On December 4th, the Bitcoin and Ethereum market experienced significant increases above their respective resistance levels, signalling the continued bullish sentiment. The fear of missing out among traders intensifies as the price continues to climb without a significant correction. When traders rush to buy at higher prices, it can result in a rapid peak before a correction occurs.
According to Bybit’s fourth-quarter report on cryptocurrency, institutional traders had 35% of their assets in Bitcoin, 15% in Ethereum, and a substantial 45% in stablecoins. Only a tiny fraction, 5%, was invested in other alternative cryptocurrencies.
This data indicates that institutional investors still have substantial resources, allowing them to purchase their preferred cryptocurrencies by liquidating 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 (SPX) price analysis
The bulls kicked the S&P 500 Index above the overhead resistance of 4,541 on November 20th and thwarted attempts by the bears to pull the price back below the breakout level.
The up-move will likely 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 (DXY) price analysis
The U.S. Dollar Index 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 sharply from the 20-day EMA, it will suggest that the sentiment remains negative and that 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 more substantial relief rally to 104.55 and later to the 50-day SMA (105.41).
Bitcoin (BTC) 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. The next target objective on the upside is $48,000, as there is no significant resistance level in between.
With every rise, it is difficult for the bears to stop the rally. If sellers want to make a comeback, they must 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.
Ethereum (ETH) price analysis
Ethereum continued its northward march and pole vaulted above the $2,200 resistance on December 2nd. If the price closes above this resistance, a bullish ascending triangle pattern will be completed.
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 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 rose above the 20-day EMA ($0.62) on December 2nd, 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 (SOL) price analysis
Buyers are trying to push Solana 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. Also, buyers are sitting on the sidelines and jump in to buy due to the negative setup. 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.
Cardano (ADA) price analysis
Buyers propelled Cardano above the overhead resistance of $0.40 on December 4th, 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, after that, to the 52-week high near $0.46. This level will likely attract strong selling by the bears, but if buyers bulldoze their way through, the pair may skyrocket to $0.52.
Dogecoin (DOGE) price analysis
Dogecoin has been in a strong recovery for the past several days. The bulls pushed the price above $0.09 on December 4th, 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 rally to the psychological level of $0.10. Sellers are expected to mount a vigorous defence between $0.10 and $0.11 in the zone.
The 20-day EMA ($0.08) remains the critical level to watch out for on the downside. A break and close below will suggest that the bulls are booking profits. That may sink the pair to the 50-day SMA ($0.07).
Chainlink (LINK) price analysis
Chainlink is in an uptrend. Buyers purchased the dip, pushing the price to the local high of $16.60. This is a critical 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.
