Should you be worried about Bitcoin consolidation under the $20,000 mark?

After several weeks of strong growth, Bitcoin is consolidating, down 3.5% over one week to €15,100 ($18,300) on December 9. A consolidation has taken place around $19,000 at the beginning of the week, and the price now seems to retrace. A price action that nevertheless remains normal after the impressive rise observed since the beginning of October. Recent news about a stronger regulation of the cryptocurrencies market could make some investors more cautious in the short term.

More generally, the feeling of a bubble in the markets, be it in equities or any other risky asset such as cryptocurrencies, is spreading more and more. Several signs tend to confirm this feeling. However, a bubble may continue to grow for months or even years, especially in the current context of very low inflation, low bond yields and low demographic dynamics in Western countries. We will guide you in the coming months to try to take advantage of this uptrend in risky assets, while keeping an eye on the return of inflation and the tightening of central banks’ monetary policies, which will surely be warning signals for an end to the trend.

On the technical analysis itself, Bitcoin continues to give the A in the crypto market. This week we are observing the price levels that are likely to initiate a rebound after the correction of the last few days.

• According to CoinGecko, Market capitalization declined to $535 billion from $576 billion last week.

• Bitcoin’s dominance rose to 62.3% from 61.6% last week.

• The best performance in the top 50 is attributed to Compound (COMP) with +47% over one week.

We invite you to discover our analysis in video (in French and dated December 8):

Bitcoin (BTC)

Coinhouse recommendation :
Hold / Buy

• Bitcoin is trading around €15,100 ($18,300) on December 9. A forward price correction has taken place: a consolidation of the price had been taking place since December 1st. The price moved out from the bottom of this consolidation to the 0.618 Fibonacci retracement of the uptrend initiated between November 26 and December 1st. The zone between €14,600 and €14,900 ($17,630 and $18,060) is therefore a new buying zone for aggressive investors. The most cautious will be content to hold at this stage as a longer correction is still possible.

• Everything will depend on this week’s price action, the ideal bullish scenario being to go back above €16,000 ($19,400), which would confirm a rapid continuation of the uptrend. This bullish breakout may justify purchases, even if they remain risky as they are under major resistance. On the other hand, a bearish breakout of $17,630 would lead to a double correction and may justify to sell. The low point of November 26 at $16,200 would then be retested.

Ethereum (ETH)

Coinhouse recommendation :
Hold

• Ethereum (ETH) remains correlated to Bitcoin. Down by 5.3% over one week to trade at €462 ($560). Our recommendation of last week to take partial profits remained judicious. This week, we keep and remain in observation of the reaction of the current rebound. Ethereum also reacted on its Fibonacci retracement zone between €444 and 460 ($540 and 558). But it is now necessary to go back above €500 ($600) to confirm the end of this correction. Such a price action may justify purchases to target a higher price zone at €590/670 ($700/800), on which profits will have to be taken. A bearish breakout of $540 will, however, be a sell signal.

Chainlink (LINK)

Coinhouse recommendation :
Buy on support

• Chainlink (LINK) corrects like the majority of the altcoins this week and loses 9% at €10.10 ($12.23). But on the long term, this asset remains in an uptrend. If the price returns between $8.10 and $10.30, further buying will be appropriate, subject to signs of a bullish reversal in this area. If the price falls below $8, the upward trend initiated since 2019 will be called into question. The $15.58 level is now the major resistance level that must be crossed in order to hope to see the uptrend continue. Breaking through this resistance will also be a buy signal to initially play a return to Chainlink’s historical highs around $20.

Tops & flops of the week (top 50 marketcap)

Tops

1- Compoud (COMP): +47%
2- Theta Network (THETA): +24%
3- Waves : 15%

Flops

1- Stellar (XLM) : -19%
2- OMG : -14%
3- XRP : -12,6%

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