Investors have faced a tumultuous year in 2022 as stocks, bonds, and the cryptocurrency sector have all witnessed sharp declines. As of Nov. 30, the performance of a traditional portfolio comprising 60% stocks and 40% bonds has been the worst since 1932, according to a report by Financial Times.
The next big question troubling crypto investors is whether the pain in Bitcoin (BTC) is over or will the downtrend continue in 2023.
Analysts seem to be divided in their opinion for the first quarter of the new year. While some expect a drop to $10,000 others anticipate a rally to $22,000.
While the near-term remains uncertain, research and trading firm Capriole Investments said in its latest edition of the Capriole Newsletter that Bitcoin could copy gold’s explosive bull move in the 1970s and if that happens, Bitcoin could soar past $600,000 over the next few years.
Could Bitcoin and altcoins start a recovery in the short term? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin slipped below the immediate support of $16,559 on Dec. 28. This indicated that the tight range had resolved in favor of the bears. The next support on the downside is $16,256.
The bears tried to pull the price below $16,256 on Dec. 30 but the long tail on the candlestick shows that the bulls are trying to protect the level. Buyers may face a strong resistance at the moving averages.
If the price turns down from the 20-day exponential moving average (EMA) of $16,820, the possibility of a break below $16,256 increases. The BTC/Tether (USDT) pair could then dive to the $16,000 and $15,476 support zones.
Conversely, if the price turns up from the current level and breaks above the moving averages, it will suggest strong buying at lower levels. That could trigger a rally to the $18,000 to $18,388 zone.
Ether (ETH) continues to trade between the support at $1,150 and the 20-day EMA of $1,218. This suggests that the sentiment remains negative and traders are selling on rallies.
The bears will try to pull the price to $1,150. This is an important support to watch out for in the near term because if it cracks, the ETH/USDT pair will complete a bearish head-and-shoulders pattern and may plunge to $1,075.
The bulls successfully defended this level on two previous occasions, hence they may try to do that again. If they can pull it off, the pair may extend its range-bound action between $1,075 and $1,352 for a few more days.
On the other hand, if bears sink the price below $1,075, the pair could fall to the psychologically critical level of $1,000 and later to the pattern target of $948.
BNB (BNB) continues to trade in a tight range near the overhead resistance zone between $250 and $255. This suggests that both the bulls and the bears are battling it out for supremacy.
Usually, such tight ranges are followed by a sharp pick-up in volatility but it is difficult to predict the direction of the breakout. Hence, it is better to wait for the breakout to happen before jumping in.
If buyers kick the price above $255, several short-term bears may get trapped. They may then hurry to close their positions, which could catapult the BNB/USDT pair to the 50-day simple moving average (SMA) of $272.
Contrarily, if the price turns down and slips below $236, the pair may drop to $220. This level may act as a minor support but if it gives way, the pair could nosedive to $200.
XRP (XRP) bounced off the support line of the symmetrical triangle on Dec. 29 but the bulls could not start a recovery. The bears maintained their grip and again pulled the price to the support line on Dec. 30.
Both moving averages are sloping down and the relative strength index (RSI) is below 39, indicating that the path of least resistance is to the downside. If the price drops below the support line, it will indicate that the bears have overpowered the bulls. The XRP/USDT pair could then retest the June low near $0.29.
Alternatively, if the price rebounds off the current level, the bulls will try to propel the pair above the 20-day EMA of $0.36. If they do that, the pair could ascend to the resistance line of the triangle.
There was a weak attempt from the bulls to defend the important support at $0.07 on Dec. 29. The bears kept up the selling pressure and pushed Dogecoin (DOGE) below the key support on Dec. 30.
A break and close below $0.07 will complete a descending triangle pattern, which is a huge negative. The DOGE/USDT pair could then continue its decline and retest the crucial support near $0.05. If this support collapses, the pair could start the next leg of the downtrend.
If bulls want to prevent the decline, they will have to quickly thrust the price back above the breakdown level at $0.07. That could trap the aggressive bears, resulting in a short squeeze. The pair could first rise to the 50-day SMA of $0.09 and thereafter climb to $0.11.
Cardano (ADA) tumbled below the support at $0.25 on Dec. 29, indicating that the downtrend remains in force. The fall has pulled the RSI into the oversold zone, suggesting that a relief rally or a consolidation is likely in the next few days.
Buyers have defended the support line of the falling wedge pattern on numerous occasions in the past few weeks and they may try to do that again. If the price bounces off the support line with strength, the bulls try to push the ADA/USDT pair above the 20-day EMA of $0.27. If they succeed, the pair could climb to the downtrend line.
Conversely, if the recovery off the support line is shallow, it will suggest a lack of demand from the bulls. The bears will then try to sink the price below the support line and pull the pair to $0.20.
Polygon (MATIC) remains stuck inside a large range between $0.69 and $1.05. The bears pulled the price below the immediate support of $0.75 on Dec. 30, opening the doors for a drop to $0.69.
In a range, traders usually buy at the support and sell near the resistance. Therefore, the fall to $0.69 may be bought aggressively. A strong rebound off this support will indicate that the MATIC/USDT pair may continue its range-bound action for a while longer.
Contrary to this assumption, a weak rebound off $0.69 could embolden the bears and enhance the prospects of a breakdown. If that happens, the pair could start a new down move that could reach $0.52.
If the bulls want to avoid the downtrend, they will have to quickly push the price above the moving averages.
Polkadot (DOT) remains in a firm bear grip. The bulls are trying to arrest the decline near $4.22 but have failed to achieve a meaningful bounce. This increases the likelihood of the resumption of the down move.
The next support on the downside is at $4 and then at $3.60. This zone had acted as a strong floor between September to November 2020, hence the bulls may again try to defend it with all their might.
On the upside, a rally above the 20-day EMA of $4.65 will be the first indication of strength. The DOT/USDT pair could then attempt a rally to the downtrend line. The bulls will have to overcome this barrier to signal a potential trend change.
Litecoin (LTC) fell below the moving averages on Dec. 27 and continued its pullback on Dec. 28. The price bounced off the lower levels on Dec. 29 and has reached the 20-day EMA of $68.
The bears will try to flip the moving averages into resistance. If they do that, the LTC/USDT pair could turn down and break below the immediate support at $65. That could start a decline to $61.
This is an important level to keep an eye on in the near term because if it fails to hold, the selling could accelerate and the pair could plunge to $56.
On the contrary, if buyers propel the price above the moving averages, the pair could climb to the overhead resistance at $75.
Uniswap (UNI) broke below the support line of the symmetrical triangle pattern on Dec. 28. This suggests that the uncertainty between the bulls and the bears has resolved in favor of the sellers.
The bulls tried to push the price back into the triangle on Dec. 29 but the bears held their ground. The downsloping moving averages and the RSI in the negative territory indicate that bears have the upper hand.
If the price dips below $4.97, the next stop could be $4.71 and then $4.60. This negative view could be invalidated in the near term if the UNI/USDT pair re-enters the triangle and breaks above the moving averages.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Market data is provided by HitBTC exchange.