Crypto Frontline

BTCUSD (Coinbase)

Source: TradingView

On Saturday Bitcoin took a strong dive and reached sub-$43k levels for the first time since the end of September. Even though the price bounced from the lows and it’s now consolidating in a tight range during Sunday, the selloff is a major warning sign for buyers.

Things could get even worse but first, we think the area around $40-$41k would be key to watch. In case buyers will be unable to keep the price above it, then we expect BTC to continue lower towards the $30k area.

Although seasonality is positive for Bitcoin in December, there is little appetite for buying. It is not an isolated case as we see a more risk-defensive approach across all financial assets. If the bounce will continue, sellers could rejoin around $53k or the daily 20 EMA.

The RSI is near oversold conditions, but that does not mean there is no further scope for selling. Weekend activity might remain subdued but once liquidity improves on Monday, it is yet to be seen whether a strong bounce can occur.

ETHUSD (Kraken)

Source: TradingView

Similar to the BTC’s performance, Ether also took a strong dive but is showing greater resilience as the Saturday losses have been erased already. However, we’re seen brief bursts of selling in the past and each time after the bounce, sellers drove the price towards the lows.

As a result, we suspect the area of support to watch is located around $3,400-$3,100. On top of the current weekly low, that’s where the daily 200 SMA is also located. Back in July and September, buyers were incentivized to buy heavy around the orange line, which is a pattern that could repeat.

On the upside, resistance comes at $4,400 and $4,800, near the current all-time highs. Since ETH is not yet in a bear market (25% below the top), it has the potential to post solid gains, in case the market sentiment turns to be upside in the days ahead.

ADAUSD (Binance)

Source: TradingView

Cardano has been a major underperformer since the beginning of September. Even as the broad market was edging higher, ADA was weakening and now that the entire market is selling off, we see an acceleration of the bearish move.

The price is rapidly approaching the key support area around $1, which could be a “make it or break it” zone. If sellers break below that and buyers don’t show any interest to get in, the move might further accelerate towards 50 cents and even 38 cents over the longer run.

Keep in mind the structure is parabolic and we might see stronger selling over the upcoming days. So far, the market treats the daily 20 EMA as resistance so any change with that regard will be a sign of changing order flow.

Also, the price should break above the daily 200 SMA as well, so we’ll have greater confirmation for a resumption of the bullish trend. We remain bearish on Cardano until either of those changes will occur.