Bitcoin (BTC) and Ether (ETH) surged above their respective overhead resistance levels on Dec. 4, indicating that the bulls are in no mood to slow dow
Bitcoin (BTC) and Ether (ETH) surged above their respective overhead resistance levels on Dec. 4, indicating that the bulls are in no mood to slow down. The higher the price goes without a meaningful correction, the greater the feeling of missing out among traders. When traders chase prices higher, it could lead to a blow-off top before a correction sets in.
Cryptocurrency exchange Bybit said in its 4th quarter report that institutional traders held 35% of their assets in Bitcoin, 15% in Ether and a large portion kept 45% of their assets are in stablecoins. Only a miniscule 5% was held in rest of the altcoins.
This shows that there is still enough firepower available with institutional investors to buy the cryptocurrency of their choice by selling stablecoins.
Matrixport research head Markus Thielen said in a recent note that the three previous crypto bear markets were followed by a three-year bull cycle, and this time is going to be no different, with 2023 being the first year. Thielen anticipates Bitcoin to reach $60,000 by April and $125,000 by the end of 2024.
Could bulls hold on to the gains in Bitcoin and select altcoins, or will higher levels attract aggressive selling by the bears? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The bulls kicked the S&P 500 Index (SPX) above the overhead resistance of 4,541 on Nov. 20 and thwarted attempts by the bears to pull the price back below the breakout level.
The up-move is likely to face selling in the zone between 4,607 and 4,650. If the price turns down from the overhead zone but does not dip below 4,541, it will signal that bulls have flipped the level into support. That will improve the prospects of a rally above 4,650. The index may then soar to 4,800.
Meanwhile, the bears are likely to have other plans. They will try to pull the price below the breakout level of 4,541 and then the 20-day exponential moving average (4,494). That will clear the path for a collapse to the 50-day simple moving average (4,364).
U.S. Dollar Index price analysis
The U.S. Dollar Index (DXY) is trying to start a recovery from the 61.8% Fibonacci retracement level of 102.55, but the bulls are likely to face stiff resistance at the 20-day EMA (104.02).
If the price turns down sharply from the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on rallies. That will enhance the prospects of a break below 102.55. If that happens, the selling could accelerate, and the index may plummet to the strong support at 101.
The first sign of strength will be a break and close above the 20-day EMA. That will indicate the start of a stronger relief rally to 104.55 and later to the 50-day SMA (105.41).
Bitcoin price analysis
Bitcoin is in a strong uptrend. The bears could not pose any challenge at $40,000, which shows that bulls are having their way.
The sharp rally of the past few days has pushed the RSI into the overbought zone, indicating that a minor correction or consolidation is possible. Sometimes, when the trend is strong, the RSI tends to remain in the overbought territory for an extended period of time. The next target objective on the upside is $48,000 as there is no major resistance level in between.
With every rise, it is getting difficult for the bears to stop the rally. If sellers want to make a comeback, they will have to halt the rally at the current level and drag the BTC/USDT pair below the 20-day EMA ($37,926). That may indicate the start of a deeper correction.
Ether price analysis
Ether (ETH) continued its northward march and pole vaulted above the $2,200 resistance on Dec. 2. If the price closes above this resistance, it will complete a bullish ascending triangle pattern.
The upsloping 20-day EMA ($2,063) and the RSI near the overbought zone suggest that bulls are in control. The pattern target of the breakout from the triangle is $3,400. However, the bears may not give up easily and will try to restrict the rally at $2,500 and again at $3,000.
The first sign of weakness will be a break and close below the breakout level of $2,200. That will indicate that the breakout may have been a fake move. The bears will strengthen their position further if they tug the ETH/USDT pair below the 20-day EMA.
BNB price analysis
BNB (BNB) has been consolidating in a tight range between $239 and $223 for the past few days, indicating indecision among the buyers and sellers.
The downsloping 20-day EMA ($233) and the RSI just below the midpoint indicate that bears have a slight edge. If buyers overcome the obstacle at $239, the BNB/USDT pair could pick up momentum and rally to $265.
Contrary to this assumption, if the price turns down from $239, the range-bound action may continue for some more time. The…
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