Crypto Update: Another Rally Fails As Downtrend Remains Strong

The major cryptocurrencies had a wild session yesterday as a much worse-than-expected US job market indicator sparked a brief but significant short-covering rally in the segment. All of the top coins surged, higher erasing the losses of the past few days, but the bounce quickly faded, and the coins retreated to their pre-surge ranges. The move reinforced the bearish outlook for the segment, although there are minor bullish signs present in the market today.

BTC proved the strongest from a short-term technical perspective, and the most valuable coin is also higher today before the US open, trading just below the resistance zone near $7,400, but the other majors are also slightly higher. Bulls yet again avoided another key technical breakdown, but the broader picture remains clearly bearish, and new lows are likely as soon as in the coming days in the markets of the weakest majors.

BTC/USD, 4-Hour Chart Analysis

BTC led yesterday’s spike higher, and it has not just moved out of its steeply declining short-term trend channel but it remains above the key trendline. That said, the coin is struggling to hold up above the short-term resistance zone near $7,400 and its October low, leaving last week’s technical breakdown intact. With that in mind, traders should still stay away from entering new positions here until we have confirmation of a short-term trend change.

The coin is still on sell signals on both time-frames in our trend model, with support zones found near $7,000, $6,750, and $6500, and with resistance ahead near $7,400, $7,600, $7,800, and $8,200.

ETH/USD, 4-Hour Chart Analysis

ETH is also trading in a neutral short-term consolidation range, above its previously dominant short-term trendline, and the support zone near $145 held up yet again despite yesterday’s failed rally attempt. The coin remains under clear long-term selling pressure, and while the $130 level and last week’s low is in no danger, new lows remain very likely in the coming weeks.

Our trend model remains on sell signals on both time-frames, with support zones found near $145 and $130, and with resistance zones ahead near $160, between $180 and $185, and near $200.

XRP And LTC Remain Weak In The Wake Of Failed Spike

XRP/USD, 4-Hour Chart Analysis

XRP rallied up to its steeply declining short-term trendline together with the broader market, but it failed to hold on to its gains falling back all the way to the support zone near $0.21. The coin continues to trade dangerously close to its prior low, and it’s likely to hit a new low, leading the way lower for the majors in light of its clear long-term relative weakness.

XRP is still on sell signals on both time-frames in our trend model, with support zones found near $0.21 and $0.20, and with resistance zones ahead near $0.23, $0.2475, $0.26, and $0.28.

LTC/USD, 4-Hour Chart Analysis

LTC also spiked higher together with its peers yesterday, but similarly to XRP it plunged back near a key support level just after the rally attempt. While the coin managed to get back above the $44 level, avoiding a key breakdown, it is still very weak from a technical standpoint, and a sharp shit would be needed even for a short-term trend change.

LTC remains on sell signals on both time-frames in our trend model, with support zones found near $44 and $38, and with resistance zones ahead near $51, $56, and $64.

Featured image from Shutterstock

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.