Chart Check

Welcome to chart check, Kryptokhazinas new weekly segment, in chart check we provide weekly technical insights regarding cryptocurrency charts, lets start with bitcoins chart:

Technical Analysis of Bitcoin/USD Chart

Higher Time Frames (Weekly and Daily)

1. Trend Analysis:

• Weekly Chart: The long-term trend for Bitcoin remains bullish, with the price currently in an uptrend since the beginning of 2023. However, there has been a notable pullback in recent weeks.

• Daily Chart: The daily chart shows a more detailed picture of the recent downtrend that started in early June 2024, with Bitcoin struggling to maintain support levels.

1. Key Indicators:

• Moving Averages:

• 50-week Moving Average (MA): Bitcoin is trading above the 50-week MA, which acts as a long-term support level. The current 50-week MA is around $52,000.

• 200-day Moving Average (MA): The 200-day MA is a crucial support level, currently at approximately $45,000. Bitcoin's price recently tested this level and showed a bounce, indicating strong support.

• Relative Strength Index (RSI):

• Weekly RSI: Currently at 55, indicating neutral momentum but with a bullish bias. A drop below 50 could signal further downside potential.

• Daily RSI: The daily RSI is at 40, showing that Bitcoin is approaching oversold conditions. This could suggest a potential rebound in the near term.

1. Support and Resistance Levels:

• Support Levels:

• $55,000: This level has acted as a significant support and resistance zone in the past, making it a key area to watch.

• $50,000: Psychological support level and also aligns with the 50-week MA.

• $45,000: Near the 200-day MA, acting as a critical support level.

• Resistance Levels:

• $60,000: A major resistance level that has been tested multiple times but not convincingly broken in the recent uptrend.

• $65,000: Previous all-time high before the recent correction.

Lower Time Frames (4-Hour and 1-Hour)

1. Trend Analysis:

• 4-Hour Chart: Bitcoin is in a short-term downtrend with lower highs and lower lows since early July 2024. The price is below the 50-period MA on this timeframe.

• 1-Hour Chart: The 1-hour chart shows consolidation with Bitcoin ranging between $55,000 and $57,000.

1. Key Indicators:

• Moving Averages:

• 50-period MA (4-hour): Acts as immediate resistance, currently at $56,500. A break above this level could signal a reversal in the short-term trend.

• 200-period MA (1-hour): Provides dynamic support and resistance, currently at $55,700.

• MACD (Moving Average Convergence Divergence):

• 4-hour MACD: The MACD line is below the signal line, indicating bearish momentum. However, the histogram is showing signs of weakening bearish momentum.

• 1-hour MACD: The MACD line is converging towards the signal line, suggesting a possible bullish crossover if the price can break above the immediate resistance.

1. Support and Resistance Levels:

• Support Levels:

• $55,000: Acts as a significant support level in the short term.

• $53,000: Another key support level that coincides with the lower range of recent consolidation.

• Resistance Levels:

• $57,000: Immediate resistance level, a break above this could see Bitcoin testing $60,000 again.

• $58,500: Another resistance level to watch in the short term..

Bitcoin is currently experiencing a pullback within a long-term uptrend. Key support levels to watch are $55,000 and $50,000, while resistance levels are at $57,000 and $60,000. Indicators such as the RSI suggest potential oversold conditions in the short term, which could lead to a rebound. However, maintaining above the 200-day MA will be crucial for sustaining the long-term bullish outlook.

Technical Analysis of the U.S. Dollar Index (DXY)

Current State

As of July 8, 2024, the U.S. Dollar Index (DXY) is trading at around 104.99, having shown a slight increase of 0.11% from the previous session. Over the past month, the DXY has fluctuated between 104.60 and 105.87, indicating a period of consolidation​.

Higher Time Frames (Weekly and Monthly)

1. Trend Analysis:

• Weekly Chart: The DXY has been in a long-term uptrend since early 2023, despite recent consolidation. The index shows strong bullish momentum, supported by key economic indicators and geopolitical factors.

• Monthly Chart: On the monthly chart, the DXY has maintained a steady upward trajectory since mid-2021, with occasional pullbacks.

1. Key Indicators:

• Moving Averages:

• 50-week Moving Average: The index is trading above the 50-week MA, which is a bullish sign. The 50-week MA currently stands around 103.50.

• 200-day Moving Average: Similarly, the DXY is above the 200-day MA, reinforcing the long-term bullish trend. The 200-day MA is around 101.80.

• Relative Strength Index (RSI):

• Weekly RSI: The RSI is at 60, indicating neutral to slightly bullish momentum. A move above 70 would suggest overbought conditions.

