Bitcoin (BTC) finally broke above the formidable resistance of $38,000 in the past week and marched closer to $40,000. This move shows that Bitcoin’s trajectory remains up. The bulls will try to maintain the momentum and achieve a strong close to the year, while the bears will try to pull the price down.
The major tailwind for Bitcoin is the expectation that the United States Securities and Exchange Commission (SEC) will approve a spot Bitcoin exchange-traded fund as early as January. Swan Bitcoin CEO Cory Klippsten said in an interview with Bloomberg that the window for the approval for the spot Bitcoin ETF “seems to have been narrowed to January 8th, 9th, or 10th.”
Several analysts expect Bitcoin’s price to soar after one or more spot Bitcoin ETFs are greenlighted. However, traders need to look out for the sell-off after the initial knee-jerk reaction to the upside. The trend of selling into strength after the event has occurred is generally seen in legacy markets, leading to the popular adage “buy the rumor, sell the news.”
Could Bitcoin’s rise near $40,000 boost buying in altcoins? Let’s look at the charts of the top 5 cryptocurrencies that may attract investors.
Bitcoin price analysis
Bitcoin rose and closed above the overhead resistance of $37,980 on Dec. 1, which completed the bullish ascending triangle pattern. This setup has a target objective of $41,160.
Usually, after breaking out from a pattern, the price retests the breakout level. In this case, a drop to $38,000 is possible. If bulls flip this level into support, the prospects of a rally above $41,160 increase. The BTC/USDT pair may then skyrocket to $48,000 as there is no significant resistance in between.
Although the trend favors the bulls, the bears are expected to pose a strong challenge at $40,000. A slide below $38,000 may trigger stops of short-term traders. The pair may then test the uptrend line. The bears will have to pull the pair below this level to gain the upper hand in the near term.
The up-move has pushed the RSI on the 4-hour chart into the overbought zone, suggesting that a correction is possible in the near term. The first support is at the 20-exponential moving average and then at the 50-simple moving average, placed near the breakout level of $38,000.
If the price rebounds off the 20-EMA, it will indicate that traders are buying on…
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