Bitcoin Drops into Demand — Will SOL, XRP, and KAS Follow Suit?

Bitcoin has recently experienced a sharp decline, dropping below the critical $60,000 support level on August 4. The digital currency's downward trend has been exacerbated by a broader market sell-off, influenced by a 6% drop in the Nikkei and a weaker-than-expected July jobs report. Additionally, the Nasdaq Composite has entered correction territory, falling more than 10% from its peak. Despite these challenges, Bitcoin's current price movement may present a buying opportunity and potentially benefit select altcoins such as Solana, XRP, Kaspa, and Aave. 

Bitcoin’s Current Market Conditions 

Bitcoin is undergoing intense selling pressure following its breach below the moving averages on August 2. The currency's price fell through the $60,000 support level on August 4, creating concern among investors. The 20-day exponential moving average (EMA) has begun to decline, and the relative strength index (RSI) is approaching oversold levels, indicating that bearish forces are dominating. 

Recovery attempts for Bitcoin are likely to encounter significant resistance at the 20-day EMA. Should the price drop sharply from this level, there is an increased risk of falling below the critical support of $55,724. Conversely, if Bitcoin manages to break and close above the 20-day EMA, it may suggest that the cryptocurrency will continue to fluctuate within its current range. 

The 4-hour chart reveals that bulls have struggled to halt the decline at the $60,000 level, suggesting that minor increases are being met with selling pressure. The next key support levels are at $55,724 and $53,485. If buyers can defend this zone effectively, it could signal a potential rebound for Bitcoin. 

Solana’s Support and Resistance Levels 

Solana has been trading within a broad range between $116 and $210 for several months. Despite the recent bearish trend, the SOL/USDT pair is expected to find support in the $127 to $116 zone. A rebound from this level or the support zone could face resistance at the 20-day EMA, currently at $162. A sharp decline from the 20-day EMA could result in a retest of the support zone. 

On the 4-hour chart, Solana’s price has entered oversold territory following a sharp drop. The pair is anticipated to find support between $135 and $121. If this support holds, the price may rise to the 20-day EMA. A breakout above this EMA could push the price towards $165, while a failure to do so could lead to a retest of the critical support at $121. 

XRP’s Path to Recovery 

XRP has faced significant selling pressure after failing to sustain levels above $0.64. The price has dropped to the 50-day simple moving average (SMA) at $0.52. If the price rebounds from this level, the bulls will attempt to drive the XRP pair above the 20-day EMA at $0.57. A successful breakout could signal a rally towards $0.64. 

Should the price continue to decline below the 50-day SMA, it may drop to the $0.46 to $0.41 support zone, where buying interest could emerge. The downsloping moving averages and RSI nearing oversold levels suggest that bearish sentiment remains strong. A swift move above the 20-day EMA would indicate potential for recovery, while failure to do so could lead to further declines. 

Kaspa’s Support Levels and Potential Recovery 

Kaspa (KAS) experienced a sharp decline from $0.21 on August 1 but is currently testing support at the 50-day SMA of $0.17. Buyers need to drive the price above the 20-day EMA at $0.18 to signal the beginning of a recovery. If successful, the Kaspa pair may attempt to overcome resistance at $0.19 and potentially rally towards $0.24. 

However, if the price falls below the 50-day SMA, it could indicate that bullish momentum is waning. The 4-hour chart shows that the pair attempted to bounce off $0.17 but faced resistance near $0.18. A breach below $0.17 could lead to a drop to the uptrend line, which might provide additional support. Failure to hold this line could result in a deeper correction towards $0.14. 

Aave’s Recent Performance and Key Levels 

Aave (AAVE) saw a push above $115 on August 1 but struggled to maintain higher levels. A relief rally from the 20-day EMA of $101 on August 4 was met with selling pressure, as indicated by the long wick on the candlestick. If the price falls below the 20-day EMA, the next support level may be the 50-day SMA at $93. 

This negative outlook could be reversed if the price rebounds from current levels and breaks above $115. Such a move would suggest positive sentiment and a potential climb to $130. The 4-hour chart shows that despite initial gains, the price failed to hold above the moving averages. Strong support is present in the $96 to $102 zone. A rebound from this area and sustained trading above the 20-day EMA could signal the end of the correction. Conversely, a drop below this support zone could lead to a decline towards $85. 

Bitcoin’s current price decline and the potential support levels around $56,000 could serve as a turning point, benefiting select altcoins such as Solana, XRP, Kaspa, and Aave. Monitoring key support and resistance levels for these cryptocurrencies will be crucial in determining their potential for recovery and future market direction.