SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX

Bitcoin (BTC) closed last week up 9.55%, but started the new week weak, falling close to $40,500. Bitcoin’s sharp correction also led to the liquidation of several altcoins. According to CoinGlass data, as of December 11, the volume of liquidated buys between cryptocurrencies was over $300 million.

Sharp drops do not change the trends of Bitcoin and altcoins. Because corrections are part and parcel of every upward trend. Typically, a vertical rally is followed by a sharp decline, which shakes weak hands and allows long-term investors to buy more at lower levels.

The correction is unlikely to last much longer due to several bullish catalysts in 2024. Analysts expect one or more Bitcoin exchange-traded funds to receive regulatory approval in January, which could be a game-changer. This was followed by Bitcoin’s halving in April, and finally, expectations of an interest rate cut by the US Federal Reserve (Fed) could boost risky assets. Goldman Sachs expects the Federal Reserve to begin cutting interest rates in the third quarter of 2024.

What are the critical levels that can stop Bitcoin and altcoins from falling? Let’s analyze the chart to find out.

S&P 500 Index Price Analysis

The bulls have managed to keep the S&P 500 Index (SPX) above the breakout level of 4,541 over the past few days. This indicates that buyers are trying to turn the level into support.

A rising 20-day exponential moving average (4,531) and the Relative Strength Index (RSI) near overbought territory indicate that the path of least resistance is to the upside. If buyers break the overhead resistance of 4,650, the index could gain momentum and surge towards 4,800.

This bullish outlook is invalidated in the near term if the price declines and falls below the 20-day EMA. This implies aggressive selling at higher levels. Afterwards, the index may fall towards the 50-day simple moving average (4,393).

US Dollar Index Price Analysis

The US Dollar Index (DXY) rebounded from the 61.8% Fibonacci retracement level of 102.55 on November 29, indicating buying at lower levels.

The relief rally reached the EMA (104) on the 20th, and the bears are putting up a firm defense. A small positive in favor of the bulls is that they did not allow the price to fall significantly below the 20-day EMA.

There is a small resistance at 104.50, but an extension of this level could push the index towards its 50-day SMA (105). A flat 20-day EMA and RSI near the midpoint suggest a trading range in the near term. Strong support to the downside is at 102.46.

Bitcoin Price Analysis

Bitcoin’s tight consolidation near $44,700 was resolved to the downside on December 11. Failure to resume the upward movement may have prompted traders to sell.

A small positive in favor of the bulls is that the price has bounced off the 20-day EMA ($40,708), as can be seen in the long tail of the candle. Buyers will once again attempt to push the BTC/USDT pair above $44,700, but the bears may not give up easily. A negative divergence in RSI warns that bullish momentum is slowing.

If the price slips below the 20-day EMA, the correction could deepen towards a breakout level of $37,980. This level is likely to induce solid buying by the bulls. On the positive side, a breakout and close above $44,700 means the bulls are back in control.

Ether Price Analysis

Ethereum (ETH) began a downward trend from $2,403 on December 9 and plummeted below the breakout level of $2,200 on December 11. This suggests that the bulls are rushing for the exit.

Price action over the past few days has resulted in a negative divergence forming in the RSI, indicating that the bullish momentum is waning. Nevertheless, the bulls are trying to strongly defend the 20-day EMA ($2,186).

If the price rebounds from current levels, the bulls will again try to resume the upward trend by pushing the ETH/USDT pair above $2,403. If that happens, the pair could rise to $2,500 and later to $3,000.

This bullish view will be invalidated if the price closes below the 20-day EMA. This could deepen the correction towards the 50-day SMA ($2,012).

BNB price analysis

BNB (BNB) witnessed an over-the-counter candlestick pattern on December 11, signifying a fierce battle between bulls and bears.

A long tail on the day’s candle indicates aggressive buying at lower levels. If the price remains above $239.2, the BNB/USDT pair is likely to gain momentum and soar to $265. This level may prove to be a difficult hurdle to clear, but if buyers are successful, the pair will complete a bullish inverse head and shoulders pattern.

If the downtrend continues and the price stays below $223, the trend will change in favor of the bears. The pair could then fall to the key support level at $203.

XRP Price Analysis

XRP (XRP) rose above the $0.67 resistance level on December 8th, but was unable to build on this breakout on December 9th. This means higher levels of selling.

The bulls attempted to push the price above $0.67 again on December 10th, but the bears held on. This began a sharp decline that took the price below its 50-day SMA ($0.62) on December 11th. If the price closes below the 50-day SMA, the XRP/USDT pair may fall towards the important support level at $0.56.

If the price rises from the current level, a dip will be a buy signal. The bulls will then try to overcome the hurdle again at $0.67. If they do that, the bears could move to $0.74, where they are expected to show strong defense.

Solana Price Analysis

Solana (SOL) is facing a selloff with an overhead of $78. Failure to extend this level could have started the decline on December 11th.

The SOL/USDT pair finds support at the 20-day EMA ($63), indicating that lower levels continue to attract buyers. If the bulls sustain the bounce, the pair could retest the highs of $78. A close above this level could open the door for a rise to the psychological level of $100.

If bears want to stop the rally, they need to pull the price below the 20-day EMA. This could initiate a deeper correction towards the important support level at $51.

Related: Is Bitcoin Price Falling Towards $40,000?

Cardano Price Analysis

Buyers pushed Cardano (ADA) above indirect resistance at $0.60 on December 9th and 10th, but failed to sustain the level higher.

The uptrend over the past few days has pushed the RSI deep into overbought territory, indicating that the rally is overextended in the near term. This may have tempted short-term bulls to abandon positions that began the decline on December 11th.

The ADA/USDT pair is trying to find support at the 50% Fibonacci retracement level of $0.51. If this level holds, buyers will again attempt to drive the price up to the local high of $0.65. On the other hand, a drop below $0.51 could push the price towards the 20-day EMA ($0.45).

Dogecoin price analysis

As can be seen from the long wick of the December 11 candlestick, the bears are posing a strong challenge to the $0.11 rally in Dogecoin (DOGE).

The price may fall towards the 20-day EMA ($0.09), which is an important level to watch out for. A strong bounce in the 20-day EMA suggests sentiment remains positive and traders are buying dips. This increases the likelihood of a break above $0.11. If that happens, the DOGE/USDT pair could jump to $0.15.

Conversely, a drop below the 20-day EMA suggests traders are aggressively taking profits. The pair could then extend the decline towards the 50-day SMA ($0.08).

Avalanche Price Analysis

Avalanche (AVAX) has had a strong rally over the past few days. Buyers easily broke the barrier at $31 on December 9th and reached $38 on December 10th.

The vertical rally has pushed RSI deep into overbought territory, meaning a correction or sideways move is possible in the near term. Prices fell on December 11, indicating that short-term traders may take profits.

If buyers don’t allow the price to fall below $31, the chances of it rising above $38 increase. The AVAX/USDT pair may rise to $46 and later to $50. Instead, if the price declines and falls below $31, it would mean the start of a deeper correction towards the 20-day EMA ($25.85).