following the roughly 6% plunge in the Japanese stock market, Nikkei, on Aug. 2. The weaker than expected July jobs report on Aug. 2 did not help matters and the Nasdaq Composite fell into the correction territory, down more than 10% from its record high.
Even after the recent fall, Bitcoin remains stuck inside a large range. Although it is difficult to predict the direction of the breakout from a range, Bitcoin whales remain bullish. Whale addresses holding over 1,000 Bitcoin have added 84,000 Bitcoin in July. Also, nearly 64,000 Bitcoin left whale exchange balances in the past 30 days, the most since 2015, according to the whale net position change metric by Glassnode.
Bitcoin’s weakness has pulled several altcoins lower, indicating that the buyers are staying on the sidelines. However, as Bitcoin drops closer to the bottom of its range, buyers are likely to step in. That is expected to start a bounce in select altcoins.
What are the crucial levels to watch out for in Bitcoin from where a recovery may start? Let’s look at the top 5 cryptocurrencies that may lead the cryptocurrency markets higher.
Bitcoin price analysis
Bitcoin is witnessing intense selling pressure since breaking below the moving averages on Aug. 2. The freefall sliced through the $60,000 support on Aug. 4,
The 20-day exponential moving average ($63,855) has started to turn down, and the relative strength index (RSI) is close to the oversold territory, suggesting that the bears have seized control.
Any recovery attempt is likely to be met with stiff resistance at the 20-day EMA. If the price turns down sharply from the 20-day EMA, it will increase the risk of a break below the vital support of $55,724.
Conversely, a break and close above the 20-day EMA will signal that the BTC/USDT pair may remain stuck inside the range for some more time.
The 4-hour chart shows that the bulls failed to stall the decline at the $60,000 level. This suggests that every minor rise is being sold into. The next support on the downside is $55,724 and then $53,485. Buyers will try to defend this zone with all their might because the failure to do so may start a deeper correction.
The bulls will have to push and maintain the price above the 20-EMA to suggest that the bears may be losing their grip. The pair could then rise to the 50-simple moving average.
Solana price analysis
Solana (SOL) has been trading inside a large range between $116 and $210 for several months, indicating buying on dips and selling on rallies.
The bears have pulled the price below the moving averages, but the SOL/USDT pair is likely to find support in the $127 to $116 zone. If the price rebounds from the current level or the support zone, it is expected to face selling at the 20-day EMA ($162).
If the price turns down sharply from the 20-day EMA, the pair may retest the support zone. On the other hand, a break and close above the 20-day EMA will open the doors for a rally to $188.
The 4-hour chart shows a sharp fall, pulling the price into the oversold territory. The pair is expected to find support in the $135 to $121 zone. If that happens, the pair is likely to rise to the 20-EMA. This is an essential level to watch out for because a break above it could push the pair to $165.
Contrarily, if the relief rally fails to cross above the 20-EMA, it will signal that the bears are selling on every minor rise. The pair could then retest the critical support at $121.
XRP price analysis
The bulls’ failure to maintain XRP (XRP) above $0.64 attracted heavy selling, which has pulled the price to the 50-day SMA ($0.52).
If the price rebounds off the current level, the bulls will try to drive the XRP/USDT pair above the 20-day EMA ($0.57). If they manage to do that, it will signal that the pair may start a rally toward $0.64.
This optimistic view will be negated if the price continues lower and breaks below the 50-day SMA. The pair could then drop to the $0.46 to $0.41 support zone, which is likely to attract solid buying by the bulls.
The downsloping moving averages and the RSI near the oversold territory indicate that the bears have the upper hand. Minor support is at $0.52, but the bears will try to maintain the momentum and sink the pair to $0.46.
If bulls want to prevent the downside, they will have to swiftly kick the price above the 20-EMA. That will open the gates for a recovery to the 50-SMA, where the bears will try to stall the up move.
Related: Bitcoin price loses $60K, but a maturing Wyckoff signal gives hope
Kaspa price analysis
Kaspa (KAS) turned down sharply from $0.21 on Aug. 1, but the bulls are trying to find support at the 50-day SMA ($0.17).
Buyers will have to drive the price above the 20-day EMA ($0.18) to suggest the start of a recovery. The KAS/USDT pair will then attempt to clear the hurdle at $0.19. If that happens, the pair may start a rally toward $0.24.
Alternatively, if the price continues lower and breaks below the 50-day SMA ($0.17), it will signal that the bulls are rushing to the exit. That may start a deeper correction to $0.16 and later to $0.14.
The 4-hour chart shows that the pair attempted to bounce off $0.17, but the bears sold near the $0.18 level. If the $0.17 level cracks, the pair could drop to the uptrend line, which is likely to act as solid support.
If the price rebounds off the uptrend line, the bulls make another attempt to push the pair above the 20-EMA. Contrarily, a break below the uptrend line will signal the start of a deeper correction toward $0.14.
Aave price analysis
Buyers pushed Aave (AAVE) above the $115 overhead resistance on Aug. 1 but failed to sustain the higher levels.
The bulls attempted a relief rally from the 20-day EMA ($101) on Aug. 4, but the long wick on the candlestick shows selling at higher levels. If the price slips below the 20-day EMA, the next stop is likely to be the 50-day SMA ($93).
This negative view will be invalidated in the near term if the price turns up from the current level and breaks above $115. Such a move will signal that the sentiment remains positive and traders are buying on dips. The AAVE/USDT pair may then climb to $130.
The bulls pushed the price above the moving averages on the 4-hour chart but failed to sustain the higher levels. The bears sold aggressively and pulled the price back below the moving averages.
There is strong support in the $96 to $102 zone. If the price rebounds off this zone and maintains above the 20-EMA, it will signal that the correction may be over. On the contrary, a break below the zone could sink the pair to $85.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
