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 selling could intensify if the price plunges below $223.
XRP price analysis
XRP (XRP) rose above the 20-day EMA ($0.62) on Dec. 2, but the bulls failed to build upon this move. This suggests a lack of demand at higher levels.
The XRP/USDT pair formed a large outside-day candlestick pattern on Dec.4, indicating a tough tussle between the bulls and the bears. The 20-day EMA ($0.62) is flattening out, and the RSI is near the midpoint, indicating a balance between supply and demand. That suggests the pair may oscillate between $0.67 and $0.56 for a while.
If buyers shove the price above $0.67, the pair may rally to $0.74. Instead, if the price skids below $0.56, the pair could plunge to $0.46.
Solana price analysis
Buyers are trying to push Solana (SOL) above the overhead resistance of $68.20 and invalidate the bearish head-and-shoulders pattern.
The failure of a bearish pattern is a bullish sign as it traps the aggressive bears, resulting in a short squeeze. Along with that, buyers who have been sitting on the sidelines due to the negative setup jump in to buy. If bulls drive the price above $68.20, the SOL/USDT pair could surge to $85.
On the other hand, if bears want to prevent the upside, they will have to quickly pull the price below the 20-day EMA ($57). That could open the doors for a retest of the crucial support at $51.
Related: BTC price levels to watch as Bitcoin whales ‘lure’ market to $42K
Cardano price analysis
Buyers propelled Cardano (ADA) above the overhead resistance of $0.40 on Dec. 4, but they are struggling to sustain the higher levels.
The long wick on the day’s candlestick shows that the bears have not given up and are selling on rallies. If the price is pinned below $0.40, the bears will try to strengthen their position further by yanking the ADA/USDT pair below the 20-day EMA ($0.38). If this support cracks, the pair may slump to the 50-day SMA ($0.34).
On the upside, a close above $0.40 could drive the price to $0.42 and thereafter to the 52-week high near $0.46. This level is likely to attract strong selling by the bears but if buyers bulldoze their way through, the pair may skyrocket to $0.52.
Dogecoin price analysis
Dogecoin (DOGE) has been in a strong recovery for the past several days. The bulls pushed the price above $0.09 on Dec. 4, indicating strong demand at higher levels.
Both moving averages are sloping up, and the RSI is near the overbought zone, indicating that the path of least resistance is to the upside. The DOGE/USDT pair could next rally to the psychological level of $0.10. Sellers are expected to mount a strong defense in the zone between $0.10 and $0.11.
The 20-day EMA ($0.08) remains the critical level to watch out for on the downside. A break and close below it will suggest that the bulls are booking profits. That may sink the pair to the 50-day SMA ($0.07).
Chainlink price analysis
Chainlink (LINK) is in an uptrend. Buyers purchased the dip, pushing the price to the local high at $16.60. This is an important level to watch out for.
The upsloping moving averages and the RSI in the positive territory indicate that the bulls are in command. If they propel the price above $16.60, the LINK/USDT pair could signal the resumption of the uptrend. The pair may then sprint toward $18.30.
Instead, if the price turns down from $16.60, it will indicate that the bulls remain active at higher levels. The first sign of weakness will be a break and close below the 20-day EMA ($14.58). That could pull the price down to $13.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.