Crypto Update: Altcoin Rally Reaches Euphoric Phase

The cryptocurrency segment remains bullish across the board, but while altcoins registered lofty gains in the past few days, BTC stagnated. We have also been seeing signs of exhaustion, with optimism reaching levels not seen in a long time in the segment, and that could lead to a more significant top soon. So, while the short-term uptrends are clearly intact and the leaders of the rally remain strong, traders should cut back on position sizes due to the euphoric sentiment and the stretched short-term rally.

Our trend model saw several short-term downgrades, and while there are still no outright sell signals, new short-term positions seem risky at these levels. The coming days could bring further gains and a spike in volatility, and traders should wait until the overbought readings are cleared before entering new trades, even as the long-term outlook is now bullish across the board.

BTC/USD, 4-Hour Chart Analysis

While BTC continues to trade in a bullish short-term trend channel it also remains relatively weak compared to the top altcoins. The coin is still well shy of the $11,300 resistance level, but as it’s not overbought from a short-term momentum perspective, it could still test that level in the current upswing.

BTC is still on buy signals on both time-frames in our trend model, with support zones now found near $10,000, $9,200, $8,600, and $8,400, and with resistance ahead near $11,300, and $13,000.

ETH/USD, 4-Hour Chart Analysis

ETH continues to lead the way higher in the segment and it remains very strong from a short-term momentum perspective, in the face of the overbought momentum readings. The coin is still in a strong short-term uptrend, though, and a spike up to $300 is in the cards here, but traders should keep in mind that the rally is stretched and look for opportunities to reduce their exposure. The long-term trend shift seems safe, and we expect much better buying opportunities to arise in the coming weeks.

Our trend model is now on a neutral short-term signal while still being on a long-term buy signal, with major support zones found near $275, $260, $230, and $200, and with resistance zones ahead near $290 and $300.

XRP Tests $0.33 As LTC Lags Broader Market

XRP/USD, 4-Hour Chart Analysis

After breaking out above $0.30, XRP quickly topped the $0.32 and $0.33 resistance levels as well before entering a very volatile consolidation pattern. The coin is still above those levels, but due to the overbought short-term momentum readings, it got downgraded in our trend model. The short-term uptrend remains intact but we expect a deeper pullback in its market soon, and traders shouldn’t enter new positions here.

Our trend model is now on a neutral short-term signal while still being on a long-term buy signal, with support zones found near$0.32, $0.30, $0.28. and $0.26, and with resistance zones ahead near $0.33, and $0.3550, $0.3750.

LTC/USD, 4-Hour Chart Analysis

LTC failed to hit a new swing high today, despite the bullish sentiment and ETH’s surge, and it continues to be stuck well below $85. The coin is still in a rising short-term trend, but the ‘narrowing’ of the rally is another warning sign for bulls, and LTC could be soon entering a pullback together with the broader market. That said, the long-term trend shift is safe and we expect the freshly formed trend to continue following the pullback.

LTC is on buy signals on both time-frames in our trend model with support zones now found near $75, $72.50, $64, $56, and $51, and with resistance zones ahead near $85 and $90.

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Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.