The current weakness in major altcoins, including Bitcoin and DOGE, suggests that investor sentiment remains negative. It also indicates that bears are active at higher levels, according to crypto analyst Rakesh Upadhyay. So, could lower lows attract buyers in Bitcoin and altcoins? The analyst examines the top 10 cryptocurrencies to determine the levels at which buyers can step in.
Cryptocurrency market overview
As you follow on Kriptokoin.com, the FTX crisis put Bitcoin under pressure in November. However, data from Bitstamp suggests that institutional investors may have viewed the dip as a buying opportunity. The exchange announced that its income from institutions increased by 34% in November compared to October. In another positive sign, Goldman Sachs executive Mathew McDermott said the bank has done some due diligence on crypto companies as they were ‘priced more sensibly’ after the FTX crash.
Daily cryptocurrency market performance. Source: Coin360
ARK Invest noted in the latest issue of The Bitcoin Monthly newsletter that while the FTX boom was the ‘most damaging event in crypto history’, decentralized blockchains are ‘as strong as ever’. Now it’s time for analysis…
BTC, ETH, BNB, XRP and ADA analysis
Bitcoin (BTC)
For the past few days, Bitcoin has been trading around $16,966 with its 20-day exponential moving average (EMA). This threatens to break below the immediate support at $16,787.
If that happens, the short-term advantage is likely to turn in favor of the bears. Thus, a drop to $16,000 is likely for BTC. Such a move would indicate that BTC will be stuck between $15,476 and $17,622 for a few more days. The longer the time spent in range, the stronger the detachment from it will be. On the upside, the bulls will need to push and hold above the 50-day simple moving average (SMA) of $18,122 to gain the upper hand. It is possible for BTC to gain momentum later and rally to $20,000.
Ethereum (ETH)
ETH has been trading between moving averages for the past few days. However, it fell below the 20-day EMA ($1,250) on Dec. This shows that the bears are beating the bulls.
If the price stays below the 20-day EMA, ETH is likely to drop to $1,151 and then the key support at $1,073. On the contrary, if the price rises quickly and rises above the 20-day EMA, it will suggest strong buying on the dips. It is possible that this increases the likelihood of a break above the 50-day SMA at $1,331. Above this level, there is no significant resistance until ETB reaches the downtrend line of the descending channel.
Binance Coin (BNB)
The bulls tried to push BNB above the overhead resistance of $300 on Dec. However, the bears held their ground. Sellers strengthened their positions by pushing the price below the $285 immediate support on Dec.
If the price stays below $285, BNB is likely to drop to $275. This level is likely to act as a minor support. However, if it breaks, the selling could pick up and BNB could drop to the critical support at $250. If the bulls want to avoid the decline, they will have to push the price above $300 and sustain it. It is possible that this will mislead the aggressive bears and push the price towards the overhead resistance of $338. This level will likely be the scene of a fierce battle between the bulls and bears again.
Ripple (XRP)
The bears have successfully defended the 20-day EMA of $0.39 over the past few days. It also pulled XRP below the bullish trend line on Dec. This invalidates the emerging ascending triangle pattern.
Buyers will try to bail out the strong support at $0.37. If the price recovers from this level and rises above the 20-day EMA, XRP is likely to consolidate between $0.37 and $0.41 for a while. However, a break and close above $0.41 will indicate the start of a fresh upward move. Meanwhile, the bears may have other plans. They will try to break the support at $0.37 and push the price towards $0.34. This is likely to keep XRP between $0.30 and $0.41 for a few more days.
Cardano (ADA)
ADA failed to hold above the 20-day EMA of $0.32 on Dec. This may have encouraged short-term buyers to close their long positions and the bears to create new shorts.
Sellers will try to push the price below the critical support of $0.29. However, they are likely to face strong resistance from the bulls. Because, if this level drops, it will probably signal that the downtrend of ADA will start again. Although the trend is down, the relative strength index (RSI) remains bullish. This suggests that lower levels could attract buyers. The first sign of sustainable recovery may be a break. Thus, it is likely to rise above $0.33. It is possible for ADA to rise to the downtrend line later on.
DOGE, MATIC, DOT, LTC and UNI analysis
Dogecoin (DOGE)
The long wick on the December 5 candlestick indicates that the DOGE bears are defending the 50% Fibonacci retracement level at $0.11.
DOGE bounced back and broke below the 20-day EMA of $0.09 on Dec. A minor positive point, however, is that the bulls buy the dips to the 50-day SMA of $0.09. If the price bounces back from the current level, Dogecoin (DOGE) is likely to rise again to $0.11. Meanwhile, the RSI has dropped close to the center. This suggests that the bullish momentum is probably waning. It is possible that the bears will try to take the DOGE price below the 50-day SMA and gain an edge. If successful, DOGE could gradually slide towards $0.07.
Polygon (MATIC)
Buyers tried to push MATIC above $0.95 on Dec. However, the bears fiercely held the level. The price declined and broke below the 20-day EMA ($0.90) on Dec. This shows that the efforts of the bulls to turn the 20-day EMA to support have failed.
The bears will try to seize this opportunity and push the price towards the uptrend line. This is an important level to consider, as the bulls have successfully held it three times before. If this support collapses, MATIC is likely to slide towards the critical support at $0.69. This negative view will be invalidated in the near term if the price rises and rises above the overhead resistance of $0.97. It is possible that this could pave the way for a possible rally to $1.05.
Polkadot (DOT)
The DOT has repeatedly broken the 20-day $5.50 EMA between December 2 and 5. However, the bulls failed to increase this strength. This indicates that demand is drying up at higher levels.
The bears will try to continue the downtrend by pulling the price below the strong support at $5. If they do, the DOT is likely to drop to $4.32. Another possibility is for the price to recover from $5. This will signal strong buying at lower levels. The bulls will then try to push the price above $5.73. If they do, it’s likely to signal a double bottom pattern. It is possible for the DOT to rise later to $6.18 and then to the pattern target of $6.46, which is near the bearish trend line.
Litecoin (LTC)
LTC broke above the $84 resistance on Dec. However, the long wick on the day’s candlestick indicates selling at higher levels. It is possible that this encouraged short-term traders to take profits. Hence, this brought the price to the breakout level of $75.
Meanwhile, the moving averages are rising. However, the RSI has formed a bearish divergence, indicating that the buying pressure is easing. A break and close below the 20-day $74 EMA is likely to increase the chances of a drop to the 50-day $64 SMA. Conversely, if the price rises from the 20-day EMA to $74, this will indicate that the trend remains positive. It will also be proof that traders are buying the dips. The bulls will then make another attempt to break the overhead barrier at $85 and push LTC towards $104.
Uniswap (UNI)
UNI broke above the 50-day SMA of $6.16 on Dec. However, the bulls failed to sustain the buying pressure and pushed the price to the resistance line of the symmetrical triangle pattern.
The price fell on Dec 7 and the bears are trying to push the price below the 20-day EMA of $5.92. If it fails to hold this level, it is possible that the sales momentum will increase. Thus, UNI is likely to fall on the support line of the triangle. Alternatively, if the price rises and rises above $6.55, it will turn the short-term advantage in favor of the buyers. It is possible that UNI will later rise to the resistance line where the bulls will face strong selling again by the bears. The next trend move will likely start with a break above or below the triangle.
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