Recent news reports indicate that US lawmakers may announce a new round of economic stimulus worth nearly $ 908 billion by the end of the day. This second package, if announced, would add to the existing debt heap and could lead to a drop in the US dollar index (DXY). The index is already trading near its lowest level since April 2018.
The slow economic recovery, expansionary monetary policy, overvalued stocks, and negative bond yields are some of the reasons that have prompted investors to search for alternative assets to protect their portfolios.
Gold has been a favorite haven for investors for decades. However, in 2020 many institutional investors diversified Bitcoin (BTC) because they believed it would outpace gold.
Investors making this choice have benefited from the sharp rally in Bitcoin in recent weeks, and many are likely to maintain their position given that most investors are expecting the price of BTC to rise.
Bitcoin’s spectacular recent performance is no secret, and the number of institutional investors gravitating to digital assets is likely to increase as few will want to stay behind by buying deflationary cryptocurrencies.
Anri Arslanian, global crypto leader at PwC, recently told Bloomberg that one day investors will question the wisdom of fund managers who have chosen not to invest in bitcoin.
While an increase in the flow of institutional money appears to be a guarantee, the question that must be asked is at what level organizations will continue to buy. There is no specific answer to this question, but investors should refrain from engaging in FOMO and buying bitcoins just because others do so.
Let’s examine the top 10 cryptocurrency cards to see which one can offer profitable opportunities.
Bitcoin / USD
The bulls are trying to push Bitcoin (BTC) towards pennant formation and $ 19,500 resistance, but are facing stiff downside resistance. As of today, the $ 19,500 resistance remains a major hurdle.
However, the bears need to push their price below the 20-day exponential moving average ($ 18,305) in order to soften the bullish sentiment.
If the price remains below the 20-day moving average, some short-term momentum traders may dump their long positions, and this could push the price down to the support level of $ 17,200. A break below this support could lead to a drop to the 50-day SMA ($ 16,053).
On the other hand, if the bulls do not give in for many reasons, this could create a FOMO among traders, as well as increase momentum and direct the price beyond its bullish resistance zone.
In a strong uptrend, the path of least resistance is ascending until proven otherwise. Above $ 20,000, the BTC / USD pair could accumulate up to $ 21,140 and then reach $ 23,043.
ETH / USD
The bears attempted to flood the Ether (ETH) during the 20-day EMA ($ 559) but failed. The strong return on December 5 shows that when traders buy on the dip to the 20-day moving average, sentiment remains optimistic.
If the bulls can push the price above $ 622,807 towards the $ 635,456 resistance zone, then ETH / USD will complete the ascending triangle pattern with a target of $ 763.61.
Higher moving averages indicate that bulls have gained the upper hand, but the Relative Strength Index (RSI) has formed negative divergence, which ensures caution. If the RSI rises above the downtrend, this indicates that the momentum favors the bulls.
This bullish sentiment will become invalid if the price falls below the current level or upper resistance and falls below the 20 day moving average. Such a move would invalidate the bearish setup and might push the pair towards support of $ 488.134.
XRP / US Dollar
XRP jumped $ 0.543 and climbed above the falling line. This is a positive sign, as it indicates that the correction may end. However, this does not mean that a new bullish trend will begin immediately.
The bears have a hard time giving up. They will try to stop the move towards $ 0.6794. If successful, the XRP / USD pair could stay in the $ 0.6794 to $ 0.543 range for several days.
Next trend determination may begin after the price has moved above or below the interval. If the bulls manage to push the price above $ 0.6794, a re-test would be at $ 0.780574 on the map.
Conversely, if the price falls below $ 0.543, the selling may intensify and lead to a drop to $ 0.4365.
LTC / USD
Litecoin (LTC) returned from the 20-day EMA ($ 79.79) on Dec.5, and the price rose above the highest resistance at $ 84.3334. If the bulls manage to keep the alt currency above this level, the price could reach $ 93.9282.