Bitcoin (BTC) rebounded above the psychological level at $ 50,000 and the S&P 500 hit a new all-time closing high on December 23, suggesting that the panic sell caused by the omicron variant is fading and the much anticipated “Santa’s rally” may have started.
Data from chain analytics company Glassnode shows that around 100,000 Bitcoins go from “liquid” to “illiquid” every month, which means coins are sent to addresses “with little history. of expenses “. This suggests an accumulation by investors.
Another sign that investors are not throwing their coins on small corrections, data from CryptoRank shows that the total of Bitcoin on crypto exchanges fell from 9.5% of the total supply of Bitcoin in October 2020 to 6.3. % of supply in December of this year, which is the lowest level in 2021.
Is the current rally the start of a new uptrend or is it just a dead cat bounce that will be sold? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC / USDT
Bitcoin broke and closed above the 20-day Exponential Moving Average (EMA) ($ 49,720) on December 23, indicating that sellers could lose their grip. The flattening of the 20-day EMA and the Relative Strength Index (RSI) near the midpoint suggest a possible change in the short-term trend.
The rally could reach the 38.2% Fibonacci retracement level at $ 52,314, then the 50% retracement level at $ 55,560. Bears are likely to mount a strong resistance in this area. If the price drops from this area, the bears will try to resume the downtrend again.
A breakout and close below the strong support area at $ 45,000 to $ 42,000 could open the door for a possible decline to $ 30,000. On the flip side, if the buyers push the price above $ 55,560, the BTC / USDT pair could hit the 61.8% Fibonacci retracement level at $ 58,686. A breakout and close above this level will improve the prospects for a retest of the all-time high.
ETH / USDT
Ether (ETH) broke and closed above the descending channel and 20-day EMA ($ 4,060) on December 23, which is the first indication that the correction may end .
If the buyers hold the price above the 20-day EMA, the bullish momentum could accelerate and the ETH / USDT pair could hit $ 4,488. This level may again act as strong resistance, but if the bulls push the price above, the pair may retest the all-time high at $ 4,868.
The 20-day EMA flattens out and the RSI is near the midpoint, suggesting the bulls are attempting a comeback.
However, if the price drops and comes back into the channel, it will suggest that the current breakout was a bull trap. The pair could then drop to $ 3,643.73. A breakout and close below this support could cause the 200-day Simple Moving Average (SMA) ($ 3,316) to drop.
BNB / USDT
Binance Coin (BNB) has moved back to the bearish trendline, which could be strong resistance. If the price drops from the current level, it will suggest that traders continue to sell on rallies.
The bears will now attempt to pull the price towards the strong support area of $ 500 at $ 489.20. If that zone collapses, the decline could extend to the 200-day SMA ($ 439) where buyers are likely to step in and provide support.
Contrary to this assumption, if the bulls lead and hold the price above the downtrend line, it will suggest that the correction may be over. Buyers will then attempt to resume the bullish movement, which may encounter resistance at $ 575 and later at $ 617.
SOL / USDT
After trading near the 20 day EMA ($ 184) in the last few days, Solana (SOL) broke and closed above resistance on December 23. The 20-day EMA has flattened and the RSI is near the midpoint, suggesting a balance between supply and demand.
This balance will tip in favor of the bulls if the price holds above the 20 day EMA. Such a decision will indicate that the short-term correction phase may come to an end. SOL / USDT could first climb to $ 204.10 and then to $ 240.
Conversely, if the price drops and falls below $ 168.49, it will suggest that bears continue to sell on rallies. The pair could then drop to $ 148.04. If this level also cracks, the pair could break down to the 200 day SMA ($ 123).
ADA / USDT
Cardano (ADA) broke the 20-day EMA ($ 1.37) on December 23, indicating that buyers are attempting a comeback. However, the bears are unlikely to give up easily and will attempt to push the price below the 20-day EMA.
If they are successful, it will suggest that sentiment remains negative and traders are selling on rallies. ADA / USDT could then drop to the strong support at $ 1.18. A breakout and close below this level could push the pair down to $ 1.
Alternatively, if the price bounces off the 20-day EMA, it will suggest that sentiment has turned bullish and traders are buying if there is a bottom. The bulls will then attempt to push the price up to overhead resistance at $ 1.87.
XRP / USDT
Ripple (XRP) broke and closed above the 200-day SMA ($ 0.94) on December 22, indicating sellers could lose their grip. The bears are currently trying to block the rally near the psychological $ 1 mark.
If the bulls do not allow the price to fall back below the moving average, this will indicate that traders are buying the dips. This will increase the possibility of a breakout above $ 1. If that happens, XRP / USDT could hit $ 1.20 and later hit the strong air resistance at $ 1.41.
Contrary to this assumption, if the price goes back below the moving averages, it will suggest that traders are selling near the high level of overhead resistance. This could keep the pair stuck in a wide range between $ 0.75 and $ 1.
LUNA / USDT
Terra’s LUNA token fell $ 98.20 on December 22, indicating that bears are defending psychological resistance at $ 100. However, the bulls had other plans as they bought the downside and resumed the upside on December 23.
The 20-day up EMA ($ 74) and RSI in the overbought zone indicate an advantage for buyers. If the bulls keep the price above $ 100, the LUNA / USDT pair could initiate the next stage of the uptrend. The next target on the upside is $ 124.65, then $ 150.
Alternatively, if the price drops from the current level, it will suggest that the bears continue to pose a tough challenge at $ 100. The selloff could intensify if the price drops below the 20-day EMA. The pair could then drop to $ 50.
Related: Bitcoin ‘Santa rally’ stops at $ 51.5,000 as funds bet on BTC price below $ 60,000 for January 2022
AVAX / USDT
Avalanche (AVAX) faced resistance in the area between the 61.8% Fibonacci retracement level at $ 119.69 and the 78.6% retracement level at $ 131.70, but a positive element minor is that the bulls haven’t given up much ground.
The rising 20-day EMA ($ 107) and the RSI in positive territory suggest the path of least resistance is on the upside. If the bulls push the price above $ 131.70, AVAX / USDT could retest all-time high at $ 147.
On the contrary, if the price drops from the current level or air resistance and goes below the 20 day EMA, it will suggest that demand is drying up at higher levels. The pair could then drop to $ 98.14. If that level cracks, the next stop could be $ 75.50.
DOT / USDT
Polkadot (DOT) rebounded from the strong support area at $ 25 to $ 22.66 on December 20 and the bulls pushed the price above the moving averages on December 23.
If the buyers hold the price above the moving averages, the DOT / USDT could hit $ 31.49, where the bears could mount strong resistance.
If the price drops from this level but bounces off the moving averages, it will suggest a change in sentiment from selling on rallies to buying on lows. This could open the doors to a possible rally to $ 39.35.
This positive opinion will be invalidated if the price drops from the current level and goes below the 20 day EMA ($ 28.42). This could pull the pair towards the support area.
DOGE / USDT
Dogecoin’s (DOGE) rebound to strong support at $ 0.15 broke the 20-day EMA ($ 0.18). This suggests that the bears could lose their grip.
Buyers will now try to propel the price above overhead resistance at $ 0.19. If they are successful, the DOGE / USDT pair could move up to $ 0.22 and then to the 200-day SMA ($ 0.23). Bears are likely to defend this area vigorously.
On the other hand, if the price drops by $ 0.19, the pair could drop to $ 0.15 again and stay in a range between these two levels for a few more days. Bears will need to sink and hold the price below $ 0.15 to initiate the next stage of the downtrend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN. Every investment and trade move involves risk. You should do your own research before making a decision.
Market data is provided by HitBTC exchange.