Crypto Update: Another Bounce Fades as Bitcoin Struggles With $10,000 Level
The cryptocurrency segment had yet another very choppy day as investors mulled the consequences of the European Central Bank’s dovish shift and the Fed’s upcoming rate cuts. Lately, the crypto market got a boost from the prospect of more easing by the central banks, but today, the major coins failed to build on yesterday’s late-day momentum. None of the top coins managed to tackle key resistance levels in a successful fashion, but bears also couldn’t take full control of the market yet.
The trading ranges that developed following last week’s plunge remain dominant, but we still don’t see the broad technical strength in the segment that would be needed to trump the freshly formed short-term downtrends. Ethereum couldn’t get over the $230 level, Litecoin failed at $100, Bitcoin is struggling to hold up above $10,000, while XRP is still dangerously close to the $0.30 level and a major bearish breakdown.
Our trend model remains on sell signals on both time-frames, and after the failed bounce, even the strongest coins are far from hitting renewed buy signals. Traders should remain defensive towards the segment, as downside risks remain prominent and the coming weeks will likely see another downswing following the current consolidation period.
BTC/USD, 4-Hour Chart Analysis
Bitcoin fell back below the $10,000 level today despite the rally in Asian trading, and the coin continues to lack the relative strength that we were used to in recent months. That said, BTC is still well above its recent swing low and the key $9,200 support level and with that, bulls can still hope that a major breakdown can be avoided. The current consolidation period continues to look like a bearish pattern, and downside risks remain high here.
Our trend model remains on sell signals on both time-frames, and barring a quick recovery rally a dip below $9,200 could be ahead as soon as this weekend. While the coin is still among the strongest majors from a technical perspective, traders should avoid entering new positions until we see signs of broad strength in the segment, with key support levels found near $9,400, $9200, and near $8,400, and with resistance zones ahead near $11,300 and $13,000.
ETH/USD, 4-Hour Chart Analysis
Ethereum had a very choppy day following the rally in early Asian trading today, and the coin settled down near the midpoint of the short-term trading day by the end of the US session. ETH is still clearly in a short-term downtrend despite the rally attempts, with the $200 and $230 levels marking the barriers of the current range, and with the short-term momentum indicators still being in neutral territory thanks to the consolidation.
Our trend model remains on sell signals on both time-frames, and only a sustained move above $230 would be enough to trigger an upgrade in our trend model here. Below the initial $200 level, further strong support zones are found near $180, and $160, while above $230, further zones are ahead near $260 and $275.
Ripple Fails to Show Strength While Litecoin’s Rally Fades Again
XRP/USD, 4-Hour Chart Analysis
Ripple ran into strong resistance already near the initial zone close to the $0.32 price level, and the relatively weak coin once again approached $0.30 due to the segment-wide pullback. XRP still seems prone to a break below the key long-term zone, which would open up the way towards the $0.28 support level and the prior bear market low near $0.26.
The selling pressure in the coin’s market is still apparent, and today’s price action points to a possible breakdown in the coming days, as the post-plunge consolidation will likely be over soon. The coin is trading in a narrowing short-term pattern, and a bearish continuation looks very likely here, but in case of a less likely recovery, further resistance is ahead near $0.33, $0.3550, and at $0.3750.
LTC/USD, 4-Hour Chart Analysis
While Litecoin led the spike higher in Asian trading, getting close to the key resistance zone near $100, the move quickly faded, and the coin fell back to the upper boundary of the $85-$90 support/resistance zone. The direction of the next major move in LTC’s market is still yet to be decided, but odds continue to favor a dip below $85, especially in light of the segment-wide trends.
While the consolidation could still continue, our trend model is still firmly on sell signals on both time-frames, and the declining short-term trend is clearly intact. 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.