The last week of 2021 is finally upon us. Will the crypto market rise into the new year or will it catch investors off guard? Is the year-end profit taking finished? Will certain whales try to shake the market when there’s little liquidity? All things to consider this week.
That being said, what we do know is that sentiment hasn’t moved much over the past week, as the market appears to be cautious, despite the market’s recent move higher with the Santa Claus rally. As of this writing, the Fear & Greed Index is sitting at 40 (out of 100), indicating fear. This time last week, the index measured 25, indicating extreme fear.
As we look forward to the new year, we should all not lose sight of the fact that…
THE INSTITUTIONS ARE COMING!
Or at least, that’s what we’ve all heard countless times. New allocations do tend to occur at the beginning of the year. However, institutions probably won’t be investing in memecoins. They will go after coins with utility that are cost-effective and won’t necessarily care so much about the degree of decentralization. That doesn’t mean that memecoins are going away though, as they have their share of influential advocates.
The Crypto King
Bitcoin (BTC) briefly fell under $50K over the weekend due to pressure from whale selling on Binance. The original crypto hasn’t really been that volatile since the last big drop in early December with BTC trading mostly range bound between $45K and $50K.
But that has changed, with BTC now trading above the psychologically important $50K level. Turning this level into solid support will be key, but traders should be wary of whales attempting to create a cascade. As of press time, BTC is trading at $51,700.
Price wise, BTC has support at the $45,500 area, at the 200D SMA at $47,569, the 20D EMA at $49,832, and at the key $50K level.
Resistance exists at $52K, at the 38.2% Fib at $52,314, and at the key $53K level which corresponds to the $1T market cap.
The Layer One Leader
Ethereum (ETH) appears to be testing the descending trend line from its December 1st high. The key area to watch is $4,050. If ETH closes above this area, a move higher could have legs. As of press time, ETH is trading at $4,097.
Support exists at the $3,800 area as well as at $4K. Resistance is present at $4,150.
The Former #3
Will Cardano (ADA) continue to rally higher to close out the year? After bouncing repeatedly off the $1.20 area over the past month, the bulls finally overtook the bears and pushed the price above the $1.50 area. If ADA can close above $1.50, this bullish trend could be validated.
On the fundamental side, there are many technical milestones that Charles Hoskinson recently laid out for the new year and multiples DEX’s preparing to come online. This is how successful networks develop.
On the other hand, less than 7% of ADA holders have held for more than one year, quite low. 70% of ADA’s holders have owned it for less than 12 months and the remainder appear to be active traders. And tellingly, the majority of ADA’s holders are out of the money indicating that once ADA hits their entry price, expect some sell walls. ADA has a lot going on and should be a fun crypto to trade. ADA is trading at $1.56 as of this post.
Other Coins to Watch
Shiba Inu (SHIB) has gained nicely over the past week, but will it continue?
On-chain indicators are turning bullish as active addresses have grown by 19% over the last week. Active addresses are key to increasing the value of a network. The current number of holders has also risen to 1,094,129 according to WhaleStats. Furthermore, 63% of addresses are currently “in-the-money” according to IntoTheBlock. More holders in profit is always a good sign. SHIB is trading at $0.00003913 as of press time with support at $0.000032 and resistance at $0.000040.
Will Polygon (MATIC) continue its price discovery? The scaling solution has been a standout over the past month. Interestingly, it hasn’t been correlated with Bitcoin at all over the past 30 days unlike most cryptos. According to IntoTheBlock, the monthly correlation is sitting at -0.26. Staying above the key $2.70 level will be key in keeping the bullish tilt. MATIC is trading at $2.76 as of this post.
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