Certain altcoins, including Bitcoin and DOGE, are showing signs of a possible recovery in the near term. But according to crypto analyst Rakesh Upadhyay, it is possible that higher levels will continue to attract sellers. The analyst examines the top 10 cryptocurrencies to determine the path of least resistance in the short term.
An overview of the cryptocurrency market
As the year draws to a close, investors will eagerly watch a Santa Claus rally on Wall Street. Because many believe that if there is no rally, the next year will either remain flat or turn negative. Jurrien Timmer, global macro director at wealth management giant Fidelity Investments, tweeted on Dec. 19 that US stock markets could remain ‘sideways’ and volatile in 2023. Also, Timmer expects one or more retests of the 2022 low. However, it doesn’t have to be much worse than that, according to him.
cryptocoin.comAs you follow, the crypto market has largely correlated with the S&P 500 in 2022. A sideways or negative move in the equity markets may not bode well for the crypto market unless both markets diverge. Analysts are divided on the future price action for Bitcoin. Some are waiting for an improvement, while others are waiting for a lower leg. Now it’s time for analysis…
BTC, ETH, BNB, XRP and DOGE analysis
Bitcoin (BTC)
Bitcoin has been trading below the 20-day exponential moving average (EMA) at $16,985 since Dec. Despite this, the bears did not take advantage of this situation. This suggests that lower levels are attracting buyers.
BTC saw slight gains on December 20 and reached the 20-day EMA. This is an important level for the bears to defend in the short term. Because a break above this is possible that could set the floor for a possible rally to $17,622 followed by $18,387. Alternatively, selling is likely to accelerate if the price declines from the moving averages and sinks below $16,256. Thus, BTC is likely to drop to $16,000 and then retest $15.476. The horizontal 20-day EMA and the relative strength index (RSI) near 47 give neither the bulls nor the bears a clear advantage. It is possible that this could lead to a randomly volatile price action in the near term as both buyers and sellers try to assert their superiority.
Ethereum (ETH)
ETH rebounded from nearby support at $1,150 on Dec. 20, indicating that lower levels are attracting buyers. The relief rally reached the 20-day EMA of $1,233, where the bears could form a strong defense.
If the price breaks from the 20-day EMA, the bears will make another attempt to push ETH below the $1,150 support. If they succeed, it will complete the head-and-shoulder model in the near term. This setup has a target target of $948. Instead, if buyers push the price above the moving averages, a rise to $1,352 is possible for ETH. This level is likely to act as a major obstacle again. However, if surpassed, the rally is likely to reach the downtrend line. The bears are expected to maintain this level with all their might. Because a break above this is possible to signal a potential trend change.
Binance Coin (BNB)
BNB bounced off $220 on December 17. However, the pullback faces strong selling at the $250 breakout level. This shows that the bears are trying to turn the level into resistance.
The downward sloping moving averages and the RSI near 40 show that the bears are in command. If the price drops below $236, BNB is likely to retest the support at $220. A break below this level is possible to drop BNB to $200. This downside is likely to be invalidated in the near term if buyers push the price above the 20-day EMA of $265. BNB is then likely to extend its relief rally to the 50-day simple moving average (SMA) at $286 and then $318.
Ripple (XRP)
XRP dropped below the $0.37 support on Dec. 16. This shows that the bears have gained the upper hand in the near term. The price is likely to fluctuate in a wide range between $0.30 and $0.41 for the next few days.
Any relief rally is likely to face stiff resistance at the moving averages and again at $0.41. If the bulls want to gain the upper hand, they will have to push the price above $0.41. It is also possible that this could start a strong rally to $0.51. On the downside, the key support to watch is $0.30. If this level is broken, XRP is likely to start the next leg. BNB is likely to extend its decline to $0.25 later.
Dogecoin (DOGE)
DOGE reached a key level of $0.07 on Dec. 19, when the bulls stepped in and tried to stop the decline. The bears will likely have other plans as buyers try to push DOGE price to the downtrend line.
The downward sloping moving averages and the RSI near the oversold zone indicate that the path of least resistance is to the downside. A weak bounce from $0.07 will increase the likelihood of a break below the support. If this happens, DOGE price is likely to drop to the next major support at $0.05. On the upside, the bulls will need to push and sustain the price above the downtrend line to attract more buyers. DOGE price is likely to rise to the overhead resistance at $0.11 later.
ADA, MATIC, DOT, LTC and UNI analysis
Cardano (ADA)
ADA dropped below $0.29 on Dec. 16. This, in turn, exacerbated the sale by pulling the price below the support line. The sharp decline during the day also invalidated the positive divergence that developed in the RSI.
ADA continued to slide and hit the strong support at $0.25. The oversold level on the RSI indicates that a recovery or consolidation may be just around the corner. That said, sellers are unlikely to give up their advantage easily. Besides, it is likely to form a strong challenge at $0.27 and again at $0.29. If the price drops from this broad zone, ADA is likely to drop back to $0.25. The recovery is likely to accelerate once the price climbs above the 20-day EMA of $0.29. Because it is possible that this will encourage short-term bears to take profits.
Polygon (MATIC)
MATIC has been in a wide range between $1.05 and $0.69 for the past few days. It is possible that the repeated failure of buyers to push the price above $0.95 encouraged short-term traders to take profits.
This started the downside journey towards the strong support at $0.69 in MATIC. Buyers are likely to defend this level aggressively. Because a break below this is likely to intensify the selling and push the price towards $0.52. On the upside, the first hurdle is possible at the $0.85 20-day EMA. If the price turns down from this level, a break below $0.69 increases the probability. On the other hand, if the bulls push the price above the 20-day EMA, MATIC is likely to go up to $0.95.
Polkadot (DOT)
DOT remains in a strong downtrend as bears sell out on every small rally. The inability to push and sustain the price above the 20-day EMA of $5.01 attracted heavy selling on Dec. 16, which restarted the downtrend.
The downward sloping moving averages and the RSI near the oversold zone suggest that the bears are in control. If the price dips below $4.40, the next stop is likely to be $4.00. If the bulls want to recover the situation, they will have to start a recovery quickly and push the price above the 20-day EMA. Such a move would indicate accumulation at lower levels. The DOT is likely to rise to the 50-day SMA at $5.52 later. Sellers are likely to zealously protect the zone between the moving averages.
Litecoin (LTC)
LTC broke below the $75 breakout level on December 15. It is possible that this triggered a few stop losses as well. Selling continued on December 16 and the price dropped below the 50-day SMA of $69.
Buyers are trying to start a recovery. However, they are likely to face strong selling on the moving averages. If the price breaks out of this overhead resistance, the bears will try to increase their advantage by pulling LTC below $61. If this support is broken, LTC is likely to drop to $52. The first sign of strength will be a breakout and a close above the $70 20-day EMA. This is likely to open the doors for a possible retest of $75. This remains the key level to watch out for on the upside. Because, a break above this will indicate the start of a new upward move.
Uniswap (UNI)
UNI rebounded from the support line of the symmetrical triangle on December 20. This indicated that the bulls continue to buy the drop to this level.
The recovery is possible to reach $5.50 and then the 20-day EMA of $5.65. The bears will likely sell on rallies towards the 20-day EMA. If the price turns down from this level, the sellers will again try to push the UNI down below the triangle. If successful, UNI is likely to start a fresh decline towards $4.60. On the contrary, if the buyers push the price above the 20-day EMA, it is possible for UNI to gain momentum and rise towards the resistance line. The bulls will have to break through this hurdle to signal the start of a new upward move.
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