Bitcoin's New Year Rally Stalls

Bitcoin's New Year rally has stalled, prompting concerns about whether the bullish momentum is weakening. Currently, Bitcoin is trading at $104,899, a 1.21% decrease after retracing slightly from $106,214. While the overall trend remains bullish, signs of fatigue are emerging. The chart indicates that Bitcoin is closely adhering to its rising trendline.

Despite the recent volatility, Bitcoin is still trading above key support levels, and the rally that started in late October remains intact. The 50 EMA has provided reliable dynamic support. However, if selling pressure increases, potential safety nets are at $98,400 and $97,500. Observing trading volume is crucial, as a decrease in buying volume may indicate that bulls are losing strength.

A breakout above $106,000 could attract new buyers, but the lack of follow-through suggests a short-term decline rather than a full trend reversal. Currently, Bitcoin's short-term outlook hinges on maintaining support above the trendline. The next significant support is around $90,000; breaking this level could lead to further declines.

For now, Bitcoin maintains a bullish outlook, with typical corrections expected during extended rallies. A decisive close above the previous high is needed to fuel the next move up. Without that, a more substantial consolidation phase may occur.

Ethereum's Weakness

Ethereum shows signs of weakness after failing to maintain momentum near its recent local peak of $4,100. The price is down 0.69% to $3,867 following a minor pullback, raising concerns of a potential bearish trend.

The first warning sign is the decline from the recent high. Ethereum struggles to hold above its 20-day EMA, a critical short-term support level currently around $3,707. If this level fails, the 50 EMA near $3,355 could serve as the next important support.

A drop below this range might signal a market sentiment shift, pushing ETH closer to the $3,000 mark. Additionally, recent volume data shows a spike in November, but notable decreases in buying volume indicate waning bullish pressure.

Technically, a bearish divergence is forming, with the RSI showing stagnation near 63, a level often linked to lost bullish momentum. Continued decline in the RSI may confirm an extended bearish trend. Nevertheless, Ethereum's long-term trend remains positive as long as it stays above key support levels. Investors should closely monitor the $3,707 and $3,355 zones for potential recovery opportunities.

Dogecoin's Decline

Dogecoin continues to struggle, currently trading at $0.386, down about 2.04%. The technical outlook remains troubling as the ascending channel that previously supported DOGE has broken down.

The inability to sustain momentum has turned the $0.45 level into strong resistance. Consequently, Dogecoin may soon approach the 50-day EMA at $0.35, which is concerning given its recent rally, even though this level provides strong technical support.

The decreasing volume during this pullback emphasizes waning buying pressure, leaving DOGE vulnerable to further declines due to a lack of demand from bulls. If the 50 EMA does not hold, the next critical support lies at $0.28. A significant drop below this could lead to a more severe correction towards $0.21, a level not seen since the last major breakout in November.

Currently, with the RSI near 56, DOGE is not oversold yet, but the downward momentum is increasing, suggesting potential bearish dominance if the RSI decreases further.

> This article was originally published on U.Today.