Bitcoin (BTC) and Ethereum (ETH) surged past their respective overhead resistance levels on December 4, indicating that the bulls are in no mood to slow down. The higher the price goes without any meaningful correction, the greater the feeling among traders that they are missing out. When traders pursue price increases, this can lead to explosive highs before a correction begins.
Cryptocurrency exchange Bybit said in its fourth quarter report that institutional traders hold 35% of their assets in Bitcoin, 15% in Ethereum, and most of them hold 45% of their assets in stablecoins. Only a very small 5% is held in the remaining altcoins.
This shows that institutional investors still have enough firepower to buy their favorite cryptocurrencies by selling stablecoins.
Matrixport head of research Markus Thielen said in a recent note that the previous three cryptocurrency bear markets were followed by a three-year bull cycle, and this one will be no different, with 2023 being the first year. Thielen expects Bitcoin to reach $60,000 by April and $125,000 by the end of 2024.
Can bulls sustain Bitcoin’s uptrend and pick altcoins? Or could it encourage aggressive selling of the bears to higher levels? Let’s analyze the chart to find out.
S&P 500 Index Price Analysis
The bulls pushed the S&P 500 Index (SPX) above the indirect resistance level of 4,541 on November 20 and thwarted the bears’ attempts to push the price below the breakout level.
An upward move is likely to result in selling in the area between 4,607 and 4,650. If the price breaks from the overhead area but does not fall below 4,541, it is a sign that the bulls have turned into support. This will improve the prospects for a rally above 4,650. The index could then soar to 4,800.
Meanwhile, the bears likely have other plans. They will try to pull the price below the breakout level of 4,541 and then below the 20-day exponential moving average (4,494). This opens the way for a collapse to the 50-day simple moving average (4,364).
US Dollar Index Price Analysis
The US Dollar Index (DXY) is attempting to start a recovery near the 61.8% Fibonacci retracement level of 102.55, but the bulls are likely to face strong resistance at the 20-day EMA (104.02).
If the price drops sharply from the 20-day EMA, it means sentiment is still negative and traders are selling on the bounce. This would increase the chances of a break below 102.55. If that happens, the selling could accelerate and the index could plummet to 101, a strong support level.
The first sign of strength would be a breakout and close above the 20-day EMA. This signals the start of a stronger relief rally to 104.55 and then to the 50-day SMA (105.41).
Bitcoin Price Analysis
Bitcoin is showing a strong upward trend. The bears were unable to mount any challenge at $40,000, which shows that the bulls are having their way.
The sharp rally over the past few days has pushed the RSI into overbought territory, indicating a minor correction or sideways move is possible. Sometimes, when the trend is strong, RSI tends to stay in overbought territory for long periods of time. The next upside target is $48,000 as there are no major resistance levels in between.
With each rise, it becomes increasingly difficult for bears to stop the rally. If sellers want to make a comeback, they will need to halt the rally from current levels and pull the BTC/USDT pair below the 20-day EMA ($37,926). This may mean that a deeper correction has begun.
Ether Price Analysis
Ethereum (ETH) continued its march north, pole vaulting above the $2,200 resistance level on December 2nd. If the price closes above this resistance line, a bullish ascending triangle pattern is completed.
The bullish 20-day EMA ($2,063) and RSI near the overbought zone suggest that the uptrend is under control. The pattern target for the triangle breakout is $3,400. However, the bears will not give up easily and will try to limit the rally to $2,500 and $3,000.
The first sign of weakness would be a breakout and close below the $2,200 breakout level. This suggests that the breakout may have been a fake move. Bears would further strengthen their positions if they pull the ETH/USDT pair below the 20-day EMA.
BNB price analysis
BNB (BNB) has been consolidating in a narrow range between $239 and $223 over the past few days, indicating indecision between buyers and sellers.
The bearish 20-day EMA ($233) and the RSI just below the midpoint indicate that the bears have a slight advantage. If buyers overcome the $239 hurdle, the BNB/USDT pair could gain momentum and rise to $265.
Contrary to this assumption, if the price declines from $239, the range-limiting action may continue for some time. If the price falls below $223, the selling could intensify further.
XRP Price Analysis
XRP (XRP) surpassed the 20-day EMA ($0.62) on December 2, but the bulls failed to build on this move. This means there is a lack of demand at higher levels.
The XRP/USDT pair formed a large over-the-counter candlestick pattern on December 4, indicating a fierce battle between bulls and bears. The 20-day EMA ($0.62) is leveling off and the RSI is near its midpoint, indicating a balance between supply and demand. This means that the pair could fluctuate between $0.67 and $0.56 for some time.
If buyers push the price above $0.67, the pair could rebound to $0.74. If the price instead falls below $0.56, the pair could plummet to $0.46.
Solana Price Analysis
Buyers are trying to push Solana (SOL) above the overhead resistance at $68.20 and nullify the bearish head and shoulders pattern.
Failure of a bearish pattern is a bullish signal as it traps aggressive bears and creates a short squeeze. At the same time, buyers who had been sitting on the sidelines due to negative settings jumped into purchasing. The SOL/USDT pair could surge to $85 if the bulls push the price above $68.20.
On the other hand, if bears want to stop the advance, they will need to quickly pull the price below the 20-day EMA ($57). This could open the door to a retest of the important support at $51.
Related: BTC price level expected for Bitcoin whales to ‘lure’ the market to $42,000
Cardano Price Analysis
Buyers pushed Cardano (ADA) above the indirect resistance level of $0.40 on December 4th, but it is struggling to hold higher.
A long wick on the candlestick of the day shows that the bears are not giving up and are on the upswing. If the price settles below $0.40, the bears will try to further strengthen their positions by pushing the ADA/USDT pair below the 20-day EMA ($0.38). If this support is broken, the pair could fall towards its 50-day SMA ($0.34).
On the positive side, if it breaks above $0.40, the price could rise to $0.42 and then to a 52-week high near $0.46. This level is likely to induce strong selling on the downside, but if buyers remain strong, the pair could soar to $0.52.
Dogecoin price analysis
Dogecoin (DOGE) has seen a strong recovery over the past few days. The bulls pushed the price above $0.09 on December 4, indicating strong demand at higher levels.
Both moving averages are trending upward and the RSI is near overbought territory, indicating that the path of least resistance is upwards. The DOGE/USDT pair may bounce to the next psychological level of $0.10. Sellers are expected to build strong defenses in the area between $0.10 and $0.11.
The 20-day EMA ($0.08) remains an important level to watch out for on the downside. A break and close below it suggests the bulls are taking profits. The pair could then fall to its 50-day SMA ($0.07).
Chainlink Price Analysis
Chainlink (LINK) is on the rise. Buyers bought the dip, pushing the price to a local high of $16.60. This is an important level to pay attention to.
Rising moving averages and RSI in positive territory indicate bulls are dominant. If the price rises above $16.60, the LINK/USDT pair could signal a resumption of the uptrend. The pair could then sprint towards $18.30.
Instead, a decline in price from $16.60 would mean that the bulls will remain active at higher levels. The first sign of weakness is a break and close below the 20-day EMA ($14.58). That could bring the price down to $13.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.