• Monthly RSI: The RSI is at 65, supporting the overall bullish outlook.

1. Support and Resistance Levels:

• Support Levels:

• 104.00: This level acts as immediate support and has been tested multiple times in recent months.

• 102.50: Another significant support level, coinciding with the 50-week MA.

• Resistance Levels:

• 105.50: Immediate resistance level that the index has struggled to break above.

• 107.00: Long-term resistance level and the 52-week high. A break above this level could signal a continuation of the bullish trend.

Lower Time Frames (Daily and 4-Hour)

1. Trend Analysis:

• Daily Chart: The DXY is showing signs of consolidation within a narrow range, indicating potential for a breakout in either direction.

• 4-Hour Chart: The 4-hour chart reveals a rising wedge pattern, typically a bearish signal. However, the price action near the lower boundary suggests a possible short-term bounce.

1. Key Indicators:

• Moving Averages:

• 50-period MA (Daily): Acts as a dynamic support level, currently at 104.70. The price is hovering near this level.

• 200-period MA (4-Hour): Provides immediate resistance, currently at 105.00.

• MACD (Moving Average Convergence Divergence):

• Daily MACD: The MACD line is below the signal line, indicating bearish momentum. However, the histogram shows signs of decreasing bearish momentum.

• 4-Hour MACD: The MACD is close to a bullish crossover, suggesting potential short-term upward movement.

1. Support and Resistance Levels:

• Support Levels:

• 104.50: Immediate support level in the short term.

• 104.00: Another key support level, coinciding with the lower boundary of the rising wedge.

• Resistance Levels:

• 105.00: Immediate resistance level and the 200-period MA on the 4-hour chart.

• 105.50: Another significant resistance level to watch.

News and Reports

Recent economic data and geopolitical events have played a crucial role in influencing the DXY. The Federal Reserve's interest rate decisions, inflation data, and global economic conditions are key factors to monitor. For instance, recent reports from the Federal Open Market Committee (FOMC) minutes indicated potential rate hikes, which could support the dollar's strength in the coming months​​.

The U.S. Dollar Index is currently consolidating, with key support levels at 104.00 and resistance levels at 105.50. The overall trend remains bullish in the higher time frames, supported by strong economic indicators. However, short-term consolidation suggests potential volatility. Investors should monitor economic reports and geopolitical developments closely to gauge future movements.

Key Levels to Watch in Bitcoin Dominance for Altseason

Overview

Bitcoin dominance (BTC.D) measures Bitcoin's market cap as a percentage of the total cryptocurrency market cap. This metric is crucial for understanding market sentiment and predicting potential altcoin rallies (altseason). As of July 8, 2024, Bitcoin dominance stands at approximately 53.35%​​.

Key Levels

1. 57% - 60%: This range acts as a significant resistance level for Bitcoin dominance. If BTC.D rises above this range, it usually indicates increased confidence in Bitcoin, often at the expense of altcoins.

2. 50% - 53%: This is a critical support zone. A break below this range can signal the start of an altseason, where capital flows from Bitcoin to altcoins. Currently, Bitcoin dominance is hovering around the lower end of this range​​.

3. 45% - 48%: If Bitcoin dominance falls into this zone, it historically aligns with significant altcoin rallies. During such periods, altcoins often see substantial price increases as investors seek higher returns outside of Bitcoin​​.

4. 35% - 40%: This level is historically associated with major altseasons. In the past, Bitcoin dominance dropped to this level during the peak of altcoin market cycles, such as in 2017 and early 2018​​.

Factors Influencing Bitcoin Dominance

1. Market Trends: Bullish trends in the broader cryptocurrency market tend to decrease Bitcoin dominance as investors allocate more capital to altcoins seeking higher returns. Conversely, bearish markets often see an increase in Bitcoin dominance as it is perceived as a safer asset.

2. New Cryptocurrencies and ICOs: The launch of new cryptocurrencies and Initial Coin Offerings (ICOs) can significantly impact Bitcoin dominance. The emergence of successful projects like Ethereum and Solana has historically decreased Bitcoin dominance as these projects capture a significant market share​​.

3. Market Sentiment: During times of market uncertainty or increased risk, investors often prefer Bitcoin due to its established reputation, which increases Bitcoin dominance. Conversely, during periods of high market confidence, investors are more likely to invest in altcoins, reducing Bitcoin dominance​​.

Conclusion

Monitoring Bitcoin dominance is essential for anticipating market shifts and potential altseasons. Currently, critical levels to watch are 53% for potential support and 57% for resistance. A decline below 50% could signal a strong altcoin market rally.