Bitcoin (BTC) Price Analysis: Will the Bitcoin Bulls Prevent a Drop to $50,000?

The S&P 500 Index (SPX) rose about 2% last week to hit a new lifetime high, while Bitcoin (BTC) collapsed 11% during the same period to hit its lowest weekly

The S&P 500 Index (SPX) rose about 2% last week to hit a new lifetime high, while Bitcoin (BTC) price collapsed 11% during the same period to hit its lowest weekly close in four months. This showed that Bitcoin has been underperforming the equity markets in the near term. However, some solace for the Bitcoin bulls came from maintaining the BTC price above the critical support of $56,552.

Bitcoin’s weakness resulted in a pullback in several altcoins, which several investors viewed as a buying opportunity. According to a CoinShares report on July 8, digital investment products witnessed inflows of $441 million last week.

The major question in every investor’s mind was whether the correction was over or whether Bitcoin would fall further. While it was difficult to state with certainty, some analysts believed a bottom may be near. Analysts from the Bitfinex exchange said in their July 8 report that Bitcoin may have formed a local bottom.

Will the Bitcoin bulls prevent a drop to $50,000? Will altcoins start a recovery? Let’s analyze the charts to better understand the current technicals in play.

S&P 500 Index price analysis

The S&P 500 Index is in a strong uptrend. It has consistently been making a new all-time high, indicating that the bulls are firmly in the driver’s seat.

A minor negative in the near term is that the relative strength index (RSI) has risen into the overbought territory, suggesting a minor correction or consolidation could be around the corner. The 20-day exponential moving average (5,461) will likely be a strong support. If the price rebounds off the 20-day EMA, the index may reach 5,750 and then 6,000.

Bears must quickly yank the price below the 20-day EMA if they want to prevent the upside. If they do that, it may tempt the short-term bulls to book profits. The increased selling pressure may sink the index to the 50-day simple moving average (5,320).

U.S. Dollar Index price analysis

The bulls tried to maintain the U.S. Dollar Index (DXY) above the 105.74 resistance, but the bears had other plans.

Strong selling pulled the price below the 20-day EMA (105) on July 3. That encouraged the bears to maintain their pressure, and the index slipped below the 50-day SMA (105) on July 5. This suggests that the bulls are losing their grip.

The bears will try to strengthen their position further by pulling the price to the crucial support at 104. Buyers are expected to guard this level with vigor. If the price bounces off 104, the index may consolidate between 104 and 106 for a while.

Bitcoin price analysis

Bitcoin closed below the $56,552 support on July 7, but the bears could not maintain the momentum and sink the price below $53,485.

The tail on the July 8 candlestick shows that the bulls are aggressively defending the zone between $56,552 and $53,485. The BTC/USDT pair could rise to the 20-day EMA ($60,625), an important resistance to watch out for.

If the price breaks down sharply from the 20-day EMA, it will indicate that the sentiment remains negative and traders are selling on rallies. That will put the $53,485 support at risk of breaking down. The next support on the downside is at $50,000.

On the other hand, if buyers kick the price above the 20-day EMA, it will suggest that the pair may swing inside the $53,485 to $73,777 range for a few more days.

Ether price analysis

Ether (ETH) has fallen to the solid support of $2,850 for the second time within the past four days, indicating intense selling pressure from the bears.

If the $2,850 support cracks, the selling may increase, and the ETH/USDT pair could start a down-move to $2,200. The bulls are expected to vigorously defend this level.

Alternatively, if the price bounces off the current level and rises above $3,110, it will signal the start of a relief rally to the 20-day EMA ($3,272). This is an important level for the bears to defend because a break above it will signal that the pair may continue to trade inside the large range between $2,85

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