Crypto Update: Altcoins Gathering Strength as Consolidation Continues

Most of the major cryptocurrencies are still trading near the recent lows after an extended period of range-bound price action. The trading ranges are still intact in most cases, and although the short-term term technical picture slightly improved, a clear buy signal is still missing.

The relative performance of Ethereum and Bitcoin changed substantially in recent days in the favor of ETH, and as the weakness in altcoins was the main driver of the steep decline of the recent weeks, this could be a very important turning point.

Today, coins are sporting modest gains across the board, and several currencies are showing encouraging strength, with EOS breaking out on heavy volume, Ethereum, NEO, Cardano, and IOTA also creeping higher, while BTC being only a tad above yesterday’s levels.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still stuck in a declining short-term trend, justifying a short-term sell signal, even as lots of altcoins are faring better. The coin is struggling to get over the $7000 level, which is now almost perfectly aligned with the declining trendline.

Trading volume is very low in BTC’s market, as the volatility compression is dominant, but a break-out could lead to a strong momentum move soon. Resistance is still ahead near $7300 and $7650, with support in the area around $6750, near $6450, between $6150 and $6250, and near $5850.

ETH/USD, 4-Hour Chart Analysis

Ethereum is holding up above the $400 level, while testing the recent short-term swing high at $420. The first major resistance level is at $450 with further zones near $500 and $625. The coin is close to triggering a short-term buy signal but with the broader declining trend still being intact, traders shouldn’t jump into full positions here, while long-term investors could still add to their holdings with support below $400 is found near $380, $360, and $325.

EOS Moves Higher as Altcoins Eye Break-Outs

EOS/USD, 4-Hour Chart Analysis

While we still can’t conclude a new short-term uptrend in the segment, and as last week’s leaders are still only mixed (with small caps notably outperforming), the overall picture is slightly brighter. EOS provided a clear break-out from a consolidation pattern, with a positive volume pattern. The coin is now testing primary resistance between $7.25 and $740, with the next main level ahead at $9.

Ripple, Litecoin, Bitcoin Cash, Monero, and Dash failed to follow the leaders higher so far, and given the large number of short-term laggards, caution is still warranted until a broader short-term rally starts.

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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.