Price analysis 12/28: BTC, ETH, XRP, LTC, BCH, DOT, ADA, BNB, LINK, XLM

Several central banks have resorted to unprecedented monetary expansion and aggressive rate cuts to support their respective economies badgered by the coronavirus pandemic. Record liquidity has resulted in sharp rallies in the S&P 500, gold, and Bitcoin (BTC), which suggests that investors are plowing money into assets of their choice.

While gold is way below its all-time high set in August, both the S&P 500 and Bitcoin are near their all-time high.

The last five trading days of the year and the first two of the next year have historically been bullish for the S&P 500, dubbed as the “Santa Rally.” It will be interesting to see whether Bitcoin continues its Santa rally into 2021 with the arrival of institutional investors.

Daily cryptocurrency market performance. Source: Coin360

Another interesting thing to note is that Bitcoin has rallied from a low at $10,377.10 in October to a high at $28,419.94 in December, a 173.87% rally in three months. Although the sentiment is bullish and the institutional inflows are accelerating, every bull market witnesses strong corrections and Bitcoin is unlikely to be an exception.

Traders should protect their paper profits and not get carried away with greed because corrections after vertical rallies can be ruthless. Let’s study the charts of the top-10 cryptocurrencies to determine the overhead levels that may act as a strong resistance that can trigger a correction.

BTC/USD

Bitcoin formed a Doji candlestick pattern on Dec. 27 with a long wick, which suggests profit booking above the $27,000 level. The bulls are again struggling to sustain the price above $27,000 today.

BTC/USDT daily chart. Source: TradingView

If the bears sink the price below $25,819.69, the BTC/USD pair could drop to the immediate support at $24,302.50 and then to the 20-day exponential moving average at $22,951.

A strong bounce off this support will suggest that the uptrend remains intact and the bulls are buying on dips. If that happens, the bulls will attempt to resume the uptrend.

However, if the bears sink the price below the 20-day EMA, it will suggest the formation of a short-term top. The correction could then deepen to the 50-day simple moving average at $19,577.

Contrary to this assumption, if the bulls push and sustain the price above $28,419.94, the pair could rally to $30,000, which is likely to act as a stiff resistance.

ETH/USD

Ether (ETH) rebounded off the 50-day SMA ($566) on Dec. 23, which suggests that the bulls are accumulating on dips. The buyers again pushed the price back above $622.807 on Dec. 25, indicating that the correction could be over.

ETH/USDT daily chart. Source: TradingView

The ETH/USD pair picked up momentum on Dec. 27 and cleared the $676.325 overhead resistance. This suggests that the uptrend has resumed. The next target objective on the upside is $800.

The upsloping moving averages and the relative strength index (RSI) close to the overbought territory suggest that bulls are in command. This positive view will invalidate if the pair turns down and plummets below the $622.807 support.

XRP/USD

XRP is in a downtrend. The altcoin broke below the critical support at $0.435 on Dec. 23 and this intensified the selling, resulting in a sharp fall to $0.2132.

XRP/USDT daily chart. Source: TradingView

The downsloping 20-day EMA ($0.426) and the RSI in the negative territory suggest that bears have the upper hand.

When the sentiment is bearish, minor rallies are sold into and that is what happened on Dec. 25. The XRP/USD pair turned down from $0.384998, just above the 38.2% Fibonacci retracement level of the most recent leg of the decline.

However, the bulls are currently trying to keep the pair above the $0.25 support. If they succeed, the pair may remain range-bound between $0.25 and $0.38 for a few more days. The first sign of strength will be a break above the 20-day EMA.

LTC/USD

Litecoin (LTC) broke above a flag pattern and the overhead resistance at $124.1278 on Dec. 25, which indicated the resumption of the uptrend. The breakout of this setup has a target objective of $160.

LTC/USDT daily chart. Source: TradingView

However, the bears are not willing to throw in the towel as they are currently attempting to stall the up-move at the $140 overhead resistance. If they can sink and sustain the price below 124.1278, a drop to the 20-day EMA ($107) may be on the cards.

On the other hand, if the bulls can defend the $124.1278 level, it will suggest that this level has flipped to support. That could enhance the prospects of a break above the $140 to $145 overhead resistance zone.

The rising moving averages and the RSI near the overbought territory suggest that the path of least resistance is to the upside.