August 2 the total crypto market capitalization dropped from about $359 billion to $310 billion within a few minutes of Bitcoin (BTC) price surging above the $12K mark.
A fall of such magnitude usually drives away the bulls or at least keeps them at bay until the market stabilizes, but that is not what happened.
The bulls aggressively purchased the dips, which led to a sharp recovery, suggesting that the sentiment is bullish and traders expect the rally to continue in the next few days.
Daily cryptocurrency market performance. Source: Coin360
Meanwhile, Goldman Sachs is bullish on gold and forecasts a target of $2,300 per troy ounce before the end of 2022. The main reason for the continued rally in gold according to the analysts at Goldman is the “record level of debt accumulation” and “real concerns around the longevity of the US dollar as a reserve currency.”
While Goldman Sachs only talked about gold, both the same logic could be applied to Bitcoin. Even if Bitcoin only manages to retest its all-time high before 2022, it still would have outperformed gold by a huge margin.
Bitcoin corrected from just below the $12,304.37 level on Aug. 2, as suggested in the previous analysis. It dipped to an intraday low of $10,525, which completed a retest of the breakout level from the inverse head and shoulders pattern.
BTC/USD daily chart. Source: TradingView
The buyers purchased the dip on Aug. 2, which is a huge positive as it suggests that the sentiment has turned bullish. If the sentiment was weak, traders would not have stepped in to buy at $10,500.
Due to the fall on Aug. 2, the relative strength index corrected from its overbought levels, suggesting that the weaker hands have been shaken out.
The bulls will once again attempt to carry the BTC/USD pair above the resistance at $12,113.50. If they succeed, the uptrend is likely to resume with the next target at $13,000 and then $14,000.
This assumption will be invalidated if the pair turns down from the current levels and breaks below the $10,400 support.
The strong rally in Ether (ETH) pushed the RSI to 88 levels, which had previously resulted in a correction. This time also, the biggest altcoin plunged on Aug. 2, but the correction was short-lived.
ETH/USD daily chart. Source: TradingView
Although the ETH/USD pair dipped to a low of $328.507 on Aug. 2, the bulls aggressively purchased at lower levels that resulted in a close (UTC time) at $372.629. This shows that even after the sharp rally of the past few days, the bulls expect the uptrend to extend further to $480.
Both moving averages are sloping up and the RSI is in the overbought zone, which suggests that the bulls are in command.
The first sign of weakness will be a break below $366. Such a move will increase the possibility of a pullback to the 20-day EMA ($311). A break below this support could signal a possible change in trend.
XRP formed a doji candlestick pattern on Aug. 2, which indicates indecision among the bulls and the bears. In a hugely volatile trading day, the altcoin hit an intraday high of $0.326113 and an intraday low of $0.25041.
XRP/USD daily chart. Source: TradingView
Currently, the bulls are attempting to resume the up move, which is a huge positive. This shows that the bulls are unperturbed about the volatile trading day yesterday and are buying aggressively.
However, the RSI has risen deep into the overbought territory, which increases the possibility of a minor correction or a pullback from the overhead resistance of $0.346727. Therefore, chasing prices higher from the current levels might be risky. A break below $0.284584 will indicate weakness and could result in a deeper correction.
Contrary to this assumption, if the momentum can push the price above $0.346727, the uptrend can extend to $0.40.
Bitcoin Cash (BCH), which was rising towards the target objective of $360, turned down from $337.90 and plummeted to an intraday low of $245 on Aug. 2. However, the only positive thing was that the price recovered from the intraday lows and the altcoin closed (UTC time) at $283.78.
BCH/USD daily chart. Source: TradingView
Today, the BCH/USD pair took support at $280.47 and the bulls are now attempting to push the price back towards $353. The upsloping 20-day exponential moving average ($267) and the RSI in the positive territory suggests that bulls have the upper hand.
Contrary to the assumption, if the pair again turns down from the higher levels and breaks below $280.47, it will be a huge negative. Such a move will indicate a lack of demand at higher levels.
