Bitcoin and Ether Surge as Bulls Continue to Dominate
Bitcoin (BTC) and Ether (ETH) have both surpassed their respective resistance levels, indicating that the bullish trend is still strong. As prices continue to rise without a significant correction, traders are experiencing a fear of missing out. This could potentially lead to a blow-off top and a subsequent correction.
Institutional traders are showing significant interest in Bitcoin and Ether, with 35% of their assets held in Bitcoin, 15% in Ether, and 45% in stablecoins. This suggests that institutional investors still have enough firepower to buy their preferred cryptocurrency by selling stablecoins. Only 5% of their assets are held in other altcoins.
According to Matrixport research head Markus Thielen, previous crypto bear markets have been followed by three-year bull cycles. He predicts that 2023 will be the first year of the current bull cycle, with Bitcoin potentially reaching $60,000 by April and $125,000 by the end of 2024.
S&P 500 Index Analysis
The S&P 500 Index (SPX) has broken above its overhead resistance of 4,541 and has remained above it despite attempts by bears to push the price back below the breakout level. The next major resistance zone is between 4,607 and 4,650. If the price can hold above the breakout level, it will signal that the bulls have turned it into support and increase the chances of a rally above 4,650. On the other hand, a break below 4,541 could lead to a collapse towards the 50-day simple moving average at 4,364.
U.S. Dollar Index Analysis
The U.S. Dollar Index (DXY) is attempting to recover from the 61.8% Fibonacci retracement level of 102.55. However, the bulls are likely to face resistance at the 20-day exponential moving average (EMA) of 104.02. A sharp downturn from the 20-day EMA would suggest negative sentiment and selling on rallies. A break below 102.55 could accelerate the selling, potentially pushing the index to the strong support at 101. On the other hand, a break and close above the 20-day EMA would indicate the start of a relief rally towards 104.55 and the 50-day simple moving average at 105.41.
Bitcoin is currently in a strong uptrend, with bears failing to challenge the $40,000 level. The next target objective is $48,000, as there are no major resistance levels in between. While the sharp rally has pushed the RSI into the overbought zone, it’s worth noting that the RSI can remain in the overbought territory for an extended period of time during strong trends. To halt the rally, sellers would need to push the price below the 20-day EMA ($37,926) and potentially start a deeper correction.
Ether (ETH) continues to rise and has surpassed the $2,200 resistance level. If the price closes above this level, it will complete a bullish ascending triangle pattern. The upsloping 20-day EMA and the RSI near the overbought zone indicate that bulls are in control. The pattern target of the breakout is $3,400. However, bears may try to limit the rally at $2,500 and $3,000. A break and close below the breakout level of $2,200 would indicate weakness and potentially invalidate the breakout. Further weakness would be confirmed if the ETH/USDT pair falls below the 20-day EMA.
Bitcoin and Ether are showing strong bullish momentum as they surpass resistance levels. Institutional investors continue to hold significant assets in Bitcoin and Ether, indicating their confidence in the cryptocurrencies. The S&P 500 Index is facing resistance, and the U.S. Dollar Index is attempting a recovery. Traders should keep an eye on key levels and patterns to determine potential price movements.