Crypto Update: Bitcoin Eyes $4000 as Consolidation Continues

The crypto-segment is having a positive day so far today, with the top coins all being higher, recovering a large part of yesterday’ s losses. While the major cryptocurrencies still don’t show signs of strong bullish momentum, and the market is clearly controlled by sellers, the declining volatility of the recent period is an encouraging sign, even as several altcoins continue to trend lower.

The relatively stronger coins held up well above their bear market lows, and although last week’s highs are not in danger, the current consolidation phase could be part of a bottoming process after the selling panic two weeks ago.

The $4000-$4050 zone in Bitcoin, the $0.40 level in Ripple and the $120 level in Ethereum are still in the center of attention, and although all three coins are stuck below those key resistance zones, there is still hope that the market will enter a larger scale rally, helped by the very negative investor sentiment.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still trading below the key $4000-$4050 zone despite today’s bounce and although our trend model is still on a short-term buy signal we still only recommend ultra-short-term positions even in the relatively strong coin, with strict risk management.

The long-term sell signal remains clearly in place, and odds continue to favor the continuation of the bear market from a broader perspective. Above the primary zone, further strong resistance is ahead near $4450 and between $5000 and $5100, with support found near $3600 and $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to be stuck well below the $120 level, while still trading safely above the $95-$100 support zone which also marks the recent bear market low in the coin. Despite being relatively weak compared to BTC, ETH is still better off than most of the smaller altcoins, and a recovery above $120 could trigger a larger scale correction in the oversold coin, with further resistance above $120 is ahead near $130, $150, and $160.

Still No Sign of Bullish Leadership Among Altcoins

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to be weak from a short-term perspective, trading very close to its low from November, and although the long-term picture continues to be encouraging, traders and investors should still remain defensive here.

Our trend model is still on a short-term sell signal, while being neutral on the long-term time-frame.  The main resistance levels to watch are near $0.3550, $0.3750, and $0.40, with the key long-term $0.42-$0.46 zone being out of reach, for now, while support is found near $0.32 and $0.30.

EOS/USD, 4-Hour Chart Analysis

Even the relatively stronger altcoins, such as Litecoin, failed to get close to their recent swing highs, and with still no coins being in short-term uptrends, sellers continue to be clearly in control of the market. On the other hand, the weakest majors are at, or near their bear market lows, with the likes of, EOS, DASH, NEO, and IOTA all weighing heavily on the broader market.

Litecoin/USD, 4-Hour Chart Analysis

Litecoin is trading above the key support zone between $30 and $30.50, but it remains well shy of the $34.50 resistance and the prior swing high, despite its recent relative strength. While the coin is still on a short-term buy signal in our trend model, traders should remain cautious with new positions here, given the bearish segment-wide trends, even if a rally up to the $38 resistance is still possible.

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.