Crypto Update: Another Weak Bounce Runs Out of Steam

The major cryptocurrencies bounced back yesterday in late trading following a steep and broad sell-off in the segment, but today, the market is controlled by sellers yet again. The top coins failed to make meaningful technical progress despite the bounce and the recently formed short-term downtrends are intact. BTC continues to be the weakest from a technical perspective, and while XRP experienced a larger-than-average bounce, it also remains in a dangerous short-term setup.

On the other hand, ETH failed to retain its relative strength, while LTC also remained weak, so there is still no sign of accumulation in the segment, and downside risks remain very high. That said, the prior lows are still not in immediate danger, and with that, the counter-trend could still resume, but the odds of that happening are shrinking, and bulls are running out of time due to the current broad weakness.

BTC/USD, 4-Hour Chart Analysis

BTC bounced back together with the broader market but it only managed to reach the $8,150 level before turning lower again, and the selling pressure remains apparent in the coin’s market. The coin is still well below the key support levels that it violated over the recent days and that means that a test of the key long-term zone between $7,600 and $7,800 looks very likely. Taking the segment-wide weakness into account the odds of another, possibly damaging downswing are also high.

The coin is still on sell signals on both time-frames in our trend model, with support zones now found between $7,600 and $7.800 and near $7,000, and with resistance ahead near $8,200, $8,400, $8,650, and $9,200.

ETH/USD, 4-Hour Chart Analysis

ETH remained very close to its intraday low from yesterday, despite the broad bounce, and it got stuck below the key long-term $180-$185 support/resistance zone. The coin’s short-term weakness is a huge blow for bulls, as ETH has been the most promising among the top coins in the bearish environment. The coin is likely to revisit the $160 level in the coming weeks and traders should still stay away from entering new positions.

Our trend remains on sell signals on both time-frames, with support zones now found near $160, $145, and $130, and with resistance zones ahead between $180 and $185 and near $200 and $230.

XRP Spikes As LTC Remains Under Pressure

XRP/USD, 4-Hour Chart Analysis

XRP experienced the strongest rebound in the past 24 hours, but in light of its recent steep losses, it remains among the weakest majors from a technical perspective. The coin is still in a hostile long-term position, and it might resume its bear market in the near future, even as its prior panic low is in no danger currently.

XRP is still on sell signals on both time-frames in our trend model, with support zones now found near $0.2475, $0.23, and $0.21, and with resistance zones ahead near $0.26, $0.28, and $0.30.

LTC/USD, 4-Hour Chart Analysis

LTC’s bounce failed at the crucial $56 price level following its recent breakdown, and it left the freshly-formed bearish short-term trend intact. The coin is likely headed for a test of the $51 level in the coming weeks, even though a move back above $57.50 could still resurrect the counter-trend move, in the relatively weak coin’s market.

LTC remains on sell signals on both time-frames in our trend model, with support zones no found near $51 and $44 and with further resistance zone ahead near $64 and $75.

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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.

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.