Bitcoin (BTC) bounced back above the psychological level at $50,000 and the S&P 500 hit a new all-time closing high on Dec. 23, suggesting that the panic selling caused due to the omicron variant is subsiding and the much-awaited “Santa rally” may have started.

Data from on-chain analytics firm Glassnode shows that about 100,000 Bitcoin are going from “liquid” to “illiquid” state every month, which means that the coins are being sent to addresses “with little history of spending.” This suggests accumulation by investors.

Daily cryptocurrency market performance. Source: Coin360

In another sign that investors are not dumping their coins on small corrections, data from CryptoRank shows that the total Bitcoin on crypto exchanges has dropped from 9.5% of the total Bitcoin supply in October 2020 to 6.3% of the supply in December of this year, which is the lowest level in 2021.

Is the current recovery the start of a new uptrend or is this just a dead cat bounce that will be sold into? Let’s study the charts of the top 10 cryptocurrencies to find out.

BTC/USDT

Bitcoin broke and closed above the 20-day exponential moving average (EMA) ($49,720) on Dec. 23, indicating that the sellers may be losing their grip. The flattening 20-day EMA and the relative strength index (RSI) near the midpoint suggest a possible change in the short-term trend.

BTC/USDT daily chart. Source: TradingView

The recovery could rise to the 38.2% Fibonacci retracement level at $52,314 and then to the 50% retracement level at $55,560. The bears are likely to mount a strong resistance in this zone….


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