Bitcoin SV (BSV) reversed direction from just below the overhead resistance of $260.86 on Aug. 2, which suggests profit booking by the short-term traders. This pulled the altcoin back below the critical $227 support, which is a negative sign.
BSV/USD daily chart. Source: TradingView
The failure of the bulls to stage a strong recovery and push the price back above $227 on Aug. 2 suggests a lack of demand at higher levels.
Currently, the bulls have driven the price back above $227. If they can sustain the higher levels, the BSV/USD pair can move up to $260.86. A breakout of this level can result in a rally to $300.
However, if the bulls fail to sustain the price above $227, the pair is likely to remain range-bound between $200–$227.
Litecoin (LTC) turned down sharply from just above the overhead resistance of $64 on Aug. 2, which suggests profit-booking by short-term traders. This pulled down the altcoin to $51.885, which is close to the critical $51 support.
LTC/USD daily chart. Source: TradingView
The bulls bought the dip aggressively that helped the LTC/USD pair recover the intraday losses and close (UTC time) at $56.7891. Both moving averages have started to turn up and the RSI is trading in the positive territory, which suggests that the bulls have the upper hand.
The buyers are currently attempting to carry the price back towards $64 levels. A breakout and close (UTC time) above $65.1573 will resume the uptrend with the next target at $80. This bullish view will be negated if the pair turns down from the current levels and breaks below $51.
Cardano (ADA) broke below the $0.13–$0.15 range on Aug. 2 and also the 20-day EMA ($0.132), but the positive thing is that the bulls aggressively purchased the dip to $0.1201664.
ADA/USD daily chart. Source: TradingView
By close (UTC time), the ADA/USD pair had risen back above the 20-day EMA. Currently, the bulls are attempting to push the price above the $0.15–$0.1543051 resistance zone. If they succeed, the next target to watch out for is $0.173.
However, if the bulls fail to push the price above the resistance zone, the pair might remain range-bound for a few more days. The trend will turn in favor of the bears if the pair sinks below the $0.13–$0.12 support.
Crypto.com Coin (CRO) remains in a strong uptrend. The dip on Aug. 2 did not even reach the 20-day EMA ($0.155), which suggests that the majority of the bulls are in no hurry to book profits as they expect the rally to continue.
CRO/USD daily chart. Source: TradingView
The bulls are currently attempting to resume the uptrend. If they can push the price above the $0.176596 resistance, the next target to watch out for is $0.20. Both moving averages are rising and the RSI is in the overbought zone, which indicates that the bulls have the upper hand.
Contrary to the assumption, if the CRO/USD pair turns down and plummets below the $0.15306 support, it would signal a possible change in trend.
The short-term traders booked profits on Aug. 2 as Binance Coin (BNB) failed to sustain above the overhead resistance at $21.7628. This dragged the altcoin to the 20-day EMA ($19.54).
BNB/USD daily chart. Source: TradingView
The bulls purchased this dip aggressively, which helped the BNB/USD pair recover sharply from the intraday low of $19.10 to close (UTC time) the day at $20.9898. Today, the bulls have pushed the price above $21.7628.
The 20-day EMA is sloping up and the RSI is in the overbought zone, which suggests that bulls have the upper hand. The first target on the upside is $22.93 and above that $24.
This bullish view will be invalidated if the pair turns down from the current levels or from one of the overhead resistance levels and drops below $19.
The correction in Chainlink (LINK) that started from $8.908 on July 15, repeatedly found buying support closer to the $6.8221 level, which is the 50% Fibonacci retracement level of the most recent leg of the rally.
LINK/USD daily chart. Source: TradingView
Even on Aug. 2, the LINK/USD pair dropped to an intraday low of $6.87 but strong buying at lower levels resulted in a sharp recovery. By close (UTC time), the pair had risen to $8.2814, which shows that the bulls continue to buy the dips as they expect the uptrend to continue.
If the buyers can propel the price above $8.908, the next target to watch out for is $11. The uptrending moving averages and the RSI in the positive territory suggest that bulls have the upper hand. This positive view will be negated if the bears sink and sustain the price below $6.50.
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Market data is provided by HitBTC exchange.