Bitcoin and altcoins are beginning to flash signals of a potential trend change, but a handful of downside risks remain.
Non-farm payrolls in the United States rose by 263,000 in November, exceeding economists’ expectations of an increase of 200,000. Analysts believe that the numbers remain hot and do not allow much scope for the Federal Reserve to slow down its aggressive rate hikes.
This is contrary to Fed Chair Jerome Powell’s remarks delivered at the Brookings Institution where he said that the central bank could reduce the pace of rate hikes “as soon as December.” That triggered a sharp rally in risk assets. After the latest jobs report, the market participants will closely watch the Fed’s comments and decision in its Dec. 13 and Dec.14 meeting.
Daily cryptocurrency market performance. Source: Coin360
The Fed’s decision may also affect Bitcoin (BTC), which remains in a firm bear grip. Coinglass data shows that Bitcoin’s monthly returns in November of 2018, 2019, and 2021 were negative and that was followed by a further fall in December.
Will history repeat itself and Bitcoin decline again in December or will buyers come out on top and push the price higher? Let’s study the charts of the top-10 cryptocurrencies to gain some insight.
Bitcoin soared above the descending triangle and the 20-day exponential moving average ($16,949) on Nov. 30. This is the first indication that the downtrend could be ending.
BTC/USDT daily chart. Source: TradingView
The 20-day EMA has flattened out and the relative strength index (RSI) is just below the midpoint, indicating a balance between supply and demand. This equilibrium would shift in favor of the bulls if they thrust the price above the overhead resistance at $17,622.
If buyers sustain the price above this level, the BTC/USDT pair could pick up momentum and rally to the 50-day simple moving average ($18,349). This level may again act as a huddle but is likely to be crossed. The pair could then start its northward march toward $21,500.
If bulls fail to propel the price above $17,622, the pair could remain range-bound for some more time.
Ether (ETH) continues to trade inside the descending channel pattern but the bulls are attempting to tilt the short-term advantage in their favor. Buyers drove the price above the 20-day EMA ($1,245) on Nov. 30, suggesting demand at higher levels.
ETH/USDT daily chart. Source: TradingView
The bears will again try to stall the recovery at the 50-day SMA ($1,335) but the likelihood of a break above it is high. If that happens, the ETH/USDT pair could rally to the resistance line of the channel. This level may prove to be a major roadblock for the bulls.
Alternatively, the failure to push the price above the 50-day SMA may create an opening for the bears to pull the pair back below the 20-day EMA. The pair could then give back its recent gains and drop to $1,151.
BNB (BNB) bounced off the moving averages on Nov. 29 but the bulls could not clear the overhead barrier at $300. This indicates that the bears are selling on relief rallies.
BNB/USDT daily chart. Source: TradingView
The price dipped back below the moving averages on Dec. 2 and the bears are trying to pull the BNB/USDT pair below $286. If they can pull it off, the pair could decline to $275 and thereafter to the strong support at $258.
On the contrary, if the price turns up from the current level and breaks above $306, it will suggest that buyers are attempting a comeback. The pair could then attempt a rally to $338.
In the near term, the flattish moving averages and the RSI near the midpoint, indicate a range formation.
XRP (XRP) again failed to break above the overhead resistance of $0.41 on Nov. 30 and Dec. 1, indicating that the bears are vigorously defending the level.
XRP/USDT daily chart. Source: TradingView
The XRP/USDT pair has slipped below the 20-day EMA ($0.40) and the bears will now try to pull the price below $0.37. If they do that, the pair may extend its stay inside the large range between $0.30 and $0.41 for a few more days.
On the other hand, if the price turns up from the current level or $0.37, it will suggest buying on dips. The bulls will then try to propel the price above the 50-day SMA ($0.43) and start an up-move to $0.51.
Cardano (ADA) is consolidating in a downtrend. The bullish divergence on the RSI suggests that the selling pressure could be reducing and a recovery may be on the cards.
ADA/USDT daily chart. Source: TradingView
If the price climbs above the 20-day EMA ($0.32), the ADA/USDT pair could pick up momentum and attempt a rally to the downtrend line. The bears are likely to mount a strong defense at this level.
Contrary to this assumption, if the price turns down from the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on rallies. The pair could then again drop toward $0.29.
Dogecoin’s (DOGE) recovery is facing resistance near the 50% Fibonacci retracement level of $0.12. This suggests that bears are active at higher levels.
DOGE/USDT daily chart. Source: TradingView
The price has dipped to the breakout level of $0.09, which is an important level to watch out for. A strong bounce-off it will suggest that the bulls have flipped the level into support.
Buyers will then again try to drive the price above $0.11 and resume the recovery. If they succeed, the DOGE/USDT pair could rise to the 61.8% retracement level of $0.13.
Conversely, if the price breaks below $0.09, it will suggest that the recovery may be over. The pair could then decline to the moving averages and later to $0.07.
Polygon (MATIC) surged above the moving averages on Nov. 30, suggesting that bulls are making a comeback. The price turned down on Dec. 1 but the bulls are attempting to flip the 20-day EMA ($0.89) into support.
MATIC/USDT daily chart. Source: TradingView
If buyers thrust the price above $0.97, the recovery could pick up pace and the MATIC/USDT pair could rally to the overhead resistance at $1.05. This level may act as a stumbling block but if bulls push the price above it, the pair could make a dash toward $1.30.
Instead, if the price turns down from $0.97, the bears will make another attempt to drag the pair below the moving averages. If that happens, the pair could retest the support at the uptrend line.
Polkadot (DOT) is attempting a recovery in a downtrend. After hesitating near the 20-day EMA ($5.53) for two days, buyers pushed the price above the resistance on Dec. 2.
DOT/USDT daily chart. Source: TradingView
The DOT/USDT pair could rise to the 50-day SMA ($5.96), which may act as a minor obstacle but it is likely to be crossed. The pair could thereafter extend the relief rally to the downtrend line. A break and close above this resistance could signal a potential trend change.
The bears had halted two previous recovery attempts at the downtrend line, hence they may again try to defend the level. If bears want to regain control, they will have to pull the price back below the 20-day EMA and break the support at $5. The pair could then plummet to $4.32.
Litecoin (LTC) has been trading above the breakout level of $75 but the bulls are facing stiff resistance in the zone between $80 and $84. This suggests that the bears have not yet given up.
LTC/USDT daily chart. Source: TradingView
Although the upsloping moving averages indicate advantage to buyers, the RSI is forming a bearish divergence. This indicates that the positive momentum could be weakening. The LTC/USDT pair may remain stuck between the 20-day EMA and $84 for a while.
A consolidation near the overhead resistance is usually a positive sign as it suggests that buyers are not hurrying to book profits. If bulls propel the price above $84, a new uptrend could begin and the pair may rally to $104.
Alternatively, if the price turns down and breaks below $70, the pair could start a decline to the 50-day SMA ($61).
Uniswap (UNI) broke above the 20-day EMA ($5.74) on Nov. 30. This is the first indication that the bears may be losing their grip. Buyers will try to strengthen their position by kicking the price above the 50-day SMA ($6.17).
UNI/USDT daily chart. Source: TradingView
If they manage to do that, the UNI/USDT pair could rally to the resistance line. The bears are expected to defend this level with all their might because if they fail in their endeavor, it will suggest that the symmetrical triangle may have acted as a reversal pattern. The pair could then start a new up-move to $8 and then to $10.
This positive view could invalidate in the near term if the price turns down and breaks below the 20-day EMA. The pair could then retest the support line of the symmetrical triangle.
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