bitcoin (BTC) made a strong comeback in July and is on track for its best monthly gains since October 2021. The strong rally in Bitcoin and several altcoins pushed the Crypto Fear and Greed Index to 42/100 on July 30 , its highest level since April 6.
Investors seem to be making the most of Bitcoin’s depressed levels. Data from on-chain analytics firm Glassnode shows that Bitcoin in exchange wallets fell to 2.4 million Bitcoin in July, down from March 2020 levels of 3.15 million Bitcoin. This sent the metric to its lowest level since July 2018.
Mike McGlone, senior commodities strategist at Bloomberg Intelligence, pointed out that the US Federal Reserve’s indication to consider “meeting-by-meeting” rate hikes could lay the groundwork for a Bitcoin will outperform most assets. He said Bitcoin’s “risk versus reward tilts favorably for one of the biggest bull markets in history.”
Could Bitcoin extend its short-term rally and could this trigger some altcoins to buy? Let’s study the charts of the top 5 cryptocurrencies that are likely to outperform in the short term.
Attempts by the bulls to hold the price above $24,276 have failed over the past two days, indicating that the bears are defending the level with vigor. However, a small bright spot is that the bulls have not given ground to the bears.
This indicates that the bulls are not booking profits in a hurry as they expect a break above the overhead resistance. If the price breaks and closes above $24,276, the BTC/USDT pair could gain momentum and rally towards $28,171. This level may act as resistance, but if the bulls overcome the barrier, the next stop could be $32,000.
The rising 20-day exponential moving average ($22,480) and the relative strength index (RSI) in positive territory indicate that the bulls have the upper hand.
To invalidate this short-term bullish view, the bears will need to drive the price below the 20-day EMA. This could pave the way for a possible decline in the 50-day simple moving average ($21,386) and then the support line. A break below this level will suggest the bears are back in control.
The 4-hour chart shows that the bulls pushed the price above the broad resistance at $24,276 but were unable to build on the breakout. The bears have pulled the price back below the level but are struggling to push the pair down below the 20-EMA. This indicates that the bulls are buying on the dips.
If the price rebounds from the current level, the bulls will have another hit in the overhead zone between $24,276 and $24,668. If this area is scaled, the bullish momentum could pick up further. Conversely, if the bears cause the price to fall below the 20-EMA, the pair could fall to the 50-SMA.
Binance Coin (BNB) crossed above the downtrend line on July 28, indicating a potential trend change. The upward move is facing resistance near the psychological $300 level, but a positive sign is that the buyers haven’t given much ground. This suggests that the bulls are not rushing to take profits.
The upward sloping 20-day EMA ($263) and the RSI in positive territory indicate that the path of least resistance is to the upside. If the buyers push the price above $300, the BNB/USDT pair could resume its uptrend towards the overhead resistance at $350.
Alternatively, if the price declines and falls below $285, the pair could drop to the downtrend line. The 20-day EMA is placed near this level, so it becomes an important support to watch. If the bears cause the price to drop below the 20-day EMA, the pair could decline to the 50-day SMA ($239).
The pair denied the overhead resistance at $300, but the bulls are trying to defend the 20-EMA. This indicates buying on dips. The bulls could once again attempt to push the price above $300. If they succeed, the uptrend could resume. The pair could rise to $311 and then to $322.
This positive view could be invalidated in the short term if the price turns down and breaks below the 20-EMA. If this happens, the pair could slide towards the 50-SMA. Buyers should defend this level aggressively as a break and close below could open the doors for a decline to $239.
Uniswap (United) rebounded from the $6.08 breakout level on July 26, indicating strong bearish buying. The bullish move reached near the psychological resistance at $10 on July 28, where the bears are mounting a strong defense.
The ascending moving averages and the RSI in positive territory indicate an advantage for the buyers. If the price rebounds from $8.11, it will suggest that the buyers are trying to turn this level into support.
A strong rebound from $8.11 could open the doors for a retest at $10. The bulls will need to clear this overhead hurdle to signal the start of the next leg up to $12.
Conversely, if the price declines and breaks below $8.11, the UNI/USDT pair could fall to the 20-day EMA ($7.48). A break and close below this level will suggest that the bullish momentum has weakened.
The 4-hour chart shows that the bulls are trying to defend the 20-EMA. If the price rises from the current level and breaks above $9.18, the pair could challenge the overhead resistance zone between $9.83 and $10.
Alternatively, if the price breaks below the 20-EMA, it will suggest that the supply exceeds the demand. The pair could then fall into the area between $8.11 and the 50-SMA. This is an important area for the bulls to defend because if they don’t, the short-term momentum could shift in favor of the bears.
After remaining in a narrow range for several days, Filecoin (THREAD) broke out sharply on July 30, signaling a potential change in trend. The RSI has moved into the overbought territory, which is another sign that the downtrend may be ending.
The upside move may face resistance at the overhead resistance at $9.50, but if the bulls don’t give much ground from this level, the likelihood of a breakout increases. If that happens, the FIL/USDT pair could start its march north towards $16, which again could act as strong resistance.
If the price declines from the current level and retraces below $6.55, this will suggest that the bears are active at higher levels. The pair can then swing in a wide range between $5 and $9.50 for a few days.
The pair gained momentum after breaking above $6.40. The bears attempted to lock in the upside at $8.89, but the bulls had other plans. They aggressively bought the dip and pushed the price near strong overhead resistance at $9.50.
If the price declines from the current level, the bulls will attempt to stop the pullback at the 38.2% Fibonacci retracement level of $8.04. A strong rebound from this level will increase the possibility of a break above $9.50. If that happens, the pair could rally to $10.82. This bullish view could invalidate below $7.70.
Theta Network (THETA) has been consolidating between $1 and $1.55 for several days. The bulls tried to push the price above the overhead resistance on July 30, but the bears held on.
If the price bounces off the moving averages, the bulls will again attempt to clear the overhead hurdle at $1.55. If successful, THETA/USDT could start a new uptrend. The rally might hit the pattern target of $2.10 first and if that level is breached, the rally might extend to $2.60.
Contrary to this assumption, if the price breaks below the moving averages, the bears will try to pull the pair to $1. Such a move could indicate that the beach-related action may continue for a few more days.
The 4-hour chart shows the pair down $1.50 and struggling to bounce off the 20-EMA. This indicates that traders can record profits on every minor rise.
If the price holds below the 20-EMA, the pair could fall to the 50-SMA. This is an important level for bulls to defend as a break below could send the pair down to $1.15.
Alternatively, if the price bounces off the moving averages with strength, it will suggest that lower levels are attracting buyers. If the bulls push the price above $1.42, a retest of the $1.50-$1.55 resistance zone is possible.
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.