Crypto Update: Bitcoin Leads Rebound as ETH Nears Key Level

It has been an interesting Labor Day for the cryptocurrency segment, with the top coins all gaining ground thanks to encouraging rally in BTC. Bitcoin’s persistent relative strength finally came to fruition today, as the most valuable coin recaptured the $10,000 price level amid another bearish shift in the traditional financial markets. The returning trade war fears boosted the main safe-haven assets in the illiquid environment, and BTC managed to gain the most, outpacing the likes of gold and US Treasuries, with the oversold altcoins also joining the party.

BTC scored an upgrade to a short-term buy single in our trend model thanks to the rally, but the top altcoins are all still stuck in their short-term trends, and last week’s key technical breakdowns remain intact as well. With that in mind, the overall picture in the segment remains bearish, but a larger-scale bounce could be underway following months of steep losses.  For now, most of the coins remain on sell signals on both time-frames in our trend model, and while BTC remains technically strong, the outlook for altcoins is still grim.

BTC/USD, 4-Hour Chart Analysis

BTC finally left the no-man’s-land between $10,000 and the key long-term support/resistance zone near $9,200, and crypto bulls were glad to see that despite the bearish pressures in the segment, the coin left the range on the upside. With that, BTC triggered an upgrade in our trend model, and even with the continued technical weakness among the major altcoins, traders could re-enter BTC’s market, even if strict risk management rules should still be applied.

Our trend model is still on a long-term sell signal, but a breakout from the current larger-scale triangle pattern could confirm a secular trend change, and a long-term buy signal even in the face of the continued altcoin bear market. Below $10,000, support is still found near $9.200, $8,400, and $8,200, while resistance zones are still ahead near $11,300, and $13,000.

ETH/USD, 4-Hour Chart Analysis

While ