Latest Market Overview 5th Aug: SPX, DXY, BTC, ETH, BNB, SOL, XRP, DOGE, TON, ADA

Global equity markets experienced a significant sell-off, causing the Bitcoin market and several major cryptocurrencies to plummet to unexpected lows.

On 5th August, Bitcoin dropped below the critical $50,000 mark as traders panicked following a crash in the Japanese stock market. Data from Coinglass revealed $1.08 billion in liquidations from leveraged positions or collateral trades.

The pressing question for traders is whether the correction will deepen or if a relief rally is imminent. Prominent analyst Rekt Capital noted on X that Bitcoin’s “downside deviation” might persist for around two months.

Some experts predict a further decline. Alex Kuptsikevich, a senior market analyst at FXPro, told Cointelegraph that Bitcoin’s downward trend could push it down to $42,000.

Bitcoin has broken down from its large range several times, but the first break tends to be a fake move. Markets quickly reverse direction and catch traders off guard. Bitcoin may witness a short squeeze within the next few days if that happens.

What important resistance levels must the bulls conquer to trap the aggressive bears? Let’s analyze the charts to find out.

S&P 500 Index (SPX) Market Analysis

The S&P 500 Index fell and closed below the 50-day simple moving average (5,448) on Aug. 2, indicating a short-term trend change.

The index gapped sharply on Aug. 5, but a positive sign is that the lower levels attract buyers. If the price rises and maintains above 5,265, the index could rally to the moving averages, a crucial resistance to watch out for on the upside.

If the price turns down from the moving averages, it will signal that the sentiment has turned bearish and the rallies are being sold into. The bears will then try to tug the price to the psychological level of 5,000.

US Dollar Index (DXY) Market Analysis

The US Dollar Index turned down from the 20-day exponential moving average (104.22) on Aug. 2 and fell below the channel’s support line.

The index is trying to find support at 102.35. Buyers will try to push the price to the channel’s breakdown level. If the price turns down from the breakdown level, it will signal that the bears have flipped the level into resistance. That will increase the likelihood of a drop to 102 and then to 101.

Bitcoin (BTC) Market Analysis

Bitcoin’s sideways price action resolved to the downside with a drop below the solid support of $55,724, signalling that the traders are rushing to the exit.

However, the long tail on the candlestick shows that the bears are struggling to sustain the lower levels. This suggests that selling dries up at lower levels. The bulls will try to make a comeback by pushing the price back above $55,724.

If they manage to do that, it will signal that the markets have rejected the breakdown. That may result in a short squeeze, pushing the BTC/USDT pair to the moving averages.

Bears must guard the $55,724 level fiercely if they want to maintain control. If they do that, the pair may again slide toward the vital support at $49,000 and eventually to $42,000.

Ether (ETH) Market Analysis

Ether nosedived below the $2,850 support on Aug. 4, completing a descending triangle pattern.

The selling picked up on Aug. 5, pulling the price toward the psychological support at $2,000. A minor positive is that the bulls bought the dip, as seen from the long tail on the candlestick.

The oversold levels on the RSI also suggest that a relief rally is likely soon. The ETH/USDT pair could reach the breakdown level of $2,850.

Contrary to this assumption, if the price fails to reach $2,850, it will signal a lack of aggressive buying by the bulls. That may increase the possibility of a break below $2,000.

BNB Price Analysis

BNB’s range-bound action between $495 and $635 resolved to the downside on Aug. 5, indicating that bears are trying to seize control.

However, the long tail on the candlestick shows aggressive buying near $400. The oversold level on the RSI also suggests that the selling may have been overdone in the short term, and a relief rally could be around the corner.

The BNB/USDT pair will attempt to rise back above the breakdown level of $495. If that happens, it will signal that the markets have rejected the breakdown.

This optimistic view will be invalidated if the price drops sharply from $460. Such a move would suggest that the bears have flipped the level into resistance. The pair may then sink to $400 and subsequently to $350.

Solana (SOL) Price Analysis

Solana has been oscillating between $116 and $210 for several months, indicating buying on dips and selling on rallies.

The price rebounded off solid support at $116, signaling that the bulls are active at lower levels. The SOL/USDT pair could reach the moving averages, which are the key resistance levels to watch.

If the price turns down from the moving averages, the bears will try to sink the pair below $116. If they succeed, the fall could reach $100 and then $80.

On the upside, a close above the moving averages will suggest that the selling pressure is reducing. The pair may extend its stay inside the extensive range for a few more days.

XRP Price Analysis

XRP’s fall below the 50-day SMA ($0.52) on Aug. 5 indicates that the price may remain stuck inside the extensive range between $0.41 and $0.64 for some time.

In an extensive range, traders buy the dips near the support and sell close to the resistance. The bulls will likely defend the $0.46 to $0.41 zone with all their might because a break below it may open the doors for a fall to $0.35 and then to $0.30.

On the upside, a break and close above the 50-day SMA will be the first sign that the range-bound action may continue for a while longer. After failing to break below the range, the XRP/USDT pair may climb toward the resistance at $0.64.

Dogecoin (DOGE) Price Analysis

Dogecoin plummeted below the $0.10 psychological support on Aug. 5, indicating that the bears are in control.

The price increased from the $0.08 support, signalling that the bulls are trying to stall the decline. The DOGE/USDT pair could rise to $0.10 and then to the moving averages. A sharp rebound will suggest that the downtrend may be over, and the pair could enter a base-building period by trading in a range.

On the contrary, if the price drops from $0.10, it will indicate a lack of buyers, increasing the risk of a fall to $0.06.

Toncoin (TON) Price Analysis

Toncoin completed a double top pattern when it fell below $6.77 on July 25. The bulls’ failure to push and maintain the price back above $6.77 intensified selling on Aug. 2.

The TON/USDT pair reached crucial support at $4.72 on Aug. 5, which is likely to remain solid. Buyers have started a relief rally, which could reach $5.50 and then $6.36. The oversold level on the RSI also indicates a possible bounce in the near term.

This optimistic view will be negated soon if the price turns down from the overhead resistance and breaks below $4.72. That could intensify selling, pulling the pair to the next support near $3.50.

Cardano (ADA) Price Analysis

Cardano fell below the crucial support at $0.32 on Aug. 5, but lower levels attracted buying, as seen from the long tail on the candlestick.

The sharp selling of the past few days has pulled the RSI into the overbought zone, suggesting that a relief rally may be around the corner. The recovery could reach the moving averages, where the sellers are likely to step in. If the price turns sharply from the moving averages, the ADA/USDT pair could drop to the $0.24 support.

Buyers must drive and maintain the pair above the downtrend line to signal a potential trend change.

Source – Rakesh Upadhyay