Bitcoin (BTCUSD) (3-day/8-hour comparison)
The recent steady uptrend on Bitcoin has put the market into fertile trading conditions, but the euphoria and celebration we see on social media seem a bit unjustified.
With today’s push-up giving us another rejection at the short zone optimal entry and a double top on our 8hr chart, things could get ugly rather quickly for bulls.
Even if we continue to grind upwards, a brutal rejection could be on the table anywhere in the $53k-$56k range. A high time frame candle close above $58k is about the best-case scenario for bulls, while anything below that leaves room for a drop to the $38k-$40k price point.
Ethereum (ETHUSD) (3-day/8-hour comparison)
Ethereum has failed to do much of anything for bulls or bears since our big drop earlier in the month. A bit of indecision in the markets, and the typical end-of-year slow down in volatility could be to blame.
When looking at the 3D chart, we still maintain a bullish market structure, consolidating above key levels, but when zooming in on the 8hr chart, we see some bearish signs for the short term.
The inability to break out, and dribbling just above our orange “neutral” support level is a sign of weakness, and if we see price fall below $3900, a drop towards $3200 seems probable. For bulls, we would like to see a clean break above $4400 and that should send ETH to a new ATH quickly thereafter.
Fundamentals & Correlations (Weekly)
BTC dominance (BTC.D) is now dribbling along support, below 40%, which should give altcoin traders some warning signs as this could quickly reverse.
The US Dollar Index (DXY) has broken through a long held diagonal resistance we’ve been watching, and now is beginning to form a flag type structure just under some resistance levels. This should give all traders a moment of pause, because if this resistance level gets broken through, that would mean the $USD could go on a bit of a run north, bringing all assets down in their $USD valuations.