SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX

Bitcoin (BTC) closed last week with gains of 9.55%, but started the new week on a weak note, falling near $40,500. The sharp correction in Bitcoin also caused liquidations in several altcoins. According to CoinGlass data, cross-crypto long liquidations for Dec. 11 were more than $300 million.

The sharp fall does not change the trend in Bitcoin and altcoins, as corrections are a part and parcel of any uptrend. Generally, vertical rallies are followed by sharp pullbacks, which shake out the weaker hands and allow long-term investors to buy more at lower levels.

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 to start cutting rates in the third quarter of 2024.

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

S&P 500 Index price analysis

The bulls have successfully held the S&P 500 Index (SPX) above the breakout level of 4,541 for the past 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 pick up momentum and surge to 4,800.

This bullish view will be invalidated in the near term 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 price analysis

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

The relief rally has reached the 20-day EMA (104), where the bears are mounting a stiff defense. A minor positive in favor 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 price analysis

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

A minor positive in favor 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.

Ether price analysis

Ether (ETH) turned down from $2,403 on Dec. 9 and plunged below the breakout level of $2,200 on Dec. 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 trying to vigorously 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 (BNB) witnessed an outside-day candlestick pattern on Dec. 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 is likely to pick up momentum and soar to $265. This level may prove to be a difficult hurdle to cross, but if the buyers succeed, the pair will complete a bullish inverse head-and-shoulders pattern.

The trend will turn in favor of 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 (XRP) rose above the $0.67 resistance on Dec. 8, but the bulls could not build upon this breakout on Dec. 9. This suggests selling at higher levels.

The bulls again tried to drive the price above $0.67 on Dec. 10, but the bears held their ground. This started a sharp pullback, which dipped below the 50-day SMA ($0.62) on Dec. 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 defense.

Solana price analysis

Solana (SOL) is facing selling at the overhead hurdle of $78. The failure to scale this level may have started the pullback on Dec. 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.

If bears want to prevent the rally, they will have to drag the price below the 20-day EMA. That may start a deeper correction toward the crucial support at $51.

Related: Is the Bitcoin price dip toward $40K a bear trap?

Cardano price analysis

Buyers pushed Cardano (ADA) above the overhead resistance of $0.60 on Dec. 9 and 10, but they 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 Dec. 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 at $0.65. On the other hand, a break below $0.51 could sink the pair to the 20-day EMA ($0.45).

Dogecoin price analysis

The bears are posing a strong challenge to Dogecoin’s (DOGE) rally at $0.11, as seen from the long wick on the Dec. 11 candlestick.

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

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

Avalanche price analysis

Avalanche (AVAX) has been in a strong uptrend for the past several days. Buyers easily cleared the barrier at $31 on Dec. 9 and reached $38 on Dec. 10.

The vertical rally pushed the RSI deep into the overbought territory, signaling that a correction or consolidation is possible in the near term. The price pulled back on Dec. 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).

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.