What will happen in the cryptocurrency market in August 2023 – top predictions

July has been a bearish month for the cryptocurrency market, with most of the coins falling after hitting new yearly highs at the start of the month.

The Bitcoin Dominance Index (BTCD) has risen significantly since hitting a low of 39% in September 2022. The rally gained momentum in February and shortly thereafter the price broke through the 48% resistance level.

The breakout of this resistance area was extremely important as it had been on the chart for a long time. Breaking through such long-term levels often results in significant upside moves. As expected, BTCD peaked at 52.20% in June.

Currently, the next distinct horizontal resistance is not observed. However, as the results of the technical analysis of the weekly chart show, a number of signs point to the possible formation of a local top.

Firstly, 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 resulted in sharp declines (red circle).

Secondly, BTCD encountered the 0.382 Fibonacci resistance level of the 52% retracement (red icon). Fibonacci levels are traditionally considered the most likely springboards for stopping and reversing the price after a significant advance in any one direction. As expected, at these levels, the market can win back part of the distance traveled and only after that resume movement in the original direction. In addition, they can determine the limit levels of the price movement.

As a result, there is a possibility that BTCD will continue to decline towards the 48% level, which may subsequently act as support. The development of such a scenario will indicate that altcoins can outperform Bitcoin.

However, this forecast will be invalidated if BTCD closes the weekly trade above 52%. In this case, a sharp rise to the next important Fibonacci resistance at 60.33% is more likely.

The second crypto forecast is related to the ETH/BTC pair. It has been declining since September 2022. Although this move indicates that the trend is bearish, it has been contained inside a falling wedge, which is considered a bullish pattern. Therefore, a bullish break out of it is the most likely scenario.

In addition, there are several more signs that indicate that a bullish breakout is the most likely scenario for further price movement.

The bounce of ETH from the wedge support line at the end of June (green icon) led to the price recovering above the Fibo support level of 0.618 retracement. Both of these signs are considered bullish. Recovery is of particular importance, since it is the 0.618 Fibo that often plays the role of a bottom if the price decline was only a correction.

Next, the weekly RSI formed a bullish divergence (green line). This is a phenomenon in which momentum rises against the backdrop of a price decline. This often results in a significant rally, especially if it occurs on a long-term timeframe such as the weekly. In the event of a bullish break out of the wedge, ETH could move towards the next resistance at ₿0.085.

Despite the bullish outlook, a decisive ETH/BTC close 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.

Our last crypto forecast is related to Dogecoin. The coin of the Dogecoin project is one of the most recognizable “calling cards” of the crypto market and has many fans. Although it appeared in 2013 as a meme coin, many already believe that DOGE has outgrown the status of a mere meme.

Since hitting an all-time high in May 2021, the token has been declining along a descending resistance line. Her age was 805 days.

Last week, DOGE finally broke 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. Although the coin has not started such a meteoric rise yet, it has been consistently moving up since the aforementioned breakout.

In addition, the weekly RSI just rose above 50 for the first time since October 2022.

The next major resistance area is at $0.16, 100% above the current price. With a long-term bullish breakout and lack of resistance in the near term, there is a possibility that DOGE will reach this level.

Despite the bullish outlook, DOGE's failure to sustain gains could see the price fall to the 0.060 horizontal support area, 22% below current levels.