Crypto Frontline

BTCUSD (Coinbase)

Traders are getting back from the extended holiday and the narrative seems to be the same, dominated by strong selling. BTC is down more than 5% on Monday on the back of worrying news related to Tether. More specifically, the S&P rating agency claims the company behind the stablecoin might not have enough liquid reserves to keep the peg at $1 if BTC and gold drop by more than 30%. 

Risk sentiment has deteriorated and the price is back below $90k. We still see strong support around $80k – $77k area, implying some more selling from the current price. The big question is whether we’ll get the usual Santa rally. 

Considering that selling is dominating, we don’t encourage our readers to buy right now. Things might improve in the second half of December when volatility drops and prices stabilize. Until then, expect the market to be driven by headlines. We’re trading below the daily 20 EMA and the bearish trend line, so the overall sentiment continues to be bearish. As things stand, we need a break above $93k to gain hope for a meaningful recovery this month. 

ETHUSD (Kraken)

On the same note, Ether is down more than 5% as well, suggesting market participants are dumping crypto across the board. Some headlines suggest more than $700 million in leveraged longs have been liquidated today, meaning this is the worst time to be looking to buy the market. 

The price action context remains favorable for sellers, considering the retest of the daily 20 EMA turned out to be an opportunity to sell the rip again. With ETH under pressure, we expect to see the market edging towards November lows. 

Our main area of support is $2,500 and things could accelerate if buyers don’t balance the order flow there. We’d turn slightly bullish on a break and close above $3,100. But even if that scenario, Ether has to break the bearish trend line and the daily 200 SMA to confirm it resumed the uptrend. 

ADAUSD (Binance)

Cardano is grinding lower towards the October 10th lows. Based on the price movement, we expect more selling into the 31 cents – 27 cents area. This isn’t a situation where exhausted selling leads to buyers accumulating. 

In fact, we see bulls unable to drive the order flow above the daily 20 EMA, suggesting selling continues to dominate this market. As long as this context remains in play, we give an edge to bears and wouldn’t be surprised if the price drops further below the October 10th low. That would put the 20 cents key psychological level to the test. 

To the upside, we see little reason to place longs right now. That’s not a good idea until we start to see a sustained move higher and a break above the daily 20 EMA. Other meaningful resistance levels to watch are 44 cents and 51 cents. Both are important swing points and can be of interest for sellers waiting for higher prices to get short.