The United States equities markets continued their strong performance last week. According to Bespoke, the S&P 500 Index (SPX) and the Nasdaq 100 have risen for nine consecutive weeks, the best performance in unison since 1985 when they had an 11-week win streak. In 2023, the SPX ended with more than 24% gains, indicating that bulls remain firmly in command.
In contrast, the U. S. dollar index (DXY) fell about 2% in 2023, its first yearly loss since 2020. Slowing inflation and the forecast of a 75 basis point rate cut by the Federal Reserve in 2024 have kept the dollar index under pressure.
Daily cryptocurrency market performance. Source: Coin360The increasing risk appetite of investors and a host of crypto-specific positives boosted Bitcoin (BTC) by 155% in 2023. In the near future, two events hold the key to continuing Bitcoin's rally. First will be the regulator’s ruling on the spot Bitcoin exchange-traded fund applications expected in the next few days, and the second will be Bitcoin’s halving in April.
Will Bitcoin and altcoins correct in the near term or resume their up move? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index remains in a strong uptrend but witnessed profit-booking at 4,793. Although the trend remains up, the relative strength index (RSI) is in the early stages of forming a negative divergence. This suggests weakening momentum.
SPX daily chart. Source: TradingViewThe bears will try to tug the price to the 20-day exponential moving average (4,690), which remains the key short-term level to watch out for. A strong bounce off the 20-day EMA will improve the prospects of a rally above 4,793. The index may then attempt a rally to the psychologically important level of 5,000.
Contrarily, if the price turns down and breaks below the 20-day EMA, it will suggest that the bulls are closing their positions in a hurry. That could start a pullback to 4,650 and then to the 50-day simple moving average (4,502).
U.S. dollar index price analysis
The U.S. dollar index has been trading inside a wide range between 101 and 108 for several months. The price reached the support on Dec. 27, where the buyers stepped in.
DXY daily chart. Source: TradingViewAny bounce from the current level is expected to face solid resistance at the 20-day EMA (102.26). If the price turns down from the 20-day EMA, it will indicate that the sentiment remains negative and traders are selling on rallies. That will increase the possibility of a break below 101. The index may then collapse to 99.57.
On the contrary, if buyers shove the price above the 20-day EMA, it will suggest that the selling pressure is reducing. The index may then rise to the 50-day SMA (103.88). Such a move will indicate that the range-bound action may continue for a while longer.
Bitcoin price analysis
Bitcoin has fallen to the support line of the ascending triangle pattern, an important level for the bulls to defend.
BTC/USDT daily chart. Source: TradingViewIf the price sustains above the 20-day EMA ($42,484), the BTC/USDT pair could climb to the overhead resistance at $44,700. This level may attract strong selling by the bears, but if the buyers prevail, the pair will complete a bullish ascending triangle pattern. This setup has a target objective of $49,178.
Conversely, if the price breaks below the triangle, it will invalidate the bullish view. The pair could then tumble to $40,000. This level may act as a strong support, but if broken, the decline may extend to $37,980.
Ether price analysis
Ether (ETH) turned down from $2,446 on Dec. 28 and re-entered the descending channel on Dec. 29. This suggests that the bears are active at higher levels.
ETH/USDT daily chart. Source: TradingViewA minor advantage in favor of the bulls is that they have not allowed the price to dip below the 20-day EMA ($2,270). However, the selling pressure may increase further if buyers do not push the price back above the channel within the next few days.
If the 20-day EMA cracks, the ETH/USDT pair could drop to the 50-day SMA ($2,177) and then to the support line of the channel near $2,000.
On the upside, a break and close above the channel will suggest that the bulls have not given up. Buyers will again try to propel the price above $2,446 and start the next leg of the uptrend toward $3,000.
BNB price analysis
BNB (BNB) is witnessing a correction in an uptrend. The bulls are trying to arrest the pullback in the zone between the 38.2% Fibonacci retracement level of $309 and the 50% retracement level of $300.
BNB/USDT daily chart. Source: TradingViewIf the price rebounds off the support zone, the bulls will try to resume the uptrend. The BNB/USDT pair may rise to $326, where the bulls are likely to encounter strong selling by the bears. If buyers bulldoze their way through the barrier, the pair could soar to $338 and eventually to $350.
Contrarily, if the price plunges below $300, the pair could weaken to the 61.8% Fibonacci retracement level of $291 and then to the neckline.
XRP price analysis
XRP (XRP) has been hovering near the moving averages for the past few days, indicating a lack of aggressive buying or selling.
XRP/USDT daily chart. Source: TradingViewThere is a minor support at $0.60. If the price rebounds off this level, the XRP/USDT pair may again try to rise above the downtrend line. If that happens, it will suggest that the selling pressure is reducing. The pair may then attempt a rally to $0.74.
Contrary to this assumption, if the price skids below $0.60, the pair could plummet to the vital support at $0.56. This level is likely to attract strong buying by the bulls because a break below it will complete a bearish descending triangle pattern. The pair may then dive to $0.46.
Solana price analysis
Solana (SOL) has been trading above the 50% Fibonacci retracement level of $96.68 for the past few days, but the bulls have failed to resume the uptrend.
SOL/USDT daily chart. Source: TradingViewThe first sign of strength will be a break and close above $110. That could open the doors for a retest of the high at $126. If this level is conquered, the SOL/USDT pair may pick up momentum and climb to $156.
The critical support to watch on the downside is the 20-day EMA ($95). If this level holds, the pair may swing between the 20-day EMA and $110 for a few days. A break and close below the 20-day EMA could indicate the start of a sharper pullback to the 50-day SMA ($74).
Related: Bitcoin ETF launch may be a ‘let down’ but could attract trillions over time
Cardano price analysis
Cardano (ADA) continues to trade inside the symmetrical triangle pattern, indicating indecision between the bulls and the bears.
ADA/USDT daily chart. Source: TradingViewAlthough the symmetrical triangle usually acts as a continuation pattern, it is difficult to predict the direction of the breakout with certainty. Hence, waiting for the breakout to happen is better before taking directional bets.
If the price turns up from the support line and rises above the triangle, it will indicate an advantage to buyers. The ADA/USDT pair may rise to $0.68 and subsequently to $0.80.
On the contrary, a slide below the triangle will indicate that bears are in control. That may start a fall to $0.51.
Avalanche price analysis
The bulls have been successfully defending the $38 support, but they have failed to sustain Avalanche (AVAX) above the 20-day EMA ($40)
AVAX/USDT daily chart. Source: TradingViewThe flattish 20-day EMA and the RSI just above the midpoint do not give a clear advantage either to the bulls or the bears. If the price rises above the 20-day EMA, the AVAX/USDT pair could rally to $45 and thereafter to the recent high at $50.
On the other hand, if the price turns down and breaks below $38, it will signal that bears are in the driver’s seat. That could intensify selling, and the pair may drop to $34 and later to the 50-day SMA ($31.13).
Dogecoin price analysis
Dogecoin’s (DOGE) tight range trading near the 20-day EMA ($0.09) resolved to the downside, and the price reached the 50-day SMA ($0.09) on Dec. 31.
DOGE/USDT daily chart. Source: TradingViewThe solid rebound off the 50-day SMA on Jan. 1 shows that the bulls are fiercely protecting the level. If buyers propel the price above the 20-day EMA, the DOGE/USDT pair could reach $0.10. The bears are likely to mount a strong defense of this level.
If the price turns down from the overhead resistance, the pair may remain stuck between $0.10 and the 50-day SMA for some more time. The bears will come out on top if they sink the pair below the 50-day SMA. That could start a downward move to $0.07.
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.
