The Bitcoin (BTC) market and a select group of alternative cryptocurrencies have held their ground against bearish trends, suggesting buyers are not rushed to exit the market.
Meanwhile, the performance of the United States equities markets remained strong the previous week. According to Bespoke, the S&P 500 Index (SPX) and the Nasdaq 100 saw continuous gains for nine weeks, marking their most impressive joint performance since 1985, when they enjoyed an 11-week winning streak. The year 2023 saw the SPX close with a remarkable gain of over 24%, indicating that the bullish sentiment still dominates.
In contrast, the U.S. Dollar Index (DXY) experienced a decline of approximately 2% in 2023, marking its first annual loss since 2020. This decline is attributed to decelerating inflation and the expected 75-basis-point interest rate reduction by the U.S. Federal Reserve in 2024, which has placed significant downward pressure on the dollar index.
The increasing risk appetite of investors and a host of crypto-specific positives boosted Bitcoin by 155% in 2023. Soon, two events hold the key to continuing Bitcoin’s rally. First will be the regulator’s ruling on-the-spot Bitcoin exchange-traded fund applications expected in the next few days, and the second will be Bitcoin’s halving in April.
Will Bitcoin and altcoins be correct soon or resume their upmove? Let’s analyze the charts to find out.
S&P 500 Index (SPX) price analysis
The S&P 500 Index remains in a strong uptrend but witnessed profit-booking at 4,793. Although the trend remains up, the relative strength index (RSI) is in the early stages of forming a negative divergence. This suggests weakening momentum.
SPX daily chart. Source: TradingView
The bears will try to tug the price to the 20-day exponential moving average (EMA) (4,690), which remains the critical short-term level to watch out for. A strong bounce off the 20-day EMA will improve the prospects of a rally above 4,793. The index may then rally to the psychologically important level of 5,000.
Contrarily, if the price turns down and breaks below the 20-day EMA, it will suggest that the bulls are closing their positions in a hurry. That could start a pullback to 4,650 and then to the 50-day simple moving average (SMA) (4,502).
U.S. Dollar Index (DXY) price analysis
The U.S. Dollar Index has been trading inside a wide range between 101 and 108 for several months. The price reached the support on Dec. 27, when the buyers stepped in.
DXY daily chart. Source: TradingView
Any bounce from the current level is expected to face solid resistance at the 20-day EMA (102.26). If the price turns down from the 20-day EMA, it will indicate that the sentiment remains negative and traders are selling on rallies. That will increase the possibility of a break below 101. The index may then collapse to 99.57.
On the contrary, if buyers shove the price above the 20-day EMA, it will suggest that the selling pressure is reducing. The index may then rise to the 50-day SMA (103.88). Such a move will indicate that the range-bound action may continue longer.
Bitcoin (BTC) price analysis
Bitcoin has fallen to the support line of the ascending triangle pattern, an essential level for the bulls to defend.
BTC/USDT daily chart. Source: TradingView
If the price sustains above the 20-day EMA ($42,484), the BTC/USDT pair could climb to the overhead resistance at $44,700. This level may attract strong selling by the bears, but if the buyers prevail, the pair will complete a bullish ascending triangle pattern. This setup has a target objective of $49,178.
Conversely, if the price breaks below the triangle, it will invalidate the bullish view. The pair could then tumble to $40,000. This level may be strong support, but the decline may extend to $37,980 if broken.
Ether (ETH) price analysis
Ether turned down from $2,446 on Dec. 28 and reentered the descending channel on Dec. 29. This suggests that the bears are active at higher levels.
ETH/USDT daily chart. Source: TradingView
A minor advantage in favour of the bulls is that they have not allowed the price to dip below the 20-day EMA ($2,270). However, the selling pressure may increase further if buyers do not push the price back above the channel within the next few days.
If the 20-day EMA cracks, the ETH/USDT pair could drop to the 50-day SMA ($2,177) and then to the channel’s support line near $2,000.
