Crypto Update: Altcoins in Trouble Despite Bounce as Bitcoin Holds Above $6000
While the major cryptocurrencies experienced an oversold bounce in Asian trading today, the key technical breakdowns in the segment are intact. The top altcoins extended their losses before the bounce, but Bitcoin held up relatively well again, avoiding a test of the $6000 level and staying well above the key long-term support zone that might be in focus in the coming week.
ETC/USD, 4-Hour Chart Analysis
Some of the weakest coins, like Ethereum Classic, NEO, and IOTA are already trading below or at their previous bear market lows, but the majority of the largest digital currencies are still above the lows, keeping the hope of a higher swing low or a successful test of the lows alive. That said, the longer-term bearish trends are clearly dominant, and without signs of stability and bullish momentum, traders and investors should still stay away from new positions, since odds favor the continuation of the bear market.
BTC/USD, 4-Hour Chart Analysis
Although Bitcoin showed encouraging stability in the face of the broad selloff, it remained stuck below the primary resistance level at $6275, and it is still on a short-term sell signal in our trend model following the breakdown from the broad triangle pattern.
While the long-term setup is neutral, the coin is likely to test the crucial zone near $5850 in the coming weeks, especially if altcoins hit new bear market lows, and a break below that zone could trigger another round of liquidations in the segment. The next major support zone below $5850 is found between $5000 and $5100, while further resistance is ahead at $6500 and $6750.
Ripple’s Surges Off Support But Break-Out Still in Danger
XRP/USDT, 4-Hour Chart Analysis
Ripple has been the most volatile among the major altcoins in the last couple of days, and yesterday the coin fell all the way to the weak $0.375 support level before bouncing back hard. XRP has been testing the key $0.42-$0.46 zone today in early trading and it got close to the declining trendline that defined the triangle consolidation pattern of the past two weeks.
Despite the wild moves, the technical setup is basically unchanged, and the coin remains on a short-term sell signal and neutral long-term signal in our trend model. Above the primary resistance zone, further levels are ahead at $0.51, $0.54, and $0.57, while the next major support zone is found near the $0.35 price level.
ETH/USD, 4-Hour Chart Analysis
Ethereum remained relatively weak after the recent breakdown, getting very close to hitting the $180 support level yesterday, and although the bear market low near $170 hasn’t been in danger yet, the short-term setup is still shaky.
Given the strongly negative long-term trend, and the lack of bullish momentum traders and investors still shouldn’t enter positions here, with the short- and long-term sell signals being in place in our trend model. The next major support zone is found near the $160 level, while strong resistance is ahead at $200, $235, near $260, and between $275 and $280.
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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.