Digital Investment Products on the Rise: Can Bitcoin Break Through?
The past week has been a roller coaster for both equity and cryptocurrency markets. While the S&P 500 Index (SPX) dipped by 2%, cryptocurrency traders remained undeterred. Bitcoin saw a notable surge, climbing approximately 12% within the same period. This resurgence in digital assets raises the question: Is Bitcoin on the cusp of reaching a new all-time high, or will it falter before it gets there?
Digital Asset Investment Products Soar
According to CoinShares, digital asset investment products experienced robust inflows of $1.35 billion last week. This influx has propelled the total inflows over the past three weeks to a substantial $3.2 billion. Bitcoin’s strong performance also led to outflows of $1.9 million from short-Bitcoin exchange-traded products, indicating a shift in market sentiment towards optimism.
Bitcoin's Sideways Struggle
Despite the recent rally, Bitcoin remains trapped in a sideways trading pattern. As it nears key resistance levels, bears are expected to mount significant resistance. Analysts, however, maintain a positive outlook, suggesting that Bitcoin could achieve a new all-time high. The crucial question remains: Can Bitcoin break through to $70,000, or will traders push it back below $65,000?
S&P 500 Index Analysis
The S&P 500 Index is undergoing a correction within an overall uptrend, as short-term traders book profits after a prolonged rally. The index dipped below the 20-day simple moving average (SMA) of 5,504 on July 19. Despite attempts by buyers to reclaim this level, the bearish momentum may drive the index down to the 50-day SMA (5,416) if it fails to recover.
US Dollar Index Analysis
The US Dollar Index (DXY) has been trending downward within a descending channel, reflecting negative sentiment. The price rebounded from the channel’s support line on July 18, showing strong defense by bulls. If the index surpasses 104.50, it could reach the 20-day SMA (104.95), which is likely to present significant resistance. A break above the channel could signal the start of a rally to 108.
Bitcoin Price Analysis
Bitcoin bounced back from the $66,000 level on July 21 but faced selling pressure near $68,500 on July 22. If the $66,000 support breaks, the BTC/USDT pair could drop to the 50-day SMA ($63,799). A strong rebound from this level would indicate positive sentiment and buying interest on dips. The bulls would then aim to push the price towards the resistance zone between $72,000 and $73,777. Conversely, a break below the 50-day SMA could see Bitcoin sliding to the 20-day SMA ($61,126).
Altcoin Highlights
Ethereum (ETH)
Ethereum rose above the 50-day SMA ($3,425) on July 19, but the momentum waned, indicating weak demand at higher levels. Bears are attempting to pull the price back below the 50-day SMA, potentially pushing it down to the 20-day SMA ($3,246). To avoid this, bulls need to defend the moving averages and aim for a rally towards $3,600 and beyond.
Binance Coin (BNB)
BNB has been fluctuating within a range of $495 to $635, suggesting buying on dips and selling on rallies. Bulls breached the 50-day SMA ($586) on July 19 but struggled to maintain the upward momentum. If the price drops below the 50-day SMA again, BNB could fall to the 20-day SMA. Overcoming the $635 resistance could trigger a rally to $722.
Solana (SOL)
Solana broke above its downtrend line on July 20, setting the stage for a potential rally to $210. However, bears are likely to challenge the rally near $189. A bounce off the downtrend line would indicate strong support and increase the likelihood of reaching $210. A break below the line could see Solana dropping to its moving averages.
XRP
XRP saw aggressive buying on dips, preventing a sustained fall below the breakout level of $0.57. Bulls are now aiming to push the price above $0.64, potentially reaching $0.67 and later $0.74. Bears are expected to defend the $0.74 level vigorously, maintaining the possibility of range-bound action.
Toncoin (TON)
Toncoin turned down from its moving averages, with the 20-day SMA ($7.29) starting to decline. This suggests a slight bearish advantage. The TON/USDT pair could slide to the solid support at $6.77, which might attract strong buying. A break and close below $6.77 could initiate a downtrend, while a rise above $7.72 might challenge the $8.29 resistance.
Dogecoin (DOGE)
Dogecoin rebounded from the 20-day SMA ($0.12) and broke above the 50-day SMA ($0.13), indicating bullish momentum. The DOGE/USDT pair could aim for the overhead resistance at $0.18. On the downside, the 50-day and 20-day SMAs are expected to provide strong support.
Cardano (ADA)
Cardano has been trading above its moving averages but struggles to push past $0.46, indicating weak demand at higher levels. The ADA/USDT pair could remain range-bound between the moving averages and $0.46. A breakout above $0.46 could signal an uptrend towards $0.52, while a drop below the moving averages might push the pair to $0.35.
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