The Daily Cryptomenon
3rd December 2020
Your daily Cryptocurrency Market Analysis News brought to you by the CryptoAltum Cryptomenon Team.
This analysis was written at 9:00 am GMT +3, on 03.12.2020
After some moves higher and lower during the past couple of days, the Cryptocurrency market seemed to have finally gone into some consolidation. Resistances on top are proving too tough for the market to break above, and the supports on the bottom are becoming extremely reliable for holding any kind of downturn and hence investors are looking to calm down a bit before deciding on which trajectory the market will take.
With that said, let’s find how the Cryptocurrencies are doing on December 3rd, 2020.
Our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple - were stagnant and were consolidating gains as they seemed to be rather indecisive as to which way they want to go since either way there’s powerful levels to stop any kind of momentum before things get away.
Bitcoin has entered into a consolidation zone between the $19,500 and $18,400. These two levels are the resistance and support levels respectively as the market seems to be focusing on which one will be the weaker level and target that. Usually consolidation is very boring in the Cryptocurrency Market and there isn’t much happening other than that.
The same words are about to repeat themselves, as Ethereum also finds itself stuck in a consolidation zone between the $620 as a resistance level and $575 as a support level. The technical indicators are also pointing to the same formation as the RSI (Relative Strength Index) is not going anywhere fast printing around the 50 level.
Ripple is following Bitcoin and Ethereum’s lead, despite it remaining the best performing Cryptocurrency out of three. The consolidation that has hit the Cryptocurrency has it stuck between the $0.6800 and the $0.5700, as the 100-SMA on the 2-hour chart acts as a very strong inflection point for the instrument.
Bitcoin’s (check out the chart below; you’ll find that Bitcoin is the purple line) performance is printing at 41.71% on a month-to-month basis*. Ethereum’s (red line) performance is printing at 57.85% on a month-to-month basis. Ripple’s (turquoise line) performance is printing at 169.81% 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? Will consolidation remain the main contributor for the market in the short-term? Or will the market decide on a movement and stick to it?
Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin to Take on $19,300 for Fresh Rally
Yesterday, we discussed the importance of the 100-SMA and $18,800 for Bitcoin, and how it was looking at that level for much needed support. Well, BTC did find that strong support near the mentioned Moving Average and there was no downside break below the $18,500 support. The price seems to be trading in a broad range above the $18,500 and $18,800 support. The last swing low was formed near $18,117 before the price climbed above the 50% Fib retracement level of the key downward move from the $19,957 swing high to $18,117 swing low.
The price is now facing a major resistance near $19,300, which is a very important level since it has stopped the Cryptocurrency from continuing higher. It seems like there’s a major contracting triangle forming with resistance near $19,300. Therefore, a close above the triangle resistance and $19,320 could open the doors for a larger increase. The next key resistance is near the $19,500, above which Bitcoin might test the $20,000 zone.
If Bitcoin fails to clear the $19,300 resistance level, there’s a risk of a downside break. An initial support is near the triangle lower trend line at $18,800, and a break below that level could push the price towards $18,500. Any more losses may possibly spark a sharp decline towards the $18,000 level.
The $600 Holds Key for Ethereum
After a downside reaction, Ethereum started a recovery wave above the $580 level. ETH price also remained stable at the $585 level, as the price is currently stuck in a range below $600 and it seems to be preparing for the next move. The last swing low was formed near the $565 level before the price recovered above the 23.6% Fib retracement level of the key downward move from the $636 high to $565 low.
Ether is currently approaching the $600 barrier and is trading above the 100-SMA on the 2-hour chart. There’s also a key contracting triangle forming with resistance near $600 on the hourly chart of ETH/USD. A successful close above the $600 and $602 resistance levels could open the doors for a sharp increase. The next key resistance is at $610, above which the price may even clear $620. Any more gains will most likely call for a new yearly high above $636.
If Ethereum fails to clear the triangle resistance and $602, there’s a risk of a fresh decline. An initial support is near the $590 level and the triangle lower trend line. A downside break below the triangle support might push the price towards the $585 support. Any more losses may possibly set the pace for a fresh decline towards the $565 swing low in the coming sessions. An intermediate support sits near the $570 level.
Ripple Consolidates with Bullish Momentum Building
XRP/USD is trading just below the $0.6200 in the wake of a recent rejection from levels very close to $0.7. The Bollinger Bands' middle boundary has limited its immediate upside. To confirm a breakout to the upside, Ripple must close the day above the middle layer.
Moreover, the constriction of the Bollinger Bands suggests that XRP has settled for consolidation. However, the squeeze points towards a probable breakout. Therefore, Ripple Bulls should defend the support at $0.6 as if their lives depended on it. The ongoing consolidation has also been validated by the leveling Relative Strength Index currently at the midline. For now, sideways trading action may take precedence until a breakout comes into the picture.
It’s worth mentioning that trading under the support at $0.6 might call for more sell orders. If the selling activities create enough volume, there’s a chance of Ripple falling to the next critical level, as shown by the 100 SMA. Extended bearish price action could seek refuge at the 200 SMA as well as last week's support at $0.45.
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