Latest Market Overview 11th Dec: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX

The abrupt decline in the value of Bitcoin has taken many investors by surprise, prompting questions about the potential for further decreases in the future.

Bitcoin (BTC) concluded the previous week with a notable gain of 9.55%. However, the beginning of the new week saw a significant weakening as it dropped to nearly $40,500. This substantial downturn in Bitcoin’s value also led to liquidations in various alternative cryptocurrencies. Data from CoinGlass reveals that cross-crypto long liquidations on December 11 exceeded $300 million.

It’s important to note that this sharp decline should not be seen as a departure from the prevailing trend in both Bitcoin and alternative cryptocurrencies. Corrections like this are an expected part of any upward trend. Rapid surges in value are typically followed by significant pullbacks, which weed out less resilient investors and create opportunities for long-term investors to purchase assets at lower prices.

The corrections are unlikely to stretch 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. That will be followed by Bitcoin halving in April, and finally, expectations of a rate cut by the United States Federal Reserve could boost risky assets. Goldman Sachs anticipates the Fed will start cutting rates in the third quarter of 2024.

What critical levels could arrest the fall in Bitcoin and altcoins? Let’s’ analyze the charts to find out.

S&P 500 Index (SPX) price analysis

The bulls have held the S&P 500 Index above the breakout level of 4,541 for several days. This suggests that the buyers are trying to flip the level into support.

The upsloping 20-day exponential moving average (4,531) and the relative strength index (RSI) near the overbought zone indicate that the path of least resistance is to the upside. If buyers pierce the overhead resistance at 4,650, the index could increase momentum and surge to 4,800.

This bullish view will be invalidated soon if the price turns down and plunges below the 20-day EMA. That will indicate aggressive selling at higher levels. The index may then tumble to the 50-day simple moving average (4,393).

U.S. Dollar Index (DXY) price analysis

The U.S. Dollar Index bounced off the 61.8% Fibonacci retracement level of 102.55 on November 29, indicating buying at lower levels.

The relief rally has reached the 20-day EMA (104), where bears mount a stiff defence. A minor positive in favour of the bulls is that they have not allowed the price to dip much below the 20-day EMA.

There is a minor resistance at 104.50, but if this level is scaled, the index could rise to the 50-day SMA (105). The flattening 20-day EMA and the RSI near the midpoint suggest a range formation in the near term. The strong support on the downside is at 102.46.

Bitcoin (BTC) price analysis

Bitcoin’s’ tight consolidation near $44,700 resolved to the downside on December 11. The failure to resume the up-move may have attracted selling by the traders.

A minor positive in favour of the bulls is that the price rebounded off the 20-day EMA ($40,708), as seen from the long tail on the candlestick. Buyers will once again try to shove the BTC/USDT pair above $44,700, but the bears may not give up easily. The negative divergence on the RSI cautions that the bullish momentum is slowing down.

If the price skids below the 20-day EMA, the correction could deepen to the breakout level of $37,980. This level is likely to attract solid buying by the bulls. On the upside, a break and close above $44,700 will indicate that the bulls are back in the driver’s seat.

Ethereum (ETH) price analysis

Ethereum turned down from $2,403 on December 9 and plunged below the breakout level of $2,200 on December 11. This suggests that the bulls are rushing to the exit.

The price action of the past few days has formed a negative divergence on the RSI, indicating that the bullish momentum is weakening. Still, the bulls are vigorously trying to defend the 20-day EMA ($2,186).

If the price bounces off the current level, the bulls will again try to resume the uptrend by pushing the ETH/USDT pair above $2,403. If they do that, the pair could rally to $2,500 and later to $3,000.

This optimistic view will be invalidated if the price closes below the 20-day EMA. That may deepen the correction to the 50-day SMA ($2,012).

BNB price analysis

BNB witnessed an outside-day candlestick pattern on December 11, indicating a tough battle between the bulls and the bears.

The long tail on the day’s candlestick shows aggressive buying at lower levels. If the price maintains above $239.2, the BNB/USDT pair will likely pick up momentum and soar to $265. This level may be difficult to cross, but if the buyers succeed, the pair will complete a bullish inverse head-and-shoulders pattern.

The trend will favour the bears if they sink and sustain the price below $223. The pair may then slump to the pivotal support at $203.

XRP price analysis

XRP rose above the $0.67 resistance on December 8, but the bulls could not build upon this breakout on December 9. This suggests selling at higher levels.

The bulls again tried to drive the price above $0.67 on December 10, but the bears held their ground. This started a sharp pullback, which dipped below the 50-day SMA ($0.62) on December 11. If the price closes below the 50-day SMA, the XRP/USDT pair could drop to the crucial support at $0.56.

If the price rises from the current level, it will signal buying on dips. The bulls will then again try to overcome the obstacle at $0.67. If they do that, the pair may travel to $0.74, where the bears are expected to mount a strong defence.

Solana (SOL) price analysis

Solana is facing selling at the overhead hurdle of $78. The failure to scale this level may have started the pullback on December 11.

The SOL/USDT pair is finding support at the 20-day EMA ($63), indicating that lower levels continue to attract buyers. If bulls sustain the rebound, the pair could retest the high at $78. A break and close above this level could open the doors for a potential rally to the psychological level of $100.

Bears must drag the price below the 20-day EMA if they want to prevent the rally. That may start a deeper correction toward the crucial support at $51.

Cardano (ADA) price analysis

Buyers pushed Cardano above the overhead resistance of $0.60 on Dec. 9 and 10 but could not maintain the higher levels.

The up-move of the past few days propelled the RSI deep into the overbought zone, indicating that the rally was overextended in the near term. That may have tempted short-term bulls to book out on their positions, which started the pullback on December 11.

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

Dogecoin (DOGE) price analysis

The bears pose a solid challenge for Dogecoin’s rally at $0.11, as seen from the long wick on the December 11 candlestick.

The price can pull down to the 20-day EMA ($0.09), a necessary level to watch out for. A strong bounce off the 20-day EMA will suggest that the sentiment remains positive and traders buy the dips. That increases the possibility of a break above $0.11. The DOGE/USDT pair may jump to $0.15 if that happens.

On the contrary, a drop below the 20-day EMA will suggest that traders are aggressively booking profits. The pair may extend the decline to the 50-day SMA ($0.08).

Avalanche (AVAX) price analysis

Avalanche has been in a strong uptrend for the past several days. Buyers quickly cleared the barrier at $31 on December 9 and reached $38 on December 10.

The vertical rally pushed the RSI deep into the overbought territory, signalling that a correction or consolidation is possible soon. The price pulled back on December 11, indicating that the short-term traders may be booking profits.

If buyers do not allow the price to slip below $31, it will increase the likelihood of a rally above $38. The AVAX/USDT pair could climb to $46 and later to $50. Instead, if the price turns down and plummets below $31, it will suggest the start of a deeper correction to the 20-day EMA ($25.85).