S&P 500 Index: Weekly Gains and Bitcoin’s Short-Term Profit-Booking
Last week, the S&P 500 Index experienced a 2.49% increase, marking its seventh consecutive week of gains. On the other hand, Bitcoin faced profit-booking by the bulls and lost its momentum. However, analysts believe that a crash is unlikely as they expect the US Securities and Exchange Commission to approve Bitcoin exchange-traded fund applications in January, potentially changing the game for the sector.
VanEck CEO Jan van Eck predicts that Bitcoin will hit a new all-time high within the next year and become a companion to gold.
S&P 500 Index Price Analysis
The S&P 500 Index recently surpassed the overhead resistance of 4,650, indicating a strong bull move. However, with the relative strength index (RSI) deep in overbought territory, a correction or consolidation may occur soon. The support levels to watch are at 4,650 and the 20-day exponential moving average (4,601). If the price continues to rise above 4,740, it may reach the psychological level of 5,000.
US Dollar Index Price Analysis
The US Dollar Index struggled to stay above the 20-day EMA (103), leading to selling pressure and a drop below the Fibonacci retracement level of 102.55. The next major support is at 101. While there are early signs of a positive divergence in the RSI, indicating weakening selling pressure, a rebound above the 20-day EMA could result in a range-bound movement between 101 and 108.
Bitcoin Price Analysis
Bitcoin broke below its tight range between the 20-day EMA ($41,323) and the downtrend line. However, the lack of momentum suggests a range-bound action in the near term. If the price falls below $40,000, strong buying support is expected at $37,980. On the other hand, a climb above the 20-day EMA would indicate strong demand at lower levels and could lead to a rally towards $44,700.
Ether Price Analysis
Ether slipped below its support at $2,200, indicating a loss of bullish momentum. If the price remains below this level, it may drop to the 50-day SMA ($2,074), with a possibility of further decline to $1,900 if resistance is encountered at $2,200. However, a rise above $2,200 would suggest strong buying support and could push the price towards the overhead resistance at $2,332.
BNB Price Analysis
The failure to surpass $260 led to profit-booking in BNB. As the 20-day EMA turns down and the RSI slips below midpoint, bears are gaining control. A fall to $223 is likely if support is not strong enough. However, a rebound off this level and a rise above moving averages could result in an oscillation between $223 and $260.
XRP Price Analysis
XRP faced selling pressure after failing to move above moving averages. The bears may push the price towards strong support at $0.56. If there’s a rebound from this level and a rise above the 20-day EMA ($0.62), XRP may remain stuck between $0.73 and $0.56 for some time. A break below $0.56 could clear the path for further downside towards crucial support at $0.46.
Solana Price Analysis
Solana turned down from $79.50 and reached the 20-day EMA ($67.77). A break below this level could trigger a deeper decline towards the 50-day SMA ($57.83) and the psychological support at $50. To prevent further pullback, bulls need to defend the 20-day EMA and push the price above $80 for a potential rally to $100.
Cardano Price Analysis
Cardano briefly rose above $0.65 but faced a sharp pullback, indicating profit-booking by bulls. The ADA/USDT pair may consolidate recent gains and rise towards $0.68 if there’s a rebound from the 20-day EMA ($0.53). However, a break below the 20-day EMA could accelerate selling, leading to a fall to strong support at $0.46.
Avalanche Price Analysis
Avalanche broke above resistance at $42.50 but failed to sustain higher levels. A pullback towards the 20-day EMA ($33) is expected, but if there’s a strong rebound, it would suggest positive sentiment and buying on dips. On the upside, a break above $45 could signal a resumption of the uptrend, with the next target at $50. However, a drop below the 20-day EMA may indicate bearish sentiment and lead to a deeper correction to $25.
Dogecoin Price Analysis
Dogecoin rebounded off the 20-day EMA ($0.09), but failed to maintain higher levels. If the price remains below the 20-day EMA, bears will have an advantage and could push it towards the 50-day SMA ($0.08). To regain control, bulls need to push the price back above the 20-day EMA and clear the hurdle at $0.11.
Hot Take: Conclusion
The S&P 500 Index continued its winning streak, while Bitcoin faced profit-booking. The approval of Bitcoin exchange-traded funds in January could be a game-changer for the sector. Technical analysis suggests important support levels for Bitcoin and altcoins, indicating potential buying opportunities. However, a break below these levels could lead to further downside. Overall, the market remains unpredictable and subject to various factors.
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