Bitcoin has been trading in a tightly confined range in August. According to Glassnode lead on-chain analyst Checkmate, the spread between the upper and lower Bollinger Bands for Bitcoin has reached its third-lowest level ever, at 2.9%.
Generally, periods of low volatility are followed by a range expansion. The longer the time spent inside a range, the stronger the eventual breakout from it. Unfortunately, it is difficult to predict the exact timing of the breakout, so traders should be vigilant in order not to miss the opportunity to capitalize on the next trending move.
The strength of the U.S. Dollar Index (DXY) may be one of the factors dragging down risk assets, as it has been increasing for four consecutive weeks.
In contrast, U.S. equities markets have been in a corrective phase over the past few days, as evidenced by the S&P 500 Index (SPX) and the Nasdaq Composite, which have both experienced a decline in the last two weeks.
What are the important support and resistance levels to watch for in Bitcoin (BTC) and altcoins?
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S&P 500 Index price analysis
The S&P 500 Index dipped below the 20-day exponential moving average (EMA) of 4,497 on Aug. 3, and since then, the bears have prevented the bulls from pushing the price back above this level.
The price bounced off the 50-day simple moving average (SMA) of 4,443 on Aug. 14, indicating that the bulls are strongly defending this level. Buyers will attempt to maintain the momentum and push the price back above the 20-day EMA. If they succeed, the index could start its journey to 4,607 and eventually to 4,650.
If bears want to take control, they will have to protect the 20-day EMA and pull the price below the 50-day SMA. That could cause a deeper correction to 4,300 and later to 4,200.
U.S. Dollar Index price analysis
The U.S. Dollar Index held support at the 20-day EMA ($102) on Aug. 4 and again on Aug. 10, indicating a change in sentiment from selling on rallies to buying the rumor sell crypto.
The index has reached the downtrend line, which is likely to act as a formidable resistance. If the price turns down from the downtrend line but rebounds off the 20-day EMA, it will suggest that the trend remains bullish. That will enhance the prospects of a rally above the downtrend line. The index could then soar toward the overhead resistance at 106.
This positive view will invalidate in the near term if the price tumbles below the 20-day EMA. There is minor support at 101.74, but if this level gives way, the index could drop to 100.82.
Bitcoin price analysis
The bears failed to benefit from Bitcoin slipping below the 20-day EMA ($29,458) on Aug. 13 and drive the price to the important support at $28,585. This implies that the selling pressure was not strong at lower levels.
The flat 20-day EMA and the RSI near the midpoint indicate that the buyers and sellers are in equilibrium. This implies that the BTC/USDT pair could remain to consolidate within the range between $28,585 and $30,350 for some time.
The next trending move is likely to begin after the price escapes this range. If the price turns down and dives below the $28,585 support, it could start a decline to $26,000. Conversely, a rally above $30,350 might increase the chances of a bullish crypto move to the overhead resistance zone between $31,500 and $32,400.
Ether price analysis
Ether (ETH) has been staying close to the 20-day EMA ($1,853) in recent days, indicating that the bulls have persisted in their buying pressure while the bears have stayed firm.
The 20-day EMA is levelling out and the RSI is near the midpoint, implying that the selling pressure could be subsiding. If the bulls manage to drive the price above the moving averages, the ETH/USDT pair could surge to $1,930 and then to $2,000.
If the bears wish to preserve their control, they will need to defend the moving averages. If the price dips from the 50-day SMA ($1,877), the pair could plummet to the strong support at $1,816. This is an important point for the bulls to be aware of as a break below it may cause the pair to sink to $1,700.
BNB price analysis
Despite the fact that BNB (BNB) has been trading below the moving averages for the past three days, the bears have not been able to push the price down to the support line of the symmetrical triangle.
If the price does not break out of the triangle within the next few days, then the pattern will become invalid. The flattish moving averages and the RSI near the midpoint indicate that the lack of volatility may continue for a while.
A break and close above the triangle will be the first sign that the bulls have gained the upper hand. The BNB/USDT pair could then rally to the overhead resistance at $265.
On the other hand, a break and close below the triangle could cause the pair to drop to the key support at $220.
XRP price analysis
XRP (XRP) has been fluctuating between the 50-day SMA ($0.62) and the 20-day EMA ($0.65), indicating bulls are buying near the 50-day SMA and bears are selling at the 20-day EMA.
Although buyers have been able to hold the 50-day SMA, the bearishness of the 20-day EMA and the RSI in the negative territory suggest that the bears have the upper hand. If the price fails to bounce off the current level, it may drop below the 50-day SMA, pushing the XRP/USDT pair to $0.56.
Conversely, if the price rises above the 20-day EMA, it will suggest strong buying at lower levels. The pair could then climb to $0.74.
Cardano price analysis
The Cardano (ADA) bulls have been unable to push the price beyond the descending channel pattern seen over the past few days. This suggests that the buying pressure is lacking.
A break and close above the resistance line of the channel could be a sign of strength and could lead to a possible rally to $0.34. If this level is scaled, the ADA/USDT pair may retest the July 14 intraday high at $0.38.
The bears may attempt to sell on the rallies to the resistance line of the channel. If the price turns down from this level, it will indicate that the pair may continue to move within the channel. The key support to keep an eye on the downside is $0.26.
Dogecoin price analysis
Dogecoin’s (DOGE) recovery was rejected at the downtrend line on Aug. 13, indicating that the bears are fiercely defending this level.
The price has reached the support line of the ascending channel, which is an important level to keep an eye on. If the price plummets below the support line, the DOGE/USDT pair could tumble to $0.07.
Contrarily, if the price turns up from the current level and breaks above the downtrend line, it will signal that the bulls remain buyers at lower levels. The pair could first rise to $0.08 and later to the resistance line of the channel at $0.09.
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Solana price analysis
Solana (SOL) is moving within the range between $22.30 and $26. Bulls have a slight edge, as the price is trading above the 20-day EMA ($24.09).
If the current bullish momentum sustains, traders may attempt to push the SOL/USDT pair beyond the resistance at $26. If successful, the pair could gain strength and rally up to $29.12 and further to $32.13.
Alternatively, if the price retreats from $26, it could mean that the pair will remain within the range for a few more days. To gain control, bears will have to pull the price below $22.30.
Polygon price analysis
Despite bulls’ attempts to drive Polygon (MATIC) above the 20-day EMA ($0.69), the bears are not giving up. The moving averages are becoming flat and the RSI is slightly below the midpoint, suggesting a balance between supply and demand.
If the bulls manage to push the price above the 50-day SMA ($0.70), it could be a bullish sign and the MATIC/USDT pair could potentially surge to $0.80. On the other hand, if the price is rejected by the 50-day SMA, it could mean that bears are active at higher levels. This could keep the pair range-bound for a few days.
The bears will have to push the price below the support near $0.65 to gain the advantage. If that happens, the pair could drop to $0.60.
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