W

elcome to another crypto market outlook for the 18th of December!

In this edition, we'll dive into major assets such as US500, DXY, Gold, Bitcoin, and Ethereum, pointing out critical levels and potential trade setups.

From Bitcoin undergoing a correction phase to ETH retesting the weekly support, and the Fear & Greed Index signaling 'Greed' despite the bearish sentiment, this article covers it all.

Are you ready?

Market Heatmap and Fear and Greed Index

To initiate my research, I delved into the analysis by examining the market heatmap, which provided a comprehensive overview of the entire cryptocurrency market.

For an entire month, the cryptocurrency market has shown a bullish trend.

However, this past week marked a correction, with BTC down by 4.13% and ETH by 5.28%.

Consequently, the heatmap indicates a prevailing bearish sentiment, influencing bearish movements across most altcoins.

Heatmap image from Coin360

Despite the recent bearish correction, the Fear & Greed Index continues to signal 'Greed,' suggesting that traders maintain an optimistic outlook and are actively investing in the crypto market, possibly buying the dip.

Fear and Greed Index of Images

US500, DXY and Gold analysis

We consistently monitor the US500 index to assess the current market sentiment. This practice is crucial because the cryptocurrency market often exhibits a significant correlation with the stock market, and this interconnection can impact its fluctuations.

US500 Chart - Weekly Timeframe
US500 Chart - Weekly Timeframe

This week, the US500 broke above a robust resistance zone at $4650.0.

Consequently, we anticipate a bullish continuation, with the potential to reach the upper boundary of the orange rising wedge pattern, aligning with the all-time-high at $4825.0.

US500 Chart - 4H Timeframe
US500 Chart - 4H Timeframe

On the 4-hour timeframe, the overall bullish trend is contained within the rising channel marked in red.

The bulls will maintain control unless there is a break below the lower red trendline and the support level at $4650.0.

We consistently monitor the DXY - USD Index as a standard part of our routine procedure. This is crucial because the value of nearly all assets, including BTC/USD, is closely tied to the USD, which serves as the benchmark currency in the financial markets.

DXY Chart - Daily Timeframe
DXY Chart - Daily Timeframe

The DXY is presently positioned around a strong support zone highlighted in orange.

Therefore, we anticipate the bulls to initiate an upward movement, unless the support at $102.0 is breached downward.

In such a scenario, we would expect a bearish continuation toward the $100.0 support zone.

DXY Chart - 4H Timeframe
DXY Chart - 4H Timeframe

To establish control, the bulls need to break above the last major high, denoted in red at $103.0.

If this occurs, we can anticipate a move toward the upper boundary of the red wedge pattern.

GOLD Chart - Daily Timeframe
GOLD Chart - Daily Timeframe

This week, Gold rebounded from the $2000.0 support zone, indicating bullish momentum.

The bulls will retain control unless there is a break below the $1980.0 support. In such a scenario, further bearish movement towards the $1900.0 support can be expected.

GOLD Chart - 1H Timeframe
GOLD Chart - 1H Timeframe

In the 1-hour timeframe, the bears gained control from a short-term perspective by breaking below the last low in orange at $2028.0.

Consequently, we anticipate a movement towards the $2000.0 support again, where we will be looking for new bullish reversal setups.

USDT.D, Bitcoin and Ethereum analysis

As a standard practice, I initiate my analysis with USDT.D as it serves as a key indicator of traders' sentiment. USDT.D provides valuable insights into whether traders are optimistic, suggesting increased investment in cryptocurrencies, or pessimistic, indicating a shift towards stablecoins.

USDT.D Chart - Daily Timeframe
USDT.D Chart - Daily Timeframe

USDT.D has stayed within a support zone for another entire week.

To maintain bearish control, a requirement would be a daily candle closing below 5.63%. In such a scenario, an expected movement towards the next support level at 5.2% would be anticipated.

Until then, the bulls might still intervene and drive the price higher, which wouldn't be favorable for the crypto market.

USDT.D Chart - 1H Timeframe
USDT.D Chart - 1H Timeframe

In the 1-hour timeframe, to transition the momentum from neutral to bullish, a crucial step would be a breakout above the last major high highlighted in red at 5.92%.

Meanwhile, USDT.D would be confined within a range, forming an ascending triangle pattern.

BTC Chart - Daily Timeframe
BTC Chart - Daily Timeframe

BTC is still maintaining an overall bullish stance as it trades within the ascending channel outlined in red.

During this week, BTC experienced a rejection at the upper boundary of the channel, subsequently trading lower to retest the lower red trendline and the $40,000 support.

BTC Chart - 4H Timeframe
BTC Chart - 4H Timeframe

In the 4-hour timeframe, the bears took control, initiating a correction phase by breaking below the last low marked in red.

For the bulls to regain control and initiate the next upward impulse, a breakout above the previous major high at $43,300 is required.

Meanwhile, until the bulls regain control, BTC may continue to trade lower, potentially testing the key support level at $40,000.

ETH Chart - Weekly Timeframe
ETH Chart - Weekly Timeframe

After surpassing the $2,250.0 resistance zone, ETH remains in a bullish stance, with the bulls assuming control from a long-term perspective.

As long as the support holds, we anticipate a bullish continuation toward the $3,000.0 mark.

ETH Chart - Daily Timeframe
ETH Chart - Daily Timeframe

On the daily timeframe, bullish control will be sustained as long as the recent significant low identified in red at $2,150.0 remains unbroken.

However, a breach of this level could signal a potential movement towards the last local support at $1,900.0.

Meanwhile, on lower timeframes, we will be on the lookout for trend-following buy setups.

Quotes / Advices

Today, I aim to shed light on the myths surrounding trading.

- Quick Riches: Trading guarantees rapid wealth.

Reality: Success requires time, discipline, and skill; quick profits often lead to losses.

- Gut Instincts: Successful traders rely solely on intuition.

Reality: Analytical skills, strategy, and risk management are critical for consistent gains.

- Risk-Free Strategies: Certain strategies guarantee no losses.

Reality: All trading involves risk; minimizing losses is crucial, but no strategy eliminates them entirely.

- Emotionless Trading: Pros trade without emotions.

Reality: Emotional control is challenging; discipline and self-awareness are vital for effective decision-making.

Closing Remarks

In summary, the market heatmap reflects a recent correction in the cryptocurrency market, with BTC and ETH experiencing declines.

Despite this, the Fear & Greed Index remains in 'Greed,' indicating optimism among traders.

Monitoring traditional markets, the US500 index shows a bullish trend, potentially reaching an all-time high.

The DXY (USD Index) and Gold also display positive movements, with bullish and bearish scenarios outlined.

In cryptocurrency-specific analysis, USDT.D suggests a neutral sentiment, while BTC maintains an overall bullish stance despite recent corrections.

ETH, after breaking resistance, remains bullish on both weekly and daily timeframes, with attention to key support levels.

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