In a recent Reddit “Ask Me Anything” session, billionaire Ray Dalio warned investors that the current astronomical pace of money printing is unlikely to stop in the near future and holding wealth in cash could lead to losses. Dalio said that Bitcoin (BTC) “could serve as a diversifier to gold and other such storehold of wealth assets.”
A new report from CoinShares shows that the transition from gold to crypto products may have already started. The report highlights outflows of $9.2 billion from gold investment products and inflows of $1.4 billion into crypto products during the same period. Interestingly, along with Bitcoin, Ethereum funds are also attracting investments.
While institutions are increasing their investments into the crypto space, Galaxy Digital founder and CEO Mike Novogratz recently told CNN that people should invest about 5% of their net worth in Bitcoin and some in Ether (ETH). Novogratz did not rule out a 30-40% correction but asserted that Bitcoin will not go to zero.
On similar lines, the Winklevoss twins advised participants at the Singapore Fintech Festival to educate themselves about Bitcoin because they believe Bitcoin’s price will reach $500,000 in the future.
While the long-term picture looks bullish, smaller-sized traders may find it difficult to HODL in the event of a sharp fall like the one seen in the last 24-hours.
Let’s analyze the charts of the top-10 cryptocurrencies in order to spot the critical levels to keep an eye on.
Bitcoin (BTC) once again failed to rise above the $19,500 resistance on Dec. 6 and 7. This may have attracted profit booking from short-term traders and the downside move also pulled the price below the 20-day exponential moving average $18,314.
However, the fall did not create panic among traders and the bulls continue to purchase the BTC/USD pair on dips. This is a positive sign as it shows that the sentiment remains bullish. The bulls will now try to push the price to the $19,500 resistance.
If the price fails to sustain above the 20-day EMA or rise above the $19,500 resistance, then another round of selling is likely. If the bears sink the price below $17,650, the pair could drop to the 50-day simple moving average at $16,314.
The flat 20-day EMA and the relative strength index (RSI) just above the midpoint suggest a few days of range-bound action.
A break below $16,191.02 will signal that bears have the upper hand, while a break above $19,500 will tilt the advantage in favor of the bulls. Until then, the pair may remain volatile between the two levels.
Ether (ETH) broke below the trendline of the ascending triangle pattern and the 20-day EMA ($559) on Dec. 8. This move invalidates the bullish setup, but the positive thing is that the bulls have purchased the dip and pushed the price back above the 20-day EMA.
If the bulls can sustain the demand at higher levels, then the ETH/USD pair could again rally to the $622.807 to $635.456 resistance zone.
On the contrary, the trendline may now act as a resistance. If the price turns down from this resistance, the bears will try to sink the pair below $530.487. If they succeed, the pair could drop to $488.134.
While these are the bullish and bearish possibilities, the flat 20-day EMA and the RSI above 54 do not indicate an advantage either to the bulls or the bears. Therefore, the possibility of a few days of range-bound action is high.
Although the bulls pushed XRP above the downtrend line on Dec. 6, the demand dried up at higher levels. This pulled the price back below the downtrend line on Dec. 8 and the 20-day EMA ($0.543) today.
The bulls purchased the dip to the $0.50 support today and are currently attempting to sustain the price above the 20-day EMA. If they succeed, the XRP/USD pair could remain range-bound for a few days.
The flat 20-day EMA and the RSI just above the midpoint suggest a balance between supply and demand. A break above $0.6794 will tilt the advantage in favor of the bulls and a break below $0.50 will signal that bears have the upper hand.
The Dec. 7 Doji candlestick pattern showed indecision among the bulls and the bears about the next move. That uncertainty was resolved to the downside when Litecoin (LTC) turned down and broke below the 20-day EMA ($79) on Dec. 8.
The LTC/USD pair dropped to $71.9801 today, but the long tail on the candlestick shows strong buying at lower levels. The flattish 20-day EMA and the RSI near the midpoint suggests a balance between supply and demand.
This could keep the pair range-bound between $68.9008 and $84.3374 for a few days. A break below the $68.9009 to $64 support zone will tilt the advantage in favor of the bears while a break above $84.3374 will indicate that the bulls are back in the game.
After staying above the $280 levels for the past few days, Bitcoin Cash (BCH) plunged below it and the 50-day SMA ($271) on Dec. 8. The 20-day EMA ($281) has started to turn down and the RSI has dipped into the negative zone, which suggests that bears have the upper hand.
The current rebound is likely to face stiff resistance at $280. If the price turns down from this resistance, the BCH/USD pair could consolidate between $231 and $280 for a few days.
Contrary to this assumption, if the bulls can push the price above $280, it will suggest accumulation at lower levels and that could result in an up-move to $300. If the bulls can sustain the price above this level, the momentum could pick up.
Chainlink (LINK) turned down from the downtrend line on Dec. 7 and broke below the 50-day SMA ($12.67) on Dec. 8. The bulls are currently attempting to defend the ascending trendline.
The bulls are likely to again face stiff resistance at the downtrend line. If the price turns down from this resistance, then a drop to $10 will be on the cards. Such a move will tilt the advantage in favor of the bears.
The 20-day EMA ($13.17) has started to turn down and the RSI has slipped into the negative territory, which suggests that bears have the upper hand.
This negative view will be invalidated if the LINK/USD pair breaks above the downtrend line and the $13.28 overhead resistance.
Polkadot (DOT) broke below the 20-day EMA ($5) on Dec. 7 and the selling intensified on Dec. 8, which pulled the price down to the 50-day SMA ($4.7). The bulls purchased the dip to the 50-day SMA and are currently attempting to push the price back above the 20-day EMA.
However, the bears are unlikely to give up their advantage easily. They will try to defend the 20-day EMA and the downtrend line. If the price turns down from either resistance, it will increase the possibility of a break below the 50-day SMA.
If that happens, the DOT/USD pair could drop to the $3.80 to $3.5321 support zone. The bulls are likely to buy a dip to this support and that could keep the DOT/USD pair range-bound for a few days.
Contrary to this assumption, if the bulls can push the price above the downtrend line, the pair will make one more attempt to rise above the $5.5899 resistance.
The failure of the bulls to sustain the price above the $0.155 level attracted selling and Cardano (ADA) plummeted below the 20-day EMA ($0.146) on Dec. 8. However, a minor positive is that the price has rebounded off the 61.8% Fibonacci retracement level at $0.1312.
The relief rally will now face resistance at the 20-day EMA and again at $0.155. If the price turns down from either level, the bears will attempt to sink the price below $0.13 and the 50-day SMA ($0.122).
Another possibility is that the ADA/USD pair remains stuck between $0.13 and $0.155 for a few days. The flat 20-day EMA and the RSI near the midpoint also suggest a few days of range-bound action.
Binance Coin (BNB) broke below the 50-day SMA ($29.21) and plunged to $26.9244 today. The altcoin is currently attempting a rebound, which is likely to face resistance at the moving averages.
If the price turns down from the current levels or the moving averages, the bears will try to sink the BNB/USD pair below the $25.6652 support. If they succeed, the pair could drop to $22 and then to $18.
However, if the price breaks above the moving averages or if the bulls defend the $25.6652 support, the pair may extend its stay inside the range for a few more days.
Stellar Lumens (XLM) turned down from close to the downtrend line on Dec. 7 and plunged below the 20-day EMA ($0.158) on Dec. 8. However, today’s sharp rebound off the 61.8% Fibonacci retracement level at $0.140209 shows buying on dips.
The current rally is again likely to face resistance at the downtrend line. If the bulls can push the price above the downtrend line, it will suggest that the correction is over.
The XLM/USD pair may then rise to $0.18 and then to $0.19 and then consolidate in a range for a few days before attempting to resume the uptrend.
Contrary to this assumption, if the price turns down from the downtrend line and plummets below $0.139, the pair could drop to the 50-day SMA at $0.115.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.