July was a bit kinder to altcoins than bitcoin (BTC), although there were exceptions. BeInCrypto’s editorial team tried to look into the near future and give their predictions for the cryptocurrency market for the upcoming August.
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Altcoins will continue to outperform BTC
The Bitcoin Dominance Index (BTCD) has risen significantly since hitting a low of 39% in September 2022. The rise gained momentum in February and shortly thereafter the price broke through the 48% resistance level.
Breaking this resistance area was critical as it had been on the chart for a long time. The breakdown of such long-term levels often leads to significant upward movements. As expected, BTCD reached a high of 52.20% in June.
No next distinct horizontal resistance is currently in sight. However, as the results of technical analysis of the weekly chart show, a number of signs point to the possible formation of a local top.
First, the weekly relative strength index (RSI) is deep in the overbought zone and has almost reached a new all-time high. In the past, reaching these levels has led to sharp declines (red circle).
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Secondly, BTCD has encountered a Fibonacci resistance level of 0.382 retracement at 52% (red icon). Fibonacci levels are traditionally considered the most likely springboards for stopping and reversing price after a significant advance in any one direction. As expected, at these levels, the market may regain some of the distance traveled and only then resume moving in the original direction. In addition, they can determine the limits of the price move.
As a result, there is a possibility that BTCD will continue to decline towards the 48% level, which could subsequently act as support. The development of such a scenario would indicate that altcoins could surpass bitcoin.
Such a scenario would indicate that altcoins could surpass bitcoin.
Source: TradingView
But this prediction will become invalid if BTCD closes the week’s trading above 52% In this case, the more likely scenario would be a sharp rise to the next important Fibonacci resistance level at 60.33%.
But this prediction will become invalid if BTCD closes the week’s trading above 52%.
Ethereum (ETH) is set to rise at least 10% against BTC
The second crypto forecast is related to the ETH/BTC pairing. It has been declining since September 2022. Although this movement means that the trend is bearish, it was contained inside a descending wedge, which is considered a bullish pattern. Therefore, a bullish breakout from it is the most probable scenario.
In addition, there are several other signs indicating that a bullish breakout is the most likely scenario for further price movement.
The rebound of ETH from the wedge support line at the end of June (green icon) led to a price recovery above the 0.618 Fibo retracement support level. Both of these traits are considered to be bullish. The recovery is of particular importance because it is the Fibo 0.618 often plays the role of a bottom if the price decline was only a correction.
Further, the weekly RSI formed a bullish divergence (green line). It is a phenomenon in which the momentum rises on the background of a price decrease. This often leads to significant growth, especially if it occurs on a long term timeframe such as a weekly timeframe. In case of a bullish breakout from the wedge, ETH could move towards the next resistance at ₿0,085.
Source: TradingView
Despite the bullish outlook, a decisive close of ETH/BTC below the descending wedge support line would mean that the trend remains bearish. In this case, the price is expected to fall to the next support level of ₿0.050.
Dogecoin (DOGE) could double in price
Our latest crypto prediction is related to Dogecoin. Coin Dogecoin project is one of the most recognizable “calling cards” of the crypto market and has many fans. Although it emerged in 2013 as a meme coin, many already believe that DOGE has outgrown its status as a mere meme.
The DOGE has outgrown its status as a mere meme.
Since reaching an all-time high in May 2021, the token has been declining along a downward resistance line. It was 805 days old.
Last week, DOGE finally broke through that line. The breakdown of such long-term structures usually leads to a pronounced upward movement, as it means the end of the previous correction. While the coin has yet to begin such a meteoric rise, it has still been consistently moving upward since the aforementioned breakout.
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In addition, the weekly RSI just moved above the 50 mark, which is the first time it has done so since October 2022.
The next important resistance area is at $0.16, 100% above the current price. Due to the long-term bullish breakout and the lack of resistance in the near term, there is a possibility that DOGE will reach this level.
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Source: TradingView
Despite the bullish outlook, DOGE’s inability to consolidate gains could see the price fall to the horizontal support area of 0.060, which is 22% below current levels.