Crypto Update: Bitcoin and Ethereum Clinch New Highs as Altcoins Lag Behind Again

The major cryptocurrencies continue to diverge substantially despite the weekend’s broad rally. Although Bitcoin and Ethereum are still showing strength, hitting new rally high yesterday in late trading and today respectively, the other top coins are lagging behind. BTC touched $13,000 after surpassing the $11,300 resistance and gaining almost 20% overnight, while Ethereum also topped the $330 level.

Despite the surge, most of the smaller coins are still left out of the rally, and the previously leading majors continue to show relative weakness. The parabolic rally of Bitcoin is likely very close to its end now, and as the coin failed to clear its overbought short-term momentum readings during its shallow pullback, our trend model remained on a short-term sell signal.  The chances of a major top forming during this swing are still high, and that continues to warrants caution with regards to new positions even in the relatively stronger coins.

BTC/USD, 4-Hour Chart Analysis

Bitcoin pushed to a new swing high yesterday in late trading, and that unleashed yet another technical break-out, despite the overbought momentum readings and the strength of the resistance zone near the $11,300 price level. The most valuable coin quickly reached the $13,000 resistance after the break-out and as the key short-term momentum indicators remain overbought, and nearing extreme overbought readings, traders shouldn’t enter new positions here.

We remain negative on the long-term outlook for BTC here despite the parabolic rally, and the still intact short-term uptrend. Above $13,000, resistance is ahead near $14,350, while further support is found near $10,000, $9400, $9200, and $8400.

ETH/USD, 4-Hour Chart Analysis

Ethereum joined Bitcoin’s break-out with a slight delay, and after remaining on a neutral signal during the recent shallow pullback it triggered a short-term sell signal as well today. The coin is now clearly overbought from a short-term perspective, after recapturing the $330 resistance, and traders should exit their existing positions here.

With our trend model still being on a long-term sell signal, odds favor a major top in the coming weeks, and even as the short-term uptrend is intact, and the break-out could still, investors should be defensive towards the second largest coin. Initial resistance is now ahead near $380, while support below $330 is found near $300, $275, $260, and $230.

Altcoins Remain Suspiciously Weak

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade below the $140 resistance level despite the bullish segment-wide backdrop and the euphoric rally in BTC, and even though it is still on a short-term buy signal in our trend model, its relative weakness is worrying even regarding the immediate outlook. LTC is still trading in a short-term uptrend, but in the case of the expected sudden reversal in the top coins, support levels could quickly start falling.

Long-term technicals are still negative, and while another leg higher in the rally is possible here, traders should still only consider small short-term positions here especially in light of the coin’s current weakness. Initial resistance is ahead near $140, with strong long-term zones above that near $150 and $180, while support is still found near $125, $110, $100, and between $85 and $90.

XRP/USD, 4-Hour Chart Analysis

Ripple has been edging higher amid Bitcoin’s surge today, but despite the rally, it failed to get back to its recent swing high, remaining clearly weak from a short-term perspective. The coin is also lagging its major peers from a broader standpoint, and although it could be ready to hit a new swing high in the coming days, we don’t expect a durable move higher.

XRP is still on a short-term buy signal in our trend model, while also remaining on a long-term sell signal, but traders should still focus on the relatively stronger coins, especially at this mature stage of the rally. Initial resistance is still ahead near $0.51, with another strong zone near $0.54, while support zones are found at $0.46, $0.42, and near $0.3750 and $0.3550.

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.