Crypto Update: Another Bounce Fades as Global Turmoil Continues

The cryptocurrency segment had a slightly bearish but all-around quiet session with most of the top coins trading in narrow ranges. While the low level of volatility might be a positive sign, the fact that BTC couldn’t gain ground in today’s environment is a warning sign for crypto bulls. Although global risk assets have been under pressure yet again, as the escalating situation in Hong Kong added to the trade-related and recessionary worries, BTC failed to follow the main safe-haven assets meaningfully higher today.

The most valuable coin did avoid a move below the $11,300 level, leaving its rising short-term trend intact, but with the bearish overall picture in the segment in mind, bulls would need BTC to lead the way higher, or a serious technical breakdown could soon occur. On a slightly positive note, the major altcoins managed to hold up above the key support levels that we have been monitoring for weeks, so we still can’t rule out a segment-wide recovery despite the apparent selling pressure in the market.

For now, traders should remain defensive towards most of the coins, and since downside risks are still high even in the markets of the strongest coins, strict risk management rules should be applied for all positions. Barring a broad recovery rally, the current short-term consolidation patterns will likely be resolved in a bearish fashion, with new lows being likely for most of the top coins in the coming weeks.

BTC/USD, 4-Hour Chart Analysis

While yesterday, we saw a weak rally attempt in Bitcoin’s market, the coin failed to build up bullish momentum. That said, the brief dips below the key $11,300 level also quickly faded, and the coin continues to trade very close to the all-important support/resistance zone. For now, the coin’s market looks balanced, but given the broad weakness in the segment, we continue to be suspicious of the rally in BTC, despite the progress of the past couple of weeks.

Our trend model is still on a short-term buy signal, and as the slightly overbought short-term momentum readings have been cleared, this looks like a good time for re-entry for those traders who trust the rally. Below $11,300, further support zones are found near $10,000, $9,200, $8,400, and $8,200, while the next major resistance zones are ahead near $13,000 and at the prior rally high near $14,000.

 ETH/USD, 4-Hour Chart Analysis

After almost testing the $200 support level last week, Ethereum managed to bounce back slightly keeping bulls’ hope alive and avoiding a key technical breakdown. While the Sunday bounce was encouraging traders should keep in mind that from a broader perspective, the coin is still weak, and the current technical pattern is still decisively bearish, even as the consolidation range remains intact despite last week’s sell-off.

Our trend model is still on clear sell signals on both time-frames, and a move above the key $230 level would still be needed for an upgrade, and as the prior swing low is close to the current price level, a new downswing could start any day. Below $200 further support zones are found near $180, and $160, while above $230, resistance levels are ahead near $260 and $275.

Litecoin Tests $90 While Ripple Hugs Key Support Level

XRP/USD, 4-Hour Chart Analysis

Not much happened since XRP’s test of the $0.28 level, and although the coin managed to hold up well above that price level, and even recovered above $0.30, the momentum of the bounce has been weak. The bearish overall picture hasn’t changed in the past two days, and while the failed weekend breakdown is a small plus for bulls, technicals continue to suggest a decisive move below support and the continuation of the bear market.

XRP is still on clear sell signals on both time-frames in our trend model, and while the $0.28 level is not in immediate danger, traders should stay away from entering new positions even in the case of a broader rally attempt in the segment. Below $0.28, strong support is found near $$0.26, while resistance is ahead near $0.32, just above $0.33, and near $0.3550 and $0.3750.

LTC/USD, 4-Hour Chart Analysis

LTC tested the $90 level on Sunday in late trading, thanks to a brief period of relative strength but now, the coin is back near the lower boundary of the support/resistance zone in play, and it looks ready to test the $85 support level again. Even though the coin is well above its prior swing low, the recent failed rally attempts point to a likely downswing in the coming weeks, with a meaningful dip below the prior low.

Our trend model is still on clear sell signals on both time frames despite the rally attempt and the declining short-term is also intact in the coin’s market. Below $85, further support is still found near $75 and $64, with resistance zones are also ahead between $110 and $112 and near $125, and below $100 traders shouldn’t’ t consider new positions.

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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.

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.