- Bitcoin price rally fizzled out slightly above $42,000 amid concerns of crypto tax in the US.
- Dogecoin price risks another dive to $0.16 following the ongoing consolidation.
Cryptocurrencies are grappling with increased overhead pressure, making it difficult for bulls to sustain the winning streak recorded in the past couple of weeks. Initially, Bitcoin pulled the entire market upward as it made haste from levels below $30,000 to highs above $40,000. However, the flagship cryptocurrency’s correction from $42,000 seems to have triggered losses across the board.
The bellwether cryptocurrency is teetering at $38,750 after correcting from weekend highs of $42,500. As selling orders surged, chances of holding above $40,000 narrowed. Besides, the 200 Simple Moving Average (SMA) currently contributes to the overhead pressure.
Meanwhile, the primary goal is to secure higher support, preferably above $38,000. Here, bulls will plan the next attack mission back above $40,000.
However, traders must be aware of the sell signal from the Moving Average (MACD) indicator on the four-hour chart. It implies that the bullish outlook is fading, and sellers are taking control. If the MACD closes the gap to the mean line, Bitcoin might not stop at $38,000 but could stretch the bearish leg to $35,000.
BTC/USD 12-hour chart
Dogecoin had envisioned closing the July close to $0.3, but their desires have been overpowered by consolidation. The meme coin continues to trade slightly above $0.2 while the 100 SMA caps its immediate upside on the 12-hour chart.
The Bollinger bands emphasize the sideways trading, suggesting that Dogecoin is in a no-trade zone. Note that as the bands constrict, DOGE nears a breakout. However, the Bollinger bands do not indicate the direction of the breakout. Traders can watch out for close above the upper band to validate an upswing and below the lower band to ascertain a price drop.
DOGE/USD four-hour chart
At the time of writing, Dogecoin was trading below the middle boundary, hence the possibility of the downtrend resuming. Moreover, the RSI has just slipped under the mean line, emphasizing the aggressive bearish outlook. Realize that closing the day under $0.2 could trigger more losses to $0.16.