U.Today

The so-called "Santa Rally" of Bitcoin, typically a time of optimism and price increases during the holiday season, is beginning to show signs of possible danger. After a brief decline below the 50 EMA at $95,000, Bitcoin has managed to recover and is currently trading close to $97,000. There is increasing concern that this rally may ultimately form a lower high, a traditional sign of a downtrend continuation.

A bearish pattern would be validated by a lower high, potentially triggering a sharp decline in price. Bitcoin may struggle to sustain the positive momentum observed in previous months if it fails to rise above prior highs of about $104,000. If it cannot recover higher levels, Bitcoin may move toward crucial support zones, with the 100 EMA around $84,500 being a critical level to monitor.

Rapid changes in sentiment and momentum for Bitcoin, which has been experiencing increasing selling pressure in recent weeks, pose a threat. Despite the asset's attempts to rebound, volume indicators present a mixed picture. Bitcoin's recent recovery may not endure if this pattern continues, trapping investors hoping for further gains.

This situation reflects the general uncertainty surrounding Bitcoin's future. If the market does not make a decisive move above $100,000, it becomes more vulnerable to a significant correction, with $84,500 and potentially $76,000 as possible targets.

Although the Santa Rally of Bitcoin may seem promising initially, traders and investors are finding it increasingly risky. Given the potential for a lower high to form, this rally is crucial; as the market navigates through the holidays, prudence is advised. For bullish confidence to be rekindled, a clear breakout above resistance is necessary; otherwise, the downtrend may gain momentum.

XRP Stays Pressured

XRP remains under pressure due to its ongoing downward trend. In recent weeks, the asset has been steadily declining, forming a bearish channel that has brought it near important support levels. XRP is currently testing its 26 EMA to determine whether it will stabilize or continue its decline.

The persistent downward trend highlights the unpredictability of XRP's market conditions. Coupled with declining trading volumes, the descending channel suggests investor reluctance to make a strong return to the market. If the overall market deteriorates, this lack of conviction renders XRP more susceptible to selling pressure.

Despite the bleak short-term outlook, XRP has maintained a relatively stable position near its 26 EMA. Holding above this level could provide some respite for the asset, as it has historically served as crucial support during volatile times. However, a breach below this level would likely accelerate the decline, approaching the $1.80-$1.50 range, which contains the 50 EMA and other historical supports.

The asset's overall structure necessitates caution among market participants. Concerns over XRP's medium-term prospects are raised by its inability to mount a robust recovery or breach significant resistance levels around $2.50. A successful breakout above this resistance is essential to reversing bearish sentiment and restoring investor confidence.

Currently, XRP's position is both critical and vulnerable. The broader downtrend presents significant risks, even as the asset demonstrates resilience near its 26 EMA. A breach of the $1.80 level could signal a more significant correction, warranting close monitoring by traders and investors. However, if stability above the 26 EMA is maintained, a slow recovery could be possible, provided significant buying pressure materializes to shift the trend.

Is DOGE Relevant?

Dogecoin's low trading volume, a trend persisting over the past few weeks, indicates waning momentum. The market's lack of notable activity, reflecting current uncertainty surrounding the asset, is both concerning and intriguing. In bearish perspectives, a lack of demand often associates with low volume, which can amplify downward pressure.

DOGE has struggled to break through important resistance levels, lingering at $0.34 without significant progress. This stagnation has continued the overall downward trend following its surge to $0.48. Due to the low trading activity, indicating market participants' reluctance to engage, DOGE faces risks of further declines. Yet, some positives exist within the muted volume.

Often, low volume during a downtrend can signify the end of selling pressure. This could suggest waning bearish momentum, possibly leading to a reversal or at least a brief retracement. At around $0.28, where the 100 EMA is situated, Dogecoin may find support if buyers can intervene. A recovery from this level could pave the way for upward movement — potentially as high as $0.37.

This article was originally published on U.Today.