Bitcoin dynamics continue to influence altcoins. This week, the rapid growth of the largest cryptocurrency pulled other coins with it. Many of them have updated their highs since the beginning of 2023.
Bitcoin
Bitcoin increased in price by almost 12.5% from December 1 to December 8. At one point, the price of BTC almost reached $44,500. However, after that there was some calm. Trading sessions on Wednesday 6 and Thursday 7 December turned out to be completely negative. On Friday afternoon, December 8, Bitcoin was trading near $43,500.
Source: tradingview.com
The increase in the value of Bitcoin occurred due to the sharp closure of a large number of short positions, and also, indirectly, due to the excitement around the US Federal Reserve's decision to pursue a looser monetary policy and the possible approval by the Securities and Exchange Commission of spot ETFs on BTC. And, of course, expectations for the halving, which will take place in April 2024.
Now the situation has changed somewhat. Obviously, one of the investors made good money on the rise of Bitcoin to $44,500 and decided to take profits. Reflection is a decrease in the open interest indicator (the number of futures and options that are traded on the exchange). In any case, this applies to large exchanges like Binance and BitMEX, one of the CryptoQuant platform analysts shared information.
In fact, these conclusions are confirmed by representatives of the Greek.live platform for options traders. They noticed some deviations in December instruments. At first it was bullish, but now it's mostly bearish put options.. At the same time, the trend in January options gives a clear picture: traders are looking forward to the largest cryptocurrency reaching the $50,000 mark. Thus, in the short term, investors are skeptical about BTC, but in a month, in their opinion, the situation will change.
According to technical analysis, Bitcoin has entered a bullish trend. This is confirmed by the fact that the coin is trading above the 200-week moving average (in orange), as well as the new yearly high of $44,490, which was shown on December 5, 2023. The increase in value also led to an increase in volatility, as evidenced by the ATR indicator. The nearest resistance level will be $48,234, the support level will be around $38,500:
Source: tradingview.com
The fear and greed index changed slightly compared to last week – by one point. Current value is 72. This still shows greed prevailing over fear.
Ethereum
Ethereum grew slightly more than Bitcoin over the week – by 13.86%. If last week we doubted whether the second largest capitalization would break through the maximum of 2023, now there is no longer any doubt. Ether not only crossed the key mark of $2,140.8, but is already close to hitting the $2,400 mark.
Source: tradingview.com
The growth of ether coincided with the growth of commissions, and as a result, the platform’s income. The profit indicator on December 6 exceeded the same from December 1 by 1.43 times and almost reached $13.9 million. Commissions for the same dates rose by just over $200,000, from $1.3 million to $1.5 million.
Source: tokenterminal.com
Also supporting growth is the amount of ether in circulation, which continues to decline.. As you know, the lower the supply, the higher the price. This, in fact, we can observe right now. It is worth noting that at the beginning of the year the coin was inflationary.
Source: ultrasound.money
Well, and probably the most important thing was the continuation of the gradual influx of large capital. This week, Ethereum alone reached almost $31 million.. This is more than four times less than Bitcoin, but more than other altcoins.
Source: blog.coinshares.com
According to technical analysis, bulls rule the market. The resistance level of $2,140.8 has been passed. He has now become a support. A “golden cross” has formed on the weekly chart: the fast 50-week moving average (indicated in yellow) crossed the slow 200-week moving average from the bottom up (indicated in orange). So the path to the next resistance level around $3,600 is open:
Source: tradingview.com
Avalanche
Avalanche cryptocurrency beat both Bitcoin and Ethereum in a week. The growth was almost 23.5%. Of the seven trading sessions, only one, December 3, 2023, was negative. Moreover, this is the only time in the last 11 days that the AVAX token has fallen.
Source: tradingview.com
The indicators of the last week are quite eloquent, but the statistics of the last three months are even more impressive: from the lows of October 2023, Avalanche added a mind-boggling 207 (!) percent. It is not surprising that in early December the cryptocurrency returned to the top ten by capitalization. What is the reason for this rise?
Firstly, the popularity of the network is growing. This is evidenced by the increase in the number of transactions: by 167% month on month. For November = $2.73 billion. This is the highest figure in 16 months (since July 2022). This information was provided by journalist Colin Wu.
Secondly, Avalanche managed to enter the top ten in terms of developer activity. The platform immediately fell into ninth place, knocking out Ethereum from there. These statistics were provided by the analytical platform Santiment. Obviously, this moment could also inspire individual investors to buy.
From a technical analysis point of view, more than 200% growth cannot be anything other than a bullish trend. All the indicators are simply shouting about this: the price has overcome the 50-week moving average (indicated in yellow), the RSI indicator is much higher than 50 and has climbed into the overbought zone, which is normal for a trend movement. The next bastion – the resistance level that Avalanche must overcome to continue to rise – will be $30.84. Support comes from the former 2023 high of $23.12.
Source: tradingview.com
Conclusion
Bottom line: cryptocurrencies are growing. At the same time, altcoins show an even more impressive rise compared to Bitcoin. Some slippage in BTC in recent days is explained by the fact that a number of investors decided to take profits.
This material and the information contained herein do not constitute individual or other investment advice. The editors' opinions may not coincide with the opinions of the author, analytical portals and experts.