As the final week before Christmas comes to a close, the cryptocurrency market closes out a well needed ‘Santa Rally’ to the envy of the traditional markets, we take a closer look at what happened with the top cryptos and if an end is in sight to the twelve-month bear market.
Christmas Santa Rally for Crypto
The total cryptocurrency market cap managed to find support around the $100bn valuation level last week and rallied hard to close up around 30% at $130bn with a large bullish engulfing candle and a noticeable uptick in volume. A move of such positive magnitude has not been seen since the first week of April 2018 and it certainly feels a like long time in the cryptocurrency world.
Moving into the early hours of Monday morning, the market did not let up steam and pushed ahead with another 10% towards $143bn. While this goes some way towards signaling that buyers are returning to the market and that demand at these prices may outweigh supply, there is a significant amount of work to be done before we can say with conviction that this market – which has suffered staggering losses of $650bn (87%) – has bottomed.
Christmas Eve gains across the board
Each of the top cryptocurrencies saw significant gains, with XRP [coin_price coin=ripple] being the biggest mover over 20%. Notable gains were seen across the board, with six of the top ten coins making double-digit gains and tether falling as people ditched the USD equivalent for the soaring cryptocurrencies.
Bitcoin Daily Chart
After finding its legs just north of $3k, the market leader, Bitcoin, has found some resistance around the 23.6% retracement level at $4k. But it convincingly broke out of this overnight and is now eyeing $4.4k, which is where significant resistance was previously found after a bounce following the initial test of the mid $3ks.
This has a high probability of proving to be a significant level of resistance with a backtest of $4k, which must now turn from previous resistance to support.
For this market to show real signs of interim bullishness, however, Bitcoin price really needs to see a convincing attempt to break $4.5k on the first try. Should BTC be able to consolidate around this level, the bulls will be eyeing just north of $5.2k at the 61.8% retracement of the fall from $6.5k where there will be significant profit taking and short interest.
While Bitcoin and many of the other cryptos have has managed to provide some relief for investors and savvy dip buyers, this market has a lot of work to do to become bullish.
The high probability is that Bitcoin will struggle to retake the $6k and will need to spend some time holding and building a base above $3k. There is also still a week to go for some investors to crystallize losses and recognize them on their tax returns, which may still have a downward effect on the market.
So while the much needed ‘Santa rally’ has brought some Christmas cheer to the crypto markets, traders will be looking for signs of strength, with all of the coins needing to find higher highs and proving resistance at each of the key Fibonacci levels can turn to support with at the first time of asking.
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[Disclaimer: The views expressed in this article are the personal opinion of the author and do not reflect the views of Bitcoinist. The information in the article should not be taken as financial advice.]
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