On the upside, a break and close above the channel will suggest that the bulls have not given up. Buyers will again try to propel the price above $2,446 and start the next leg of the uptrend toward $3,000.
BNB price analysis
BNB is witnessing a correction in an uptrend. The bulls are trying to arrest the pullback in the zone between the 38.2% Fibonacci retracement level of $309 and the 50% retracement level of $300.
BNB/USDT daily chart. Source: TradingView
The bulls will try to resume the uptrend if the price rebounds off the support zone. The BNB/USDT pair may rise to $326, where the bulls will likely encounter strong selling by the bears. If buyers bulldoze through the barrier, the pair could soar to $338 and eventually to $350.
Conversely, if the price plunges below $300, the pair could weaken to the 61.8% Fibonacci retracement level of $291 and then to the neckline.
XRP price analysis
XRP has been hovering near the moving averages for the past few days, indicating a lack of aggressive buying or selling.
XRP/USDT daily chart. Source: TradingView
There is a minor support at $0.60. If the price rebounds off this level, the XRP/USDT pair may again try to rise above the downtrend line. If that happens, it will suggest that the selling pressure is reducing. The pair may then attempt a rally to $0.74.
Contrary to this assumption, if the price skids below $0.60, the pair could plummet to the vital support at $0.56. This level will likely attract strong buying by the bulls because a break below it will complete a bearish descending triangle pattern. The pair may then dive to $0.46.
Solana (SOL) price analysis
Solana has been trading above the 50% Fibonacci retracement level of $96.68 for the past few days, but the bulls have failed to resume the uptrend.
SOL/USDT daily chart. Source: TradingView
The first sign of strength will be a break and close above $110. That could open the doors for a retest of the high at $126. If this level is conquered, the SOL/USDT pair may pick up momentum and climb to $156.
The critical support to watch on the downside is the 20-day EMA ($95). If this level holds, the pair may swing between the 20-day EMA and $110 for a few days. A break and close below the 20-day EMA could indicate the start of a sharper pullback to the 50-day SMA ($74).
Cardano (ADA) price analysis
Cardano continues to trade inside the symmetrical triangle pattern, indicating indecision between the bulls and the bears.
ADA/USDT daily chart. Source: TradingView
Although the symmetrical triangle usually acts as a continuation pattern, it is difficult to predict the direction of the breakout with certainty. Hence, waiting for the breakout is better before taking directional bets.
If the price turns up from the support line and rises above the triangle, it will indicate an advantage to buyers. The ADA/USDT pair may rise to $0.68 and $0.80.
On the contrary, a slide below the triangle will indicate that bears are in control. That may start a fall to $0.51.
Avalanche (AVAX) price analysis
The Bulls have been successfully defending the $38 support but have failed to sustain Avalanche above the 20-day EMA ($40).
AVAX/USDT daily chart. Source: TradingView
The flattish 20-day EMA and the RSI just above the midpoint do not give a clear advantage to the bulls or the bears. If the price rises above the 20-day EMA, the AVAX/USDT pair could rally to $45 and, after that, to the recent high of $50.
On the other hand, if the price turns down and breaks below $38, it will signal that bears are in the driver’s seat. That could intensify selling, and the pair may drop to $34 and later to the 50-day SMA ($31.13).
Dogecoin (DOGE) price analysis
Dogecoin’s tight range trading near the 20-day EMA ($0.09) resolved to the downside, and the price reached the 50-day SMA ($0.09) on Dec. 31.
DOGE/USDT daily chart. Source: TradingView
The solid rebound off the 50-day SMA on Jan. 1 shows that the bulls fiercely protect the level. If buyers propel the price above the 20-day EMA, the DOGE/USDT pair could reach $0.10. The bears are likely to mount a vigorous defence of this level.
If the price turns down from the overhead resistance, the pair may remain stuck between $0.10 and the 50-day SMA for some more time. The bears will come out on top if they sink the pair below the 50-day SMA. That could start a downward move to $0.07.
