Crypto Update: Altcoins Bounce Back but Technicals Still Point Lower

The major cryptocurrencies had another quiet session, despite this week’s bearish price action, and although the top coins failed to show technical progress, bulls avoided a break-down yet again. That said, selling pressure remains apparent in the segment and although we saw some encouraging signs in a few smaller altcoins, the total value of the market barely budged, with the most valuable coins only registering a weak bounce off the recent swing lows.

The long-term setup hasn’t changed in the segment, with the bear market clearly ongoing, and with the majors being dangerously close to their prior lows from a broader perspective. With that in mind traders and investors are still facing strong downside risks, and although it’s possible that we are already in a larger scale bottoming pattern following the damaging decline of 2018, bulls should remain defensive here until we see signs of technical strength among the top coins.

ETH/USD, 4-Hour Chart Analysis

Ethereum continue sot be very weak from a technical standpoint, and the coin is threatening with a move below the key $95-$100 zone, which would likely lead to a test of the bear market low near $80. Despite the relatively low volatility and the light trading activity, ETH is still clearly leading the market lower, and the rally attempts have been very weak in the coin, confirming the strong selling pressure in the market.

Our trend model is still on clear sell signals on both time-frames, and below $112 odds are strongly favoring a bearish continuation, while the coin faces further strong resistance near the $120 and $130 piece levels.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still trading just above its recent swing low after a day with very low volatility, and despite the coin’s stability, technicals are hostile for bulls here. The $3250 level could be in danger soon, and below that, only the prior bear market low provides defense against the test of the crucial long-term zone near $3000.

Even the primary support zone just above $3450 is out of reach, for now, and above that, both the $3600 and the $3850 levels provide strong resistance, with another strong longer-term zone found between $4000 and $4050.

Ripple Holds Above $0.28 as Litecoin Settles Down

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to hold up above the key $0.28 level, but the recent failed rally attempt all but confirms that the coin is headed for a test of the August low near the $0.26 price level. The coin’s relative weakness remains a negative sign for the whole segment, as outside the brief spikes higher, the coin is unable to show any signs of technical strength. XRP also remains on sell signals on both time-frames in our trend model, with further strong resistance still ahead near $0.32, $0.3550, and $0.3750

LTC/USD, 4-Hour Chart Analysis

While Litecoin recovered well after the volatile sell-off that pushed it down to the upper boundary of the key $30-$30.50 support zone, but it failed to recover to its pre-plunge price level in the quiet, low-volatility environment. So, while the coin is still technically stronger than most of its peers, it also remains on sell signals on both time-frames in our trend model, given the hostile long-term picture.

Odds still favor a move towards the $26 level, with further support found near $23, the prior bear market low, while resistance is ahead at $34.50 and near $38, and traders should still stay away from entering new positions here.

Featured image from Shutterstock

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.