Bitcoin (BTC) continues to lose ground in December, a signal that traders may be locking in their gains before the end of the year. The lack of a Santa rally in the U.S. equity markets indicates that the risk-off sentiment prevails due to the uncertainty regarding the spread of the COVID-19 Omicron variant in several parts of the world.
Even after the sharp drop in Bitcoin’s price, the demand from institutional investors remains tepid, and data shows that the largest institutional Bitcoin product, the Grayscale Bitcoin Trust (GBTC), is trading at a discount of more than 20%.
Veteran trader Peter Brandt said that “high volume panic capitulations” usually signal a bottom in Bitcoin and that has not yet happened during the current decline from the all-time high. This could be a hint that the “real” capitulation is yet to happen.
Could Bitcoin and most major altcoins continue their down move in the next few days or will a Santa rally come to the rescue? Let’s study the charts of the top-10 cryptocurrencies to find out.
The bulls have been defending the 200-day simple moving average ($47,130) for the past few days, but they have not been able to push the price above the 20-day exponential moving average ($49,622). This shows a lack of demand at higher levels.
The bears pulled the price below the 200-day SMA on Dec. 20 and if the price sustains below this crucial level, the selling may pick up momentum. TheBTC/USDT pair is at risk of hitting the strong support zone at $42,000 to $39,600. The bulls are likely to defend this zone aggressively but the recovery may face a stiff challenge at the 200-day SMA.
This negative view could invalidate if the price turns up from the current level and rises above the 20-day EMA. Such a move will suggest that the break below the 200-day SMA could have been a bear trap. The pair could then rise to $52,000 and later attempt a rally to $60,000.
Ether (ETH) has been trading inside a descending channel for the past few days. The bounce off the support line of the channel on Dec. 13 failed to rise above the 20-day EMA ($4,058), indicating that bears are selling on rallies.
The downsloping 20-day EMA and the relative strength index (RSI) below 43 suggest that the path of least resistance is to the downside. The ETH/USDT pair could slide to $3,643.73 and then to the support line of the channel.
A strong rebound off the support line could extend the stay inside the channel for a few more days. The bulls will then make one more attempt to push the price above the channel. If they succeed, it will indicate that the selling pressure may be reducing.
Alternatively, if the price breaks below the channel, the bears could challenge the 200-day SMA ($3,288). A break and close below this level could intensify the selling.
The buyers successfully defended the 100-day SMA ($509) for the past few days but they could not push Binance Coin (BNB) above the 20-day EMA ($552). This suggests that demand dries up at higher levels.
The downsloping 20-day EMA and the RSI in the negative zone suggest that bears have the upper hand. If the price breaks and sustains below the 100-day SMA, the BNB/USDT pair could drop to the 200-day SMA ($436).
Contrary to this assumption, if the price turns up from the current level and rises above the 20-day EMA, it will suggest that the bulls have absorbed the supply. That could start a recovery to $617 and next to the stiff overhead resistance at $669.30.
Solana (SOL) turned down from the 20-day EMA ($183) on Dec. 19, indicating that bears are defending this level with vigor. If the price slips and sustains below $167.88, a retest of $148.04 is possible.
This is an important support to watch out for because a break below it could sink the SOL/USDT pair to the 200-day SMA ($120). The downsloping 20-day EMA and the RSI below 43 suggest that bears are in control.
This negative view will invalidate if the price turns up from the current level and breaks above the 20-day EMA. Such a move will suggest that the selling pressure may be reducing. The pair could then attempt a rally to $200 and later to $240.
Cardano (ADA) repeatedly bounced off the strong support at $1.18 in the past few days but the bulls have not been able to push the price above the 20-day EMA ($1.35). This suggests a lack of demand at higher levels.
The bears will now attempt to sink and sustain the price below $1.18. If they manage to do that, the ADA/USDT pair could drop to the critical support at $1. The bulls are likely to defend this level aggressively.
The first sign of strength will be a break and close above the 20-day EMA. Such a move will indicate that demand exceeds supply. The pair could first rise to $1.47 and then attempt a rally to the overhead resistance at $1.87.
XRP has been trading between $0.75 and $0.85 for the past few days. The bulls pushed the price above $0.85 today but the long wick on the candlestick suggests that bears continue to sell on rallies.
The RSI has recovered strongly from the oversold levels, indicating that the bearish momentum may be losing steam. This could keep the XRP/USDT pair stuck inside the range for a few more days.
A break and close above $0.85 will indicate that the bulls have overpowered the bears. That could push the price to the psychological mark at $1. Alternatively, a break and close below $0.75 could open the doors for a possible drop to $0.60.
Terra’s LUNA token soared to a new all-time high today but the long wick on the day’s candlestick suggests that short-term traders may be booking profits at higher levels.
If the price sustains below $78.29, the bears will attempt to pull the LUNA/USDT pair to the 20-day EMA ($64). This is an important support to keep an eye on because a strong rebound off it will suggest that sentiment remains positive and traders are buying on dips.
The bulls will then again try to push the price above the overhead zone at $78.29 to $81.87. If they do that, the pair could start its rally toward the psychological mark at $100.
Conversely, if bears pull the price below the 20-day EMA, it will suggest that traders are exiting their positions. That could sink the pair to $50.
Avalanche (AVAX) bounced off the strong support at $75.50 on Dec. 14 and broke above the downtrend line on Dec. 15. This indicated that bulls are attempting to resume the uptrend.
However, the up-move turned down from the 61.8% Fibonacci retracement level at $119.69, indicating that bears are selling on rallies. The AVAX/USDT pair has reached critical support at the 20-day EMA ($99).
If the price rebounds off the current level, the buyers will again attempt to resume the up-move. A break and close above $119.69 could clear the path for a rally to $131.70 and later to the all-time high at $147.
Conversely, if the price breaks and sustains below the 20-day EMA, the pair could drift down to the strong support at $75.50.
Polkadot (DOT) has been trading below the 200-day SMA ($28.82) for the past few days. This suggests that bears are in command. The sellers are currently attempting to sink the price below the strong support zone at $25 to $22.66.
If they manage to do that, the DOT/USDT pair could extend its downward journey toward the next support at $16.81. The longer the price stays below the 200-day SMA, the greater the possibility of the continuation of the downtrend.
Contrary to this assumption, if the price rebounds off the current zone, the bulls will make one more attempt to push the pair above the 200-day SMA. If they succeed, it will suggest that the bears are losing their grip. The pair could then rise toward $39.35.
Dogecoin (DOGE) rebounded off the strong support at $0.15 on Dec. 14 and soared above the 20-day EMA ($0.18) but the long wick on the candlestick shows that traders sold at higher levels.
The bears pulled the price back below the 20-day EMA on Dec. 15. This could have trapped the aggressive bulls who may have then been forced to liquidate their position. This has pulled the price to the strong support at $0.15.
A break and close below this level could pull the price to the Dec. 4 low at $0.13. If this support cracks, the DOGE/USDT pair could drop to the psychological level at $0.10. Conversely, if the price rebounds off the current level, the bulls will again attempt to clear the overhead hurdle at the 20-day EMA and $0.19.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.