Crypto Update: Bitcoin Finds Footing but Bearish Pressures Persist

The major cryptocurrencies had a wild 24 hours, following a sudden burst of buying in Bitcoin’s market that failed to trigger a meaningful rally in the segment, so far. The market continues to show strong divergences even though the selling pressure is apparent across the board. The most valuable coin recaptured the $10,000 level and got close to $11,000 thanks to the oversold bounce, but most of the smaller coins only managed to score less significant gains from a technical perspective, and the charts continue to be wounded.

With the freshly formed short-term downtrends remain intact in most cases, the current rally could last for a few more days given the extent of the preceding sell-off. That said, with odds favoring another leg lower soon, traders shouldn’t enter new positions here even in the relatively strongest coins, and our trend model is still on sell signals on both time-frames.

Apart from BTC, only Litecoin showed meaningful short-term strength, and although that’s a positive sign for the whole segment, as LTC was among the early leaders of the spring rally, breadth remains very weak in the segment. We would need to see broad signs of stability and multiple trendline breaks before even considering a short-term trend change and a more constructive stance towards the top coins.

 

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been leading the way higher yet again since the start of yesterday’s bounce, but for now, the coin failed to show meaningful bullish follow-thorough, and the sudden short squeeze wasn’t enough to trigger an upgrade in our trend model. With the segment-wide pressures in mind, traders should remain cautious even towards Bitcoin as t eh new downtrend will likely continue following the current corrective phase.

Our trend model is still on sell signals on both time-frames, with the key $11,300 level still towering ahead as strong resistance. While the $10,000 level could be in focus this weekend, the $9,200 support continues to be the line-in-the-sand, and we expect a re-test of it soon. Further resistance is found near $9,400 and at $8,400, while in case of a less likely recovery, further resistance is ahead near $13,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum retested the $230 level during the spike higher, but the coin failed to sustainably stay above the even the steepest declining trendline, proving its relative weakness yet again. ETH remains under strong selling pressure, and as the oversold short-term momentum readings are quickly being cleared the odds of another downswing are already increasing. That said, the coin is in a safe distance of the $200 level, and the key long-term $180 level is in no immediate danger.

Our trend model is still on clear sell signals on both time-frames, and bulls would need a strong ETH for the segment trend to change, so investors should be paying close attention to the coin’s performance in the coming period. ETH faces resistance near $230, $260, and $275, while further support below $180 is found near $160.

Ripple Fails to Join Bounce as Litecoin Shines

XRP/USD, 4-Hour Chart Analysis

Despite catching a bid after violating the $0.30 level for the first time since May, XRP failed to maintain its momentum and it’s now showing clear signs of relative weakness again. Ripple is stuck below the $0.32 level that it tested during the initial post-plunge bounce, and it remains within striking distance of the key long-term zone near $0.30.

The long-term outlook remains bleak for XRP, the coin is the weakest among the largest digital currencies from a technical standpoint, and with that in mind, traders should avoid entering positions even in the case of abroad recovery in the segment. Our trend model is on clear sell signals on both time-frames, and above the initial zone near $0.32, strong resistance is ahead just above $0.33, near $0.3550, and at $0.3750, while further support is found at $0.28 and $0.26.

LTC/USD, 4-Hour Chart Analysis

Litecoin has been among the strongest majors during the current bounce after getting close to the $75 support earlier on this week. The coin briefly spiked above $100 yesterday in late trading, but for now, it failed to solidify its position above that key zone. With the broader picture in the segment in mind, a successful recovery is still unlikely, but should more coins join LTC and BTC, a new leadership could form in the coming weeks.

Despite the improvements, our trend model is still on sell signals on both time-frames, and although LTC is a prime candidate for a renewed short-term buy signal, it’s way too early to jump back in the market. Initial support is found in the key long-term $85-$90 zone, while below $75, another zone is found near $64, with further resistance ahead between $110 and $112 and near $125.

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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.

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.