After consolidating between $73 support and $81 resistance for more than three weeks, Litecoin broke out of this pattern by breaking its lower limit
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Bitcoin (BTC)
Increasingly optimistic macroeconomic data and rising expectations for the Fed's pivot have seen Bitcoin rise by nearly $2,900 or 18.7% recently, returning to the previously defeated support (now resistance) of $18,500 and measuring 50% Fibonacci retracement from the earlier downward impulse observed in response to information about the collapse of the FTX exchange in the first half of November.
However, a more hawkish than expected tone of the announcement and statements by CEO Jerome Powell after the December meeting of the Federal Open Market Operations Committee (FOMC) meant that there was a slight supply reaction during Wednesday's trading, which, combined with concerns about liquidity problems that may affect the Binance exchange contributed to BTC falling below USD 17,000.
In the near future, Bitcoin may return even to the November lows of USD 15,600. However, this does not necessarily mean its permanent return to the downward path.
Financial markets are still pricing in that the Federal Reserve will make just two more rate hikes of 25 basis points each at its meetings in February and March next year before moving from tightening to normalizing before the end of next year (September and December 2023). year) to make the first interest rate cuts.
However, there are many indications that the near future of Bitcoin (and not only) will depend not on economic data and monetary decisions of the Federal Reserve but on reports on the financial condition and state of reserves of the Binance exchange.
Because it is the world's largest virtual asset exchange platform, its possible collapse could cause an actual collapse, the scale of which would be at least several times greater than the sale caused by the collapse of the FTX exchange in the first half of November. For the entire cryptocurrency market, it would be a blow that would contribute to the loss of investor confidence, resulting in extending the cryptocurrency winter that has been going on for over a year, not by weeks or months, but by years.
Therefore, until Binance proves that the state of reserves reflects the actual balances of exchange users' accounts and does not effectively repel concerns about possible liquidity problems, the cryptocurrency market will be dominated by horizontal and downward trends.
Ethereum (ETH)
Ethereum's quotations have recently increased by almost 26%, overcoming the horizontal resistance in the region of USD 1220 and returning to the previously defeated uptrend line, where a supply reaction appeared last Wednesday.
The persistent rejection of this level led to a clear downward move, with ETH falling below the technical support of $1,220. If the sale continues, the cryptocurrency could move towards USD 1,100 in the near future or even further to USD 1,000.
Bitcoin Cash (BCH)
Bitcoin Cash recently fell below the technical support of $106. Since breaking one support usually signals the potential for further declines to the next, in this case, we could expect further depreciation towards USD 97 or even below USD 90 in the near future, which would be the lowest level since November 2022 one the lowest since December 2018.
Litecoin (LTC)
After consolidating between $73 support and $81 resistance for more than three weeks, Litecoin broke out of this pattern by breaking its lower limit.
A dynamic downward rally made the LTC exchange rate quickly find itself in the area of the next support between USD 61.30 and USD 64.50. However, if this barrier is also broken, one should prepare for further depreciation towards USD 56.70 or even USD 50.
Polygon (MATIC)
The price of the Polygon cryptocurrency has fallen by almost 17% over the past few days. This sell-off brought the MATIC exchange rate back to the uptrend line, from which it has bounced several times in recent months.
It is worth noting, however, that the demand reaction around this support this time is definitely weaker than those we have observed. This also increases the chances of breaking this level, which in turn would threaten further declines.
If the currently tested uptrend line is broken, the MATIC could continue to rally south towards the $0.74-0.76 zone or even further to $0.70 or $0.61.
XRP
The supply pressure observed in the broad cryptocurrency market is also visible on XRP quotations. After a slight upward correction, the exchange rate of this cryptocurrency rebounded from the previously defeated support (now resistance) of USD 0.42, and for some time, we have been observing its decline again.
There are many indications that XRP will soon return to the August, September and November lows of USD 0.32. However, if that support is broken this time, the sell-off could continue to the $0.30 mark, which would be the lowest level since July 2022 and one of the lowest since January 2021.
