Holiday Bounce: Year-End Rally in Sight?

Welcome to another crypto market outlook for the 22nd of December!

Following the FOMC meeting and Powell’s speech, the crypto market took a hit just before Christmas. However, the good news is that, based on previous cycles, the week between Christmas and New Year is typically bullish. So, are we gearing up for an end-of-year rally?

‍‍Today, we will cover the following topics:

- Market Heatmap and Fear and Greed Index
- US500, DXY and Gold Analysis
- USDT.D, Bitcoin and Ethereum Analysis
- Quotes / Advices
- Closing Remarks

Market Heatmap and Fear and Greed Index

‍BTC and ETH took a significant dip this week, pulling the entire crypto market down with them. However, many altcoins are nearing strong support or demand zones, signaling that the storm might soon end and brighter days could be ahead.

7 days crypto heatmap showing overall bearish sentiment with BTC down by -2.5% and ETH by -13.3%. — *Crypto 7-Days Heatmap*

This week, the Fear and Greed Index shifted from "Extreme Greed" to "Greed." Despite the aggressive dip, the meter has not fallen into the "Fear" zone, indicating that traders remain optimistic about the year ahead.

Fear and greed index signaling Greed for the entire week. — *Fear and Greed Index*

US500, DXY and Gold analysis

US500 weekly chart overall bullish and currently rejecting the $6000 round number. — *US500 Chart - Weekly Timeframe*

As highlighted in our previous market outlooks, the US500 remains bullish from a macro perspective as long as it continues to trade within the rising channel.

However, when it approaches the upper boundary of the channel, it enters overbought territory.

US500 daily chart overall bullish as long as the $5,830 low holds. — *US500 Chart - Daily Timeframe*

As long as the most recent low at $5,830 holds, the bulls will maintain control in the medium term.

However, if the low marked in green is broken to the downside, a significant correction toward the lower orange trendline and the $5,500 level is likely.

DXY weekly chart breaking above a major resistance at $107.5. — *DXY Chart - Weekly Timeframe*

Following the Fed's interest rate decision, the DXY has been strengthening over the past couple of days.

It is currently breaking above its weekly resistance, indicating that further upside potential is expected.

DXY daily chart overall bullish trading within a rising channel. — *DXY Chart - Daily Timeframe*

As long as the DXY continues trading within the rising channel marked in blue, the momentum will remain bullish.

The bears are likely to take control only if the $106.5 support level is broken to the downside.

Gold daily chart rejecting the lower bound of its rising channel. — *GOLD Chart - Daily Timeframe*

As the DXY gained strength this week, Gold has been losing momentum, as it typically shares a negative correlation with the USD Index.

However, it is currently hovering near the lower bound of its channel, suggesting that bulls might step in as the market opens next week.

Gold 4h chart bearish unless the last high at $2,650 is broken upward. — *GOLD Chart - 4H Timeframe*

For the bulls to confirm the start of the next medium-term impulse move, a break above the last high marked in red at $2,650 is required.

Until then, Gold is likely to remain bearish.

USDT.D, Bitcoin and Ethereum analysis

USDT.D daily chart rejecting the upper bound of its falling channel. — *USDT.D Chart - Daily Timeframe*

As anticipated in our previous market outlook, USDT.D perfectly bounced off the 3.75% support level and moved higher to test the upper boundary of the descending red channel.

USDT.D 4h chart retesting a strong structure at 4.37%. — *USDT.D Chart - 4H Timeframe*

After rejecting the upper boundary of the daily falling channel, which serves as resistance, USDT.D has entered a short-term correction phase.

If the 4.37% level marked in blue is breached to the upside, a deeper bullish correction toward the upper red trendline is likely.

BTC weekly chart rejecting a strong round number at $100,000. — *BTC Chart - Weekly Timeframe*

As mentioned in the previous BTC update, it continues to hover around the $100,000 level. This consolidation is expected following its parabolic rise from $60,000.

BTC 4h chart rejecting the lower bound of a rising wedge pattern at $91,000. — *BTC Chart - 4H Timeframe*

This week, BTC rebounded off the lower boundary of the flat rising wedge marked in red.

As long as the $91,000 support level holds, the bulls will maintain control, particularly if BTC breaks above the $100,000 level once again.

ETH daily chart rejecting a resistance zone at $3,500. — *ETH Chart - Daily Timeframe*

After breaking below the red channel and the $3,500 resistance, ETH's momentum has shifted from bullish to bearish.

As long as the $3,500 resistance level remains intact, a bearish continuation toward the $3,000 round number is likely.

ETH 4h chart showing that a break above $3,600 could signal a bullish continuation towards the $4,000 round number. — *ETH Chart - 4H Timeframe*

Conversely, if the $3,600 level is broken to the upside, a bullish surge toward $4,000 can be anticipated.

Quotes / Advices

‍I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.
~ Tom Basso

Closing Remarks

‍In summary, the Fear and Greed Index reflects "Greed," indicating optimism remains for the year ahead.

Key insights include the US500 maintaining bullish momentum as long as critical support levels hold, while DXY strength weighs on Gold.

BTC consolidation around $100,000 continues, with a bullish breakout contingent on key resistance levels. Similarly, ETH faces bearish momentum below $3,500, with a potential bullish reversal above $3,600.

As we approach the week between Christmas and New Year—historically bullish for crypto markets—traders remain optimistic for an end-of-year rally.