Many central banks have taken advantage of unique monetary expansion and interest rate cuts to support their economies affected by the coronavirus pandemic. Record liquidity has pushed the S&P 500, Gold and Bitcoin (BTC) index to soar, indicating that investors are investing in assets of their choice.
While gold is well below its full-time high in August, both the S&P 500 and Bitcoin are close to their peak times.
The last five trading days of the year and the first two days of the following year have historically been bullish for the S&P 500, called Santa Roli. It will be interesting to see if Bitcoin continues to grow in Santa Claus in 2021 with the arrival of institutional investors.
Another interesting thing to note is that Bitcoin rose from a low of $ 10,377.10 in October to a high of $ 28,419.94 in December, up 173.87% over three months. While sentiment is bullish and institutional flows are accelerating, every bull market is experiencing strong corrections, and Bitcoin is unlikely to be an exception.
Traders need to protect the excess paper and not get greedy, as a correction after a vertical meeting can be brutal. Let’s take a look at the maps of the top 10 cryptocurrencies to identify general levels that can act as strong resistance that can trigger a correction.
Bitcoin / US dollars
On December 27, Bitcoin formed a Doji candlestick pattern with a long wick, indicating a profit taken above the $ 27,000 level. The bulls are again trying to keep the price above $ 27,000 today.
If the price falls below $ 25,819.69, the BTC / USD pair may fall to instant support of $ 24,302.50 and then to a 20-day exponential moving average of $ 22,951.
A strong rebound from this support will indicate that the uptrend is still in place and that bulls are buying on downturns. If this happens, the bears will try to resume the bullish trend.
However, if the Bears push the price below the 20-day EMA, it will indicate a short-term peak formation. The correction can then be extended to the 50-day simple moving average of $ 19,577.
Contrary to this assumption, if the bulls pushed the price and held above $ 28,419.94, the pair could rise to $ 30K, which is likely to be tough resistance.
ETH / USD
Ether (ETH) jumped from the 50-day simple moving average ($ 566) on December 23, indicating that bulls are rising in downturns. Buyers pulled the price above $ 622,807 on December 25, indicating that the correction may end.
The ETH / USD pair gained momentum on December 27 and broke the upper resistance to $ 676,325. This indicates a resumption of the trend. The next growth target is $ 800.
Bullish moving average and relative strength index (RSI) near overbought territory indicate that the bulls are in control. This positive view will be invalidated if the pair falls below the support level of $ 622,807.
XRP / US Dollar
XRP is in a downward trend. The alternative currency broke below the significant support level of $ 0.435 on December 23, intensifying sales and causing a sharp drop to $ 0.2132.
The 20-day sloping exponential moving average ($ 0.426) and RSI in negative territory indicate that the bears have an edge.
When the feeling is bearish, small collections sell out, and that is what happened on December 25th. XRP / USD fell from $ 0.384998, which is above the Fibonacci retracement level of 38.2% in the last phase of the autumn.
However, the Bears are currently trying to keep the pair above the support level of $ 0.25. If successful, the pair can stay within a specific range from $ 0.25 to $ 0.38 for several days. The first sign of strength will be a breach of the 20-day EMA.
LTC / USD
Litecoin (LTC) broke the flag and the upper resistance of $ 124.1278 on December 25, indicating a resumption of the trend. Violation of this parameter has a target of $ 160.
However, the Bears are not ready to give this up, as they are currently trying to stop the bullish move at the resistance level of $ 140. 107) occur.
On the other hand, if the bulls manage to defend the $ 124,1278 level, it will mean that this level has become a support level. This can increase the chances of an outbreak in the upper resistance zone of $ 140-145.