Bitcoin (BTC) and most altcoins traded on the 4th of December with massive lending in the crypto derivatives markets. Data shows that more than $2.5 billion will be liquidated within 24 hours.
Ether (ETH) continued to outperform Bitcoin last fall. While Bitcoin’s market dominance has fallen below 41%, Ether continues to consolidate and market dominance has crossed 21%.
Daily view of cryptocurrency market data. Source: Coin360
Some analysts believe that the recent decline in bitcoin could lead to a prolonged phase of consolidation. Decentrader co-founder filbfilb expects Bitcoin to consolidate well in the first quarter of next year. Lex Moskovsky, CIO of Moskovsky Capital, expects “slow growth.”
Could bitcoin drop in the next few days? Let’s analyze the charts of the top 5 digital currencies that the markets can take higher.
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BTC / USDT
Bitcoin received strong support at the 100-day simple moving average ($54,496) at the end of September, making it an important support to protect the bulls.
BTC/USDT daily chart. Source: TradingView
However, the Bears had other plans. They pulled out the bonuses during the 100 day simple moving average on December 3rd, which could have caused multiple stop losses. This led to panic selling and the BTC/USDT pair dropped to $42,000 on Dec 4. The bulls bought the dip with the strength seen from the long tail of today’s candle.
The decline in the 20-day exponential moving average ($56,219) and the relative strength index (RSI) near the oversold territory indicates that the bears have an advantage. If the pair continues to decline from the current levels, the strong support at $40,000 may be the next stop.
Conversely, if the price rises above today’s level, the pair may rise to the 100-day moving average, which may act as a serious obstacle. A breakout and a close above this level would be the first sign of the possibility of a stronger recovery.
4 hour BTC/USDT chart. Source: TradingView
The pair is trading within the descending channel pattern. Bears pulled the prize below the channel benchmark, but the bulls bought the dip and brought the pair back into the channel.
If the bulls can defend the index, the pair may rise to the 20-EMA. This level is expected to become a strong resistance once again. If the price drops from the 20-EMA, this will be a sign that the sentiment is still negative. This can increase the possibility of a duct rupture.
If this happens, the pair could drop to a strong support zone between $42,000 and $40K. Conversely, a breakout and a close above the 20-EMA would be the first sign that the sellers might lose control. Then the pair may rise to the channel resistance line.
ETH / USDT
Ether (ETH) has been capped at $4,868 to $3,900 in recent days. Although the bears pulled the price below the December 4th period, they were unable to hold onto the lower levels. The bulls have been buying aggressively this fall from the long tail of today’s candle.
ETH/USDT daily chart. Source: TradingView
If the bulls keep the price above $3,900, the ETH/USDT pair could rise to the 20-day moving average ($4,326). A breakout and a close above this level could pave the way for a potential rally to all-time highs at $4,868. Bulls need to break this barrier to signal a renewed trend.
Contrary to this assumption, if the price drops below the current level, the bears will make another attempt to decline and keep the pair below $3900. If that succeeds, the pair could drop to the strong support level at $3,400.
ETH/USDT 4-hour chart. Source: TradingView
The pair’s decline is facing heavy resistance near the 61.8% Fib retracement level at $4,215.12. The 20-EMA is sloping down and the RSI is in negative territory, indicating less advantage for the bears.
If the price breaks the $4000 support, the pair may drop to $3823.98. A stop and a close below this level could trigger a retest at $3,503.68.
Conversely, if the bulls lift the price above the moving averages, the pair could rise to $4,654.88 and then challenge all-time highs.
Matic / USDT
In recent days, the Polygon (MATIC) has been trading in a bullish channel pattern. On December 3, the bulls pushed the price above the channel resistance line, but they were unable to sustain the higher levels. This may lead to an earnings announcement on the 4th of December.
MATIC/USDT daily chart. Source: TradingView
The MATIC/USDT pair fell to the 100-day moving average ($1.54), but buyers entered and bought the dip. However, the long wick on today’s candle indicates that the bears are selling near the resistance line.