Crypto Update: Altcoins Attempt Rally as Bitcoin Remains Under Pressure

The choppy consolidation period continues in the cryptocurrency segment, with still no decisive moves in the majors’ markets. The trading ranges that developed following last week’s plunge and the initial bounce are still intact, and while we saw a late-day rally attempt today, led by Ripple, bearish pressures remain apparent the market. The gains are far from being significant, so far, and the bounce hasn’t changed our bearish outlook towards the top coins.

Our trend model remains on sell signals on both time-frames and we continue to expect another, possibly violent leg lower following the current consolidation phase. While Ripple managed to recapture the $0.32 level thanks to the bounce, ETH remains well below $230, Litecoin is stuck clearly below $100 and the relatively weak Bitcoin couldn’t surpass the $10,000 level again. Until we see signs of broad technical strength in the segment, traders should remain defensive as even the immediate outlook is now negative due to the bearish consolidation patterns that developed.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been trading in a very narrow range today, being stuck below the $10,000 price level and following the path of a weak rising short-term trendline. The coin is showing clear signs of short-term relative weakness, as it failed to react to today’s rally attempt, which makes a breakdown likely int h coming days. While BTC has been the leader for a long period, now, a dip below the key $9,200 level is likely ahead, which would be a strong bearish sign for the whole segment.

While a major technical breakdown has been avoided so far, a concerted move to new lows could trigger a dip towards the structurally important $5850, support, as the long-term setup remains bearish.  Our trend model remains on sell signals on both time-frames, with key support levels found near $9,400, $9200, and near $8,400, and with resistance zones above $10,000 ahead near $11,300 and $13,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum formed a bearish consolidation pattern this week, and while the coin is not far from the key $230 resistance, the week rally attempts make a bearish continuation likely in the coming period, even though the timing of such a move is uncertain.  The coin is in safe distance of the initial support zone found near $200, and the short-term momentum indicators are still neutral, but volatility will likely pick up, should the coin move out of its current pattern.

Our trend model remains on sell signals on both time-frames, and barring a broad rally in the segment, traders should avoid entering new positions, and ETH needs, at least, a move above $230 to trigger an upgrade. Below $200, further strong support zones are found near $180, and $160, while above $230, further zones are ahead near $260 and $275.

Ripple Tops $0.32 as Litecoin Flatlines

XRP/USD, 4-Hour Chart Analysis

While Ripple spiked higher today in US trading, leading the rally attempt among the major altcoins, it failed to gains sustained bullish momentum, and it remains relatively weak from a broader perspective. The coin is still well below last week’s correction high, and a dip below the key long-term support zone near $0.30 still seems likely in the coming weeks, despite the fact that XRP managed to take out the steepest declining trendline today.

Our trend model remains firmly on sell signals on both time-frames and although a strong segment-wide rally could lift the coin, traders should remain defensive towards it, as the bear market is very likely to resume soon.  The coin faces strong resistance just above $0.33 but with further resistance ahead near $0.33, $0.3550, and at $0.3750, while support below $0.30 is found near $0.28 and $0.26.

LTC/USD, 4-Hour Chart Analysis

Although Litecoin was among the most volatile coins recently, today it settled down in the no-man’s-land between the $85-$90 zone and the $100 resistance level. The coin is still in a clear short-term downtrend, and while a recovery rally is still possible here, the segment-wide trends point ot a bearish continuation as soon as this weekend.

That said, the consolidation could still continue, but our trend model is on sell signals on both time-frames, and downside risks remain prominent, especially in light of the weakness of the other prior leaders of the rally. Below the initial support zone, further zones are found near $75 and $64, while above $100, resistance zones are still ahead between $110 and $112 and near $125.

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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.

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.