December turns out to be another blockbuster month for Bitcoin as the flow of institutional investors injecting money into Bitcoin continues to increase.
Business intelligence company MicroStrategy announced it had closed down $ 650 million of convertible bonds at a rate of 0.75% due 2025. The company now plans to invest the net proceeds in Bitcoin after identifying its “working capital needs and other general corporate purposes.”
When institutional investors show such hunger to buy Bitcoin (BTC) near its highest point ever, it’s no surprise that the corrections were superficial.
Tyler Winklevoss said in a recent interview with CNBC that institutional investors are concerned about “impending inflation and the scourge of inflation with all the money being printed and the impetus from the COVID pandemic lockdowns”. That’s why they put money into Bitcoin.
Today the Bitcoin price has rallied again above the USD 19,000 level and it could challenge the USD 20,000 psychological resistance. If this level is broken out with conviction, it could create FOMO among retailers as many have not participated in the current rally.
If money also starts to pour in from private investors, Bitcoin can gain momentum and begin the next leg of the upward movement.
In addition to Bitcoin, there are a few altcoins that could participate in the upward move next week. Let’s take a look at the charts of the top 5 cryptocurrencies to discover the critical support and resistance levels to watch out for.
BTC / USD
Bitcoin closed below the 20-day exponential moving average ($ 18,435) on Dec. 10 and 11. However, the long tail on the December 11 candlestick shows that the bulls bought the dip rather than panic and dump their positions.
The price soared above the 20-day EMA on Dec. 12 and this may have trapped some aggressive bears who went short in recent days in anticipation of a sharp drop. This short cover and purchase by the bulls pushed the price above the declining channel today.
The price has again hit the USD 19,500 to USD 20,000 resistance zone. If the bulls can push price above this zone, the next leg of the uptrend can begin.
Conversely, if the price falls sharply again from current levels and plummets below USD 17,500, it could indicate that there is a short term high. Such a move could bring the price down to the next support at USD 16,191.02.
The 20-day EMA is starting to rise and the Relative Strength Index (RSI) has bounced off the 50 level, suggesting that bulls are predominant.
The 4-hour chart shows an ascending triangle formation, which will complete in a breakout and close above the overhead resistance zone. This setup has a target target of $ 23,576.
However, the bears are currently trying to slow the upward move near the USD 19,500 resistance. If the price falls below current levels, the bulls are likely to buy on every dip to the 20-EMA. A strong rebound from this support will improve the outlook for a breakout above USD 19,500.
This bullish view becomes invalid if the BTC / USD pair moves down from current levels and breaks below the triangle’s trend line.
A failure of a bullish setup traps several aggressive bulls and that can result in panic selling. When that happens, there could be a drop to $ 16,191.02 on the cards.
ETH / USD
Ether (ETH) has broken out of the downward channel, indicating benefit to the bulls. The price may now climb towards the $ 622,807 to $ 635,456 overhead resistance zone.
The RSI has rebounded from midpoint and broken out of the downtrend line, suggesting bulls have the upper hand.
If the bulls can push price above the resistance zone, the next leg of the uptrend can begin. While there may be some pit stops in between, the next goal is $ 800.
On the other hand, if the ETH / USD pair pushes off the overhead resistance but does not give much ground, it will be a positive sign and increase the chances of a breakout of the resistance zone.
This optimistic view becomes invalid if the price goes down from current levels and reenters the channel. Such a move would suggest that the current breakout was a bull trap.
The 4-hour chart shows an ascending triangle formation that will complete in a breakout and finish above $ 622,807. The moving averages on the verge of a bullish crossover and the RSI is in the positive area indicate that bulls have the upper hand.
This positive view becomes invalid if the price falls from current levels or the overhead resistance and breaks below the triangle. Such a move could result in a drop to $ 488,134.
XMR / USD
Monero (XMR) completed an inverted head and shoulders pattern on Dec. 7, but the bears quickly dragged the price back below the neckline on Dec. 9. However, the bulls bought back the dip to the 20-day EMA ($ 133) and pushed the price back above $ 135.50 on December 11. This suggests buying aggressively at lower levels.
The ascending moving averages and the RSI above 66 suggest benefit to the bulls. Bullish setup breakout target target is $ 167.
However, the bears may have other plans. They are likely to defend the psychological level at USD 150. If the price drops this resistance but bounces off the USD 135.50 support, it would suggest bulls are piling up at lower levels.
In contrast, if the price falls below the USD 135.50 support and the 50-day SMA (USD 124), it will suggest that the bears are back behind the wheel.
The 4-hour chart shows the formation of a bullish triangle pattern that ended in a breakout and finished above USD 142.50. However, the XMR / USD pair has not picked up momentum and the price is stuck in the $ 142.50 to $ 150 range.
If the bulls can push the price above USD 150, the uptrend could resume with the next target at USD 162.50. The ascending moving averages and the RSI in the positive zone suggest that the path of least resistance is upward.
XEM / USD
NEM (XEM) rose on Dec. 12 and the price hit the $ 0.27688 overhead resistance today. The bears are currently trying to slow the upward movement in this resistance.
However, if the bulls don’t give up much ground from current levels, it will suggest that traders are not in a hurry to profit. That could keep the price range tied near the overhead resistance.
The rising 20-day EMA ($ 0.209) and the overhead resistance RSI suggest the path of least resistance is upward. If the bulls can propel the price above USD 0.27688, the XEM / USD pair could rise as high as USD 0.3564607.
The bears aggressively defend the aboveground resistance. If the price bounces back from the 20 EMA, it raises the prospects of a $ 0.27688 breakout. The rising 20-EMA and the RSI in the positive zone suggest that bulls have the upper hand.
Contrary to this assumption, a decline in the trendline is possible if the price is below the moving averages. A break under this support will indicate that the bulls have lost their grip.
AAVE / USD
AAVE trades in an ascending channel. The price was cut from the $ 95 overhead resistance on Dec. 8, but the positive sign is that the bulls have bought the dip to the 20-day EMA ($ 77).
The RSI has bounced off the middle again and the 20-day EMA has started to appear. This suggests that the correction may be over and the bulls are back in control. The first positive goal is a $ 95 retest.
If the bulls can push the price above USD 95, the next leg of the upward move could begin. The USD 100 psychological level could act as a resistance, but if the bulls can drive the price through, the AAVE / USD pair could move towards the channel’s resistance line at USD 112.
This optimistic view becomes invalid if the price falls from current levels and plummets below the channel’s support line. Such a move suggests that the trend has turned in favor of the bears.
The price rose from USD 70,564, just above the bullish channel support line, but the bears are trying to slow the relief rally at USD 86.14.
If the bulls can push the price above this resistance, the pair could move up to USD 95. A break above USD 95 could start the next leg of the uptrend.
On the other hand, if the price drops from USD 86.14, the pair could form the right shoulder of a potentially inverted head and shoulders pattern. This view will be nullified if the price falls below the USD 70.50 support.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move carries risks, you should do your own research when making a decision.