The Daily Cryptomenon
22nd December 2020
Your daily Cryptocurrency Market Analysis News brought to you by the CryptoAltum Cryptomenon Team.
For todays important economic announcements, visit our Economic Calendar.
This analysis was written at 9:00 am GMT +3, on 22.12.2020
Yesterday we highlighted how the resistance levels in the Cryptocurrency market are being tested, and asked the question whether or not the momentum that brought these instruments to these levels will be able to help again. Well, we got our answer as we saw the market dip towards their support levels showing that the market has become quite over extended and it was time for a correction or at the very least a consolidation.
With that said, let’s find how the Cryptocurrencies are doing on December 22nd, 2020.
Cryptocurrency Recap
Our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple - found themselves under some intense bearish pressure after they attempted to break above some important resistances, however failed to do so. The result was a test of supports and in other cases breaking of some. The market seemed to have had enough of the bullish momentum that has been dominating the atmosphere, and as suggested previously, the time has come for either a correction lower or a consolidation as the market comes to grips with what is needed.
Bitcoin had attempted to break above the $24,300 resistance level twice in the past two weeks, and both ended up failing. This time around, the failure to break above said resistance caused the instrument to backtrack toward the $22,450 support level. It even dipped below that level briefly before the Bulls stepped in to keep things in check. Currently the Cryptocurrency is trying to find some decent support for another push higher.
Ethereum suffered a much heavier blow to its positive momentum than Bitcoin did. The second largest Cryptocurrency fell below the 100-Simple Moving Average on the 2-hour Chart, settling below it as the momentum clearly shifts from bullish to bearish. The $600 support level is currently keeping things in check as the instrument consolidates its losses around there. With the Bollinger Bands expanding, that gives the feeling of an increase in volatility, so best keep an eye out for another push downwards.
Ripple took the heaviest blow of them all, and it’s not necessarily Technical in nature, but it’s rather Fundamental. The news that is currently circulating the wires is that the U.S. SEC (Securities and Exchange Commission) is filing a lawsuit against Ripple. The reason behind it securities violation, the effect was heavy as the token fell nearly 18%.
Bitcoin’s (check out the chart below; you’ll find that Bitcoin is the purple line) performance is printing at 22.35% on a month-to-month basis*. Ethereum’s (red line) performance is printing at 9.66% on a month-to-month basis. Ripple’s (turquoise line) performance is printing at 3.85% on a month-to-month basis.
*Please note that we mention month/on/month we mean the same day, one month ago. For example, 1st November till the 1st December.
What’s the strategy you’re going to use when it
comes to these cryptos? Has the market shifted Momentum? Or is this a consolidation for more upside movements?
Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Correcting Lower
After yet another failure near $24,300, Bitcoin started a downside correction. BTC traded below the $23,500 and 23,200 support levels to move into a short-term bearish zone. The price even declined below $22,500 and settled below the 100 simple moving average. There also was a break below a major bullish trend line with support near $23,250.
Bitcoin managed to stabilize around the $22,000 and $22,200 levels. However, the Bulls struggled to surpass the $23,200 resistance level and the broken trend line. The 100 simple moving average is also acting as a strong resistance near $23,400. More importantly, there’s a connecting bearish trend line forming with resistance near $23,400.
If Bitcoin fails to surpass the 100 SMA and $23,500, it could start another decline. An initial support on the downside is near the $22,500 level. The first key support is near the $22,200 level. The main support is forming near the $22,000 level, below which there’s a risk of a drop towards the $21,000 zone in the near term.
Current Market Sentiment:Neutral with Bearish Bias
Ethereum Stable Above $600
After another rejection near $670, Ethereum started a downward move similar to Bitcoin. ETH broke the $650 support level to start the current decline. There was a clear break below the $620 and $630 support levels. It opened the doors for more downsides below $610. Ether even spiked below the $600 support level and settled well below the 100 simple moving average. A low is formed near the $597 level and the price is currently consolidating losses.
The main resistance is now forming near the $630 zone and the 100 hourly simple moving average. A clear break above the $630 and $635 resistance levels is must to decrease the current bearish pressure. In the stated case, the price could easily recover towards the $650 and $660 levels.
If Ethereum struggles to surpass the $622 and $630 resistance levels, it could continue to move down. An initial support on the downside is near the $605 level. The first major support is near the $600 level. A close below the $600 and $595 support levels might open the doors for a larger decline towards the $580 and $575 levels in the near term.
Current Market Sentiment: Neutral with Bearish Bias.
SEC Sues Ripple
In the last 24-hours, Ripple’s XRP has tanked nearly 18% breaking crucial support levels and is now trading at $0.45 with a market cap of $20.90 levels. With this, XRP also dragged down its weekly losses to more than 7%. The Cryptocurrency has now corrected nearly 30% from its weekly high of $0.65.
The recent price drop came amid Monday’s market-wide correction, however, it has intensified further on news of the U.S. SEC planning to sue Ripple on charges of securities violations. Speaking to The Fortune publication, Ripple CEO Brad Garlinghouse said that the regulator is all set to slap a lawsuit on alleged charges of selling XRP as unregistered securities.
Interestingly, these developments come at a time when the not-so-crypto-friendly SEC Chairman Jay Clayton is set to step down in a few days. Also, it comes before the Joe Biden administration is to take charge. In the past, Ripple has been critical about the SEC for hindering innovation in the crypto space. The company had also shown willingness to shift based out of the U.S. to other crypto-friendly countries.
Current Market Sentiment: Bearish.
Got any unanswered questions related to trading cryptocurrencies?
No matter what your crypto-related question is, feel free to reach out to your CryptoAltum Account Manager or our outstanding Customer Care Team. Your personal and dedicated Account Manager is on hand ready to help you with any questions. If you don’t have a CryptoAltum trading account yet, get one here. You’ll get your very own Account Manager.
For more market updates go ahead and visit our Blog