Crypto Update: Another Rally Attempt Fails
The cryptocurrency segment is having another bearish session following the encouraging early-week strength. The rally attempt that was led primarily by Ripple, Bitcoin Cash, EOS, and Stellar fizzled out, and most of the majors have been drifting lower in the last couple of days. While the bullish move was the broadest in weeks, it still failed to gather steam and shift the market-wide trend.
Also, the long-term bearish setups remained intact with only Bitcoin and Ripple being on neutral long-term signals in our trend model. With that in mind, even in the case of another rally attempt, traders should remain cautious with new positions.
That said, should the sideways price action of the recent months continue and finally end with a broad bullish move, a new cyclical advance would provide good buying opportunities. Until such an improvement, we remain defensive towards the segment, even as volatility continues to be encouragingly low.
XRP/USDT, 4-Hour Chart Analysis
While Ripple gave back a large chunk of its recent gains, it is still trading above its prior range, and it is now the only coin on a short-term buy signal in our trend model. On a negative note, XRP is now below the $0.51 support/resistance level again, and the risk of a failed break-out is growing, especially given the broader trends in the market.
The key long-term zone between $0.42-$0.46 could be in play again next week, while a recovery above $0.54 would be a very bullish sign for the third largest coin. Further support levels are found at $0.375 and $0.355, while resistance is ahead near $0.57 and $0.64.
Bitcoin is drifting towards the primary support zone near $6275 again, after failing to rally above the strong $6500 level, and thus, we maintain our short-term sell signal. That said, BTC is still clearly above the structurally important $5850 support level, so the neutral long-term signal is safe, giving hope for bulls that a major bottom is being formed in the most valuable coin.
Traders and investors should still not enter positions here, and a move below $6275 would likely trigger a test of the $6000 level, while further strong resistance zones above $6500 are ahead near $6750 and $7000.
Altcoins Under Selling Pressure Again
ETH/USD, 4-Hour Chart Analysis
Ethereum tuned lower before triggering a short-term buy signal, although it briefly topped the $220 level. ETH is now drifting towards the key $200 support/resistance level, and the lack of bullish follow through confirms the still dominant bearish long-term trend. That said, the declining trendlines are just above the current price level after the lengthy consolidation period, and there is still some hope for bulls that the coin can avoid another swing lower in the bear market.
For now, traders and investors should still avoid Ethereum, with support levels below $200 found at $180, $170, and $160 and with strong resistance levels ahead near $235 and $260.
LTC/USD, 4-Hour Chart Analysis
Litecoin quickly fell back to the key $51 support/resistance level after the failed rally attempt, and although it is still well above its bear market low, technicals remain clearly bearish on all time-frames. Odds favor another test of the $47 level in the coming weeks, while a recovery above $56 would be needed for a short-term trend change.
EOS/USD, 4-Hour Chart Analysis
EOS showed relative strength during the early-week rally, but it couldn’t maintain the bullish momentum and the broad selloff dragged the coin lower too. Now EOS is back near the support/resistance zone near $5.35 that has been in the center of attention for months.
The long-term setup remains bearish, while short-term, the coin is back on a neutral signal after the failed rally attempt, with key support levels found near $5 and $4.50.
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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.