How Far Down Does This Rollercoaster Crypto Market Go Before Flying Up?
The cryptocurrency market remains relentless in testing traders’ patience. While Bitcoin fights to maintain critical support levels, Ethereum and altcoins face their own set of challenges. $ETH has been handed not one but two sharp rejections: first at $4,000 against the USD, and then at 0.04 in the ETH/BTC pair (and the Monday’s flash crash to $3500). Adding salt to the wound, the TOTAL2 (altcoin market cap) chart saw a clear rejection at the 2021 bull market peak—a critical historical level that’s now acting as resistance (see intro to my last analysis link).
For those hoping altcoin season would ride to the rescue, the numbers say otherwise: oops, the altcoin season is done… for now (see chart below from coinmarketcap.com).
Couple this with Bitcoin’s flash crash and Dogecoin’s rollercoaster recovery, and you have a market oscillating between optimism and panic. To add to the drama:
The U.S. Dollar Drama (DXY)
The U.S. Dollar Index hovers near multi-decade resistance (above 106… again), keeping risk-on assets like crypto under pressure. A break higher could trigger further pain for $BTCand altcoins.
Wednesday’s CPI Data—The Wildcard
The Consumer Price Index (CPI) dictates inflation trends. A higher-than-expected reading could delay rate cuts from the Federal Reserve, keeping liquidity tight and crypto prices under pressure. For those new: higher rates = bad for crypto.
Stock Market Blues
SP500, Nasdaq & … Nvidia (-2.55%!): all bled on Monday, spilling risk-off sentiment into crypto. Bitcoin’s Monday night flash crash was part of a larger wave of market sell-offs.
Greed Index Says Correction Is Overdue
The Fear and Greed Index has been in extreme greed territory for weeks. Historically, markets punish greed with sharp corrections.
Source: coinmarketcap.com
Let’s get to the charts and assess where Bitcoin and Dogecoin stand amidst this chaos.
Technical Analysis
Bitcoin ($BTC)
Bitcoin continues to oscillate between higher timeframe bullishness and short-term pain. The big question remains: how much lower can it dip before the next leg up?
Key Levels
$107.5K – Bullish Pennant Target
The November bullish pennant breakout still points to $107.5K, as long as Bitcoin reclaims key resistance levels.
$99K – The Key Pivot
The symmetrical triangle breakdown level. Losing this risks further downside, but reclaiming it targets $108K+.
$90-91K – Make-or-Break Support
Bitcoin’s structural support zone, which has held every correction so far. Losing it could trigger cascading sell-offs.
$79.5K – The Golden Pocket (Retail Annihilation Zone)
This 0.618 Fibonacci retracement aligns with institutional buying zones. A dip here could reset sentiment for the next bull run.
Momentum and Indicators
RSI and Volume
RSI on the 4H chart is nearing oversold territory, but no bullish divergence yet. Volume remains underwhelming, signaling hesitation.
Moving Averages
The 50 and 100 MAs near $98K are dynamic supports. A breakdown increases the likelihood of revisiting $90K.
Flash Crash Insight
Monday’s dip to $94K saw significant buy-the-dip activity, highlighting $90K-$94K as a short-term accumulation zone.
Scenarios
Bullish Case
A reclaim of $99K with volume confirms a path to $107.5K. Interim resistance: $103K (need a few 4h candle closes above – with volume).
Bearish Case
A sustained breakdown below $90K opens the door to $79.5K—a critical institutional buy zone (The Golden Pocket from 83k).
Neutral Case
Sideways consolidation between $91K and $99K creates a frustrating but tradable range.
Dogecoin ($DOGE)
Dogecoin continues to defy expectations, maintaining structure despite Bitcoin’s volatility. Monday’s flash crash tested its limits, and so far, DOGE has passed the test.
Key Levels
$0.41-$0.425 – The Golden Pocket
This Fibonacci retracement zone is DOGE’s first major buy-the-dip level. It aligns with the ascending channel’s lower boundary at the moment to add a layer of certainty.
$0.365-$0.375 – The Accumulation Bottom
Monday’s flash crash found support here, bolstered by the 200 SMA, which is curving upward—indicative of strong momentum.
$0.295-$0.31 – The Stink Order Zone
The deepest correction DOGE can handle without flipping bearish on higher timeframes. This level also coincides with a one-month-old fair value gap.
Momentum and Indicators
Ascending Channel
DOGE has respected this channel for over a month. Monday’s flash crash touched its lower boundary, confirming its relevance.
200 SMA Defense
The 200 SMA acted as the ultimate barrier against Monday’s dip, adding strength to horizontal support zones.
Volume and Divergence
Volume is muted, but any spike at lower levels would signal institutional accumulation.
Scenarios
Bullish Case
Breaking $0.48 with volume targets $0.6 (very little resistance on the way to ATH above 70 cents), the psychological barrier for DOGE.
Bearish Case
Losing $0.365 risks a cascade to $0.31, the fair value gap zone.
Safety Strategies
Layered Buys:
Set orders at $0.425, $0.375, and $0.31.
Stops:
Tight stops below $0.36 protect capital.
Scaling Out:
Take profits at $0.48 and $0.6, trailing stops higher.
Narrative: The Contrarian Playbook
Corrections are the lifeblood of bull markets. They flush out greed, reset sentiment, and create opportunities for those who plan ahead. Whether Bitcoin dips to $79.5K or Dogecoin revisits $0.31, these aren’t death sentences—they’re buy zones for the brave.
If you’re panicking during every correction, here’s a brutal truth: you’re probably overexposed or lack a plan. The market doesn’t care about your emotions—it rewards the prepared.
Last Thoughts
Bull markets and corrections are two sides of the same coin. Bitcoin and Dogecoin remain bullish on higher timeframes, but the path to glory is rarely a straight line. Prepare for volatility, manage your risk, and embrace the chaos—it’s part of the game.
And as for Ethereum and Solana? Join us tomorrow for a brutal health check of these competitors to see how they’ve fared at the start of December. Let’s see if they’re still standing tall—or limping after their recent rejections.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2024/12/altcoin-season-ends-for-now-17b-in-leverage-wiped-as-btc-holds-doge-fights-back