Crypto Technical Analysis Report | 01st-December-2023

Crypto prices today are displaying positive movements, signalling a shift in sentiment after a period of notable volatility. Investors are adopting a cautious approach, carefully evaluating the current economic landscape and other relevant factors. The digital asset space experienced a mixed sentiment throughout the week, influenced by regulatory challenges and other factors that have impacted investor confidence. The beginning of December has brought about renewed confidence among market participants, evident in the recent upswing in Crypto prices. This positive trend appears to be influenced, in part, by the market’s regained confidence following the release of recent U.S. PCE inflation data. 

On November 29th, Bitcoin (BTC) faced notable resistance at the $38,400 level, prompting a subsequent retracement to a critical support level at $37,500. This price movement appears to be influenced by a confluence of interconnected factors, including increased regulatory scrutiny, observed net outflows from Bitcoin miners, concentrated buying activity from institutional players, and the impact of macroeconomic indicators. These dynamics collectively contribute to the intricacies of the Crypto market, shaping the trajectory of BTC prices during this period.  The near-term projection indicates that Bitcoin may face challenges in surpassing the $38,000 threshold, particularly in the absence of immediate positive catalysts, at least until the spot ETF decision expected in early 2024. This difficulty is exacerbated by the stringent regulatory approach targeting major exchanges and the economic indicators affirming the Federal Reserve’s effective strategy. The confluence of these factors presents a scenario where Bitcoin encounters hurdles in achieving significant upward momentum in the short term.

In November, Ethereum exhibited impressive growth with a 13% increase, outpacing Bitcoin’s 8%. A significant catalyst for Ethereum’s growth was BlackRock’s official filing for a spot ETH ETF (Ethereum-based Exchange Traded Fund). While this played a crucial role in boosting Ethereum’s price during November, on-chain data now indicates that Ethereum’s price volatility has surpassed that of Bitcoin. As the media excitement surrounding ETFs begins to subside, this heightened volatility in Ethereum could attract swing traders and short-term day traders, potentially leading to increased investment in ETH compared to BTC in December. From an on-chain perspective, Ethereum’s price appears poised to maintain momentum, potentially outperforming Bitcoin for the second consecutive month. However, to validate this bullish prediction, Ethereum bulls face the challenge of breaking through the historically significant resistance level at $2,500. The ability to breach and sustain above this resistance level will be a crucial factor in determining Ethereum’s continued outperformance relative to Bitcoin in the coming month.

In the macro set-up,  the most recent U.S. Personal Consumption Expenditures data, showcasing a 3.5% year-over-year increase, suggests that the Federal Reserve’s measures to curb inflation may be yielding the intended results. While this is positive for the broader economy, it may reduce Bitcoin’s attractiveness as an inflation hedge. In contrast, Europe witnessed a eurozone inflation rate with a 2.4% year-on-year uptick in November, indicating a similar trend. Although this rate aligns more closely with the central bank’s 2% inflation target, it does not necessarily imply a reduction in prices but rather signals a more controlled economic trajectory. Therefore, this development is not inherently negative for Bitcoin’s price, as it reflects a measured approach to inflation rather than an uncontrolled surge.

Technical Outlook:

Bitcoin:

Bitcoin was taking multiple supports at the key level of $25,000 (Horizontal Trendline & 50% Fibonacci Retracement Level) and was trading in a range from $25,000 to $28,500. The asset finally gave a breakout above the range and surged up to $38,450 by forming a ‘Higher Higher Higher Low’ pattern. Currently, BTC is consolidating around $38,000. The asset has a strong resistance at $40,000, once it breaks, closes and sustains above the resistance then we may expect it to further rally up to $48,000, whereas $35,000 and $32,000 will act as strong support for the asset.

Ethereum:

ETH after taking multiple supports at the key level of $1,530 (78.6% Fibonacci Retracement Level) started moving up by forming a ‘Higher High Higher Low’ pattern. The asset broke the long-held resistance of $1,750 and rallied up to $2,136.9. However, the bulls failed to break the previous high of $2,146 and the prices corrected to $1,985. Currently, ETH is consolidating in a range between $2,000 to $2,100. The asset has a strong support zone from $1,950 to $1,900. If it holds and sustains above the support then we may expect the bulls to resume the up move. To further rally ETH needs to break, close and sustain above $2,150.

BNB:

BNB was trading in a range from $205 to $220 with low volumes. The asset finally gave a breakout above the resistance of $220 and rallied up to $271. However, it faced stiff resistance at higher levels witnessed a sharp correction failed to give a daily closing above the resistance of $255 and dropped to $222.5. BNB has a strong support at $220, If it sustains and holds above the support then we may expect the bulls to resume the up move.

Weekly Snapshot:

Market Updates:

• According to a Nov. 30th notice, the U.S. SEC has requested comments on a proposed rule change that could allow Fidelity to offer shares of its spot Ether ETF
• In a Nov. 30 announcement, MicroStrategy co-founder Michael Saylor said the company acquired Bitcoin for roughly $593.3 million — at a price of $36,785 per Bitcoin. As of Nov. 29th, MicroStrategy reported it held 174,530 BTC — worth roughly $6.6 billion at the time of publication.
• Bankrupt Crypto lending platform Celsius has started withdrawals for select users in a crucial development for the company and its clients amid financial instability and legal issues