Bitcoin (BTC) bounced back above the psychological level at $50,000 and the S&P 500 hit a new all-time closing high on Dec. 23, suggesting that
Bitcoin (BTC) bounced back above the psychological level at $50,000 and the S&P 500 hit a new all-time closing high on Dec. 23, suggesting that the panic selling caused due to the omicron variant is subsiding and the much-awaited “Santa rally” may have started.
Data from on-chain analytics firm Glassnode shows that about 100,000 Bitcoin is going from “liquid” to “illiquid” state every month, which means that the coins are being sent to addresses “with little history of spending.” This suggests accumulation by investors.
In another sign that investors are not dumping their coins on small corrections, data from CryptoRank shows that the total Bitcoin on crypto exchanges has dropped from 9.5% of the total Bitcoin supply in October 2020 to 6.3% of the supply in December of this year, which is the lowest level in 2021.
Is the current recovery the start of a new uptrend or is this just a dead cat bounce that will be sold into? 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 ($49,720) on Dec. 23, indicating that the sellers may be losing their grip. The flattening 20-day EMA and the relative strength index (RSI) near the midpoint suggest a possible change in the short-term trend.
The recovery could rise to the 38.2% Fibonacci retracement level at $52,314 and then to the 50% retracement level at $55,560. The bears are likely to mount a strong resistance in this zone. If the price turns down from this zone, the bears will again try to resume the downtrend.
A break and close below the strong support zone at $45,000 to $42,000 could open the doors for a possible decline to $30,000. On the other hand, if buyers drive the price above $55,560, the BTC/USDT pair could rise to the 61.8% Fibonacci retracement level at $58,686. A break and close above this level will improve the prospects of a retest of the all-time high.
ETH/USDT
Ether (ETH) broke and closed above the descending channel and the 20-day EMA ($4,060) on Dec. 23, which is the first indication that the correction may be ending.
If buyers sustain the price above the 20-day EMA, the bullish momentum could pick up and the ETH/USDT pair could rise to $4,488. This level may again act as a strong resistance but if bulls push the price above it, the pair could retest the all-time high at $4,868.
The 20-day EMA is flattening out and the RSI is near the midpoint, suggesting that bulls are attempting a comeback.
However, if the price turns down and breaks 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 break and close below this support could result in a decline to the 200-day simple moving average ($3,316).
BNB/USDT
Binance Coin (BNB) has recovered to the downtrend line, which could act as a strong resistance. If the price turns down from the current level, it will suggest that traders continue to sell on rallies.
The bears will now attempt to pull the price down to the strong support zone at $500 to $489.20. If this zone crumbles, 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 bulls drive and sustain the price above the downtrend line, it will suggest that the correction could be over. The buyers will then attempt to resume the up-move, which may face resistance at $575 and later at $617.
SOL/USDT
After trading close to the 20-day EMA ($184) for the past few days, Solana (SOL) broke and closed above the resistance on Dec. 23. The 20-day EMA has flattened out and the RSI is close to the midpoint, suggesting a balance between supply and demand.
This balance will tilt in favor of the bulls if the price sustains above the 20-day EMA. Such a move will indicate that the short-term corrective phase may be ending. The SOL/USDT pair could first rise to $204.10 and then to $240.
Conversely, if the price turns down and sinks 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 slump to the 200-day SMA ($123).
ADA/USDT
Cardano (ADA) jumped above the 20-day EMA ($1.37) on Dec. 23, indicating that buyers are attempting a comeback. However, the bears are unlikely to give up easily and will attempt to pull the price back below the 20-day EMA.
If they succeed, it will suggest that the sentiment remains negative and traders are selling on rallies. The ADA/USDT pair could then drop to the strong support at $1.18. A break and close below this level could sink the pair to $1.
Alternatively, if the price rebounds off the 20-day EMA, it will suggest that the sentiment has turned…
cointelegraph.com