The S&P 500 Index (SPX) rose 2.49% last week, extending its weekly winning streak to seven weeks, the longest such winning streak since 2017. However, Bitcoin (BTC) failed to maintain its momentum and succumbed to profit booking by the bulls. Trading Resource Material Indicators said in an X post (formerly Twitter) that “year-end profit taking and tax loss harvesting” will prevail in the near term.
However, a crash is unlikely as several analysts expect the US Securities and Exchange Commission to approve one or more spot applications for Bitcoin exchange-traded funds in January. If this happens, it could prove to be a game changer for the industry.
Daily cryptocurrency market performance. Source: Coin360
Jan van Eck, CEO of VanEck, said in an interview with CNBC that Bitcoin is likely to reach a new all-time high in the next 12 months. He expects Bitcoin to become a complement to gold.
What key levels could halt Bitcoin and altcoins’ decline? To find out, let's analyze the charts.
Price analysis of the S&P 500 index
The S&P 500 Index witnessed a strong bullish move in recent days, pushing the price above the overhead resistance at 4,650 on December 13th.
SPX daily chart. Source: TradingView
The strong rally has pushed the relative strength index (RSI) deep into overbought territory, suggesting that markets are overheated in the near term. This could lead to a correction or consolidation in the next few days. Strong support on the downside lies at the breakout level of 4,650 and then the 20-day exponential moving average (4,601).
If the price continues higher and breaks above 4,740, the index could extend the uptrend to 4,819. This level is likely to see another tough battle between bulls and bears, but if buyers prevail, the rally could reach the psychological level of 5,000.
US Dollar Index price analysis
Bulls repeatedly failed to keep the US Dollar Index (DXY) above the 20-day EMA (103) between December 5 and December 13.
DXY daily chart. Source: TradingView
This encouraged bears to resume selling, which pushed the index lower. The bears pulled the price below the 61.8% Fibonacci retracement level at 102.55 on December 14, signaling the resumption of the corrective phase. The next strong support is at 101.
The RSI is showing early signs of positive divergence, suggesting that selling pressure may be easing. If the price bounces off 101 and rises above the 20-day EMA, the index could continue to fluctuate in a wide range between 101 and 108.
Bitcoin price analysis
Bitcoin's tight range between the 20-day EMA ($41,323) and the descending trend line dissolved to the downside on December 18, but the breakdown lacks momentum.
BTC/USDT daily chart. Source: TradingView
The flattening 20-day EMA and the RSI near the middle suggest a short-term move within a range. If the price falls below $40,000, the BTC/USDT pair could fall to the key support at $37,980. At this level, aggressive buying by the bulls is likely to occur.
On the other hand, if the price rises and rises back above the 20-day EMA, it indicates strong demand at lower levels. The bulls will then attempt to overcome the barrier at the downtrend line. If they do, the pair could rise to $44,700.
Ether price analysis
Ether (ETH) slipped below strong support at $2,200 on December 18, suggesting that bulls may be losing their footing.
ETH/USDT daily chart. Source: TradingView
If the price stays below $2,200, the ETH/USDT pair could fall to the 50-day SMA ($2,074). This level could attract buyers again, but the bears will try to stop the rally at $2,200. In this case, the probability of a break below the 50-day SMA increases. The pair could then crash to $1,900.
This negative view will be invalidated in the short term if the price rises above $2,200. This suggests strong buying at lower levels. The pair will then attempt to climb towards the upper resistance at $2,332.
BNB price analysis
The bulls' failure to push BNB (BNB) above $260 may have enticed short-term traders to book profits.
BNB/USDT daily chart. Source: TradingView
This triggered a decline that broke below the moving averages on December 18th. The 20-day EMA ($240) started to fall lower and the RSI has slipped below the middle, suggesting that the bears are trying to gain the upper hand. This increases the chances of a decline to $223.
If the price bounces sharply from the $223 support and rises above the moving averages, it will indicate strong buying at lower levels. The BNB/USDT pair could then continue to fluctuate between $223 and $260 for a few more days.
XRP price analysis
Bulls' failure to push XRP (XRP) back above the moving averages in recent days triggered another round of selling.
XRP/USDT daily chart. Source: TradingView
The bears will attempt to push the price towards the strong support at $0.56. If the price recovers from this level and rises above the 20-day EMA ($0.62), it will suggest that the XRP/USDT pair will remain stable between $0.73 and $0.73 for a while $.56 could get stuck.
The first sign of weakness will be a break and close below strong support at $0.56. This could pave the way for a decline to the crucial support at $0.46. The next phase of the uptrend is likely to begin after buyers push the price above $0.74.
Solana price analysis
Solana (SOL) turned lower from $79.50 on December 15th and reached the 20-day EMA ($67.77) on December 18th.
SOL/USDT daily chart. Source: TradingView
The bulls have not allowed the SOL/USDT pair to close below the 20-day EMA since the rally began on October 16. Therefore, a break of this level is likely to trigger stops from several traders. This could trigger a decline to the 50-day SMA ($57.83) and subsequently to the psychological support at $50.
If bulls want to avoid the deeper decline, they will need to aggressively defend the 20-day EMA and push the price above $80. That will set the stage for an eventual rise to $100.
Related: Spot Bitcoin ETF will be a “bloodbath” for crypto exchanges, analysts say
Cardano price analysis
Cardano (ADA) rose above the overhead resistance at $0.65 on December 13, but bulls failed to sustain the momentum. The price turned lower on December 14th and fell back below $0.65.
ADA/USDT daily chart. Source: TradingView
The sharp decline from $0.68 suggests that bulls are booking gains quickly. This suggests that the ADA/USDT pair could consolidate its recent gains in the next few days. If the price bounces off the 20-day EMA ($0.53), the pair could rise towards $0.68 and remain stuck between these two levels for some time.
A break below the 20-day EMA could accelerate selling and open the door for further decline to strong support at $0.46.
Avalanche price analysis
Buyers pushed Avalanche (AVAX) above the overhead resistance at $42.50 on December 16 and 17 but failed to sustain the higher levels.
AVAX/USDT daily chart. Source: TradingView
The AVAX/USDT pair has started a pullback finding strong support at the 20-day EMA ($33). If the price rebounds strongly from this level, it will indicate that sentiment remains positive and bulls are buying on downturns. On the other hand, a break and close above $45 signals the resumption of the uptrend. The next target is $50.
On the contrary, if the price falls below the 20-day EMA, it would be a signal that the bulls are rushing to exit. This could lead to a deeper correction to $25.
Dogecoin price analysis
Dogecoin (DOGE) rebounded from the 20-day EMA ($0.09) on December 16, but bulls failed to sustain the higher levels.
DOGE/USDT daily chart. Source: TradingView
The price turned lower on December 17th and fell below the 20-day EMA on December 18th. The 20-day EMA is flattening and the RSI is near the middle, suggesting a balance between supply and demand.
If the price stays below the 20-day EMA, the advantage will be in favor of the bears. The DOGE/USDT pair could fall to the 50-day SMA ($0.08).
If the bulls want to salvage the situation, they will need to quickly push the price back above the 20-day EMA. The bullish momentum could increase once buyers clear the hurdle at $0.11.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.