Crypto outlook | correction in markets on the horizon?

Fundamental Data

The general negative sentiment around the Christmas time might weigh negatively on crypto markets. Especially millennial traders prefer to close their positions in order to realize profits around the festive season. The negative market sentiment in the equity sector could also be a reason, which causes cryptos to weaken further. The positive momentum in the Greenback might also help pushing markets to the downside. Despite the recent interest rate cut of the Fed the momentum of the Dollar does not change. In general rate cuts cause a currency to weaken and hence increase speculation in markets. This might, however, only happen mid of next year.

Technical Analysis:

BTC – Bitcoin is trading at USD 98.600. The price is currently facing some increased volatility. Last week, the market was not able to rise much but instead faced a sideways pattern. The daily chart shows, that the market lost some momentum and the psychological USD 100.000 level still remains a major resistance zone.

Bitcoin has tested the support area, which is being marked by the 50- moving average on the daily chart. Only a break of this zone might offer further downside momentum. However, in the past Bitcoin has often faced a major increase of volatility during the Christmas period. Traders might use the recent push to higher levels to deleverage and close their positions as profits had been accumulated. A potential correction would hence be healthy.

ETH – Ethereum is currently trading at USD 3,585,00. It seems that the recent attempt to break the major resistance zone at USD 4,000.00 has failed and that lower levels in the coming weeks ahead should be expected.

The weekly chart shows that the correction went down below the USD 3,200.00 last week indicating potential negative market sentiment ahead. It now looks that further setbacks should be expected, as the USD 3,600.00 support zone ahs been broken to the downside.

XRP – Currently trading at USD 2.2450. We continue to observe this market based on the monthly chart. We still have about one week of trading until this monthly candlestick will finally come to an end, yet the chance that the market will respect this technical resistance pattern might be high.

As the chart above shows, the trendlines might still be respected. Furthermore, the current period of profit taking after the huge run to higher levels might be another reason, which keeps causing prices to fall. Traders could just be interested to realize profits. Recent candlesticks patterns also show that a sharp correction followed after previous huge price increases.

SOL – Solana is currently trading at USD 184.00. Similarly to ETH the price keeps falling to lower levels as last week’s candlestick pattern shows a big move to lower levels. Should the USD 185.00 zone be sustainably broken, the market might slide to lower levels.

The next support zone would be at around the 50- moving average area, at about the USD 156.00 level. A break of this area might unleash a further slide. Vice versa the positive sentiment might only be resumed, should the market break the upside resistance at USD 260.00.

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