Crypto Update: Altcoins Blast Higher As Bitcoin Triggers Long-term Buy Signal

The major cryptocurrencies are having their best day since late October, as the crucial breakout in BTC’s market led to a spectacular short-covering rally among altcoins. While the long-term trends remain bearish in most cases, with only BTC scoring a clear breakout above its respective trendline, more and more coins are solidifying their short-term uptrends. In an interesting twist, our trend model switched to short-term sell signals in the case of LTC and ETH, due to the extreme overbought conditions, the same days as a few tentative long-term buy signals in our trend model.

With the mixed, but still mostly long-term outlook in mind, traders should still only consider smaller short-term positions here, and strict risk management rules should still be applied. The coming days will be crucial for bulls, as the current move could still prove to be nothing more than a counter-trend rally, but thanks to today’s broad surge higher, the odds of a more substantial change in market behavior increased.

BTC/USD, 4-Hour Chart Analysis

BTC has been leading today’s surge from a technical perspective, as the coin clearly left its long-term declining trendline behind, increasing the chances of a confirmed long-term trend change. While a failed breakout is still possible here, and traders shouldn’t go ‘all in’, the most valuable digital currency continues to show encouraging strength. Should some of the key altcoins join BTC, the odds of a crucial trend change in the segment would further increase.

BTC now on buy signals on all time-frames in our trend model, with support zones found near $8,600, $8,400, $8,200, and $7,800, and with resistance ahead near $9,200, $10,000.

ETH/USD, 4-Hour Chart Analysis

ETH blasted higher together with the broader market today, not only leaving behind the $145 resistance level, but also recapturing the $160 level in the process. The coin triggered a short-term sell signal, due to the overbought short-term momentum readings, and since the long-term outlook remains bearish, downside risks are high here.

Our trend model is now on sell signals on both time-frames, with major support zones found near $160, $145, $135, and $130, and with resistance zones ahead between $180 and $185 and near $200.

XRP Recaptures $0.23 As LTC Continues To Lead

XRP/USD, 4-Hour Chart Analysis

While XRP spiked higher and registered lofty gains, percentage-wise today, it remains well within its broad declining trend. The coin is also weak compared to BTC and its closest peers, and although a segment-wide trend change would likely lift XRP too, traders should focus their efforts on the relatively stronger currencies.

XRP is on a short-term buy signal while still being on a long-term sell signal in our trend model, with support zones now found near $0.23, $0.21, $0.20, and $0.1930 and with resistance zones ahead near $0.2475, and $0.26.

LTC/USD, 4-Hour Chart Analysis

LTC remains very strong from a short-term technical perspective, and as it, slightly surprisingly, managed to break out above its long-term trendline and the resistance zone near $56, it triggered a tentative long-term buy signal. On the other hand today’s surge pushed the short-term momentum indicators into dangerously overbought territory, so traders should exit their short-term positions here and wait for the next pullback to re-enter.

LTC is now on a short-term sell signal and a long-term buy signal in our trend model, with support zones now found near $56 and $51, and with resistance zones ahead near $64 and between $72.50 and $75.

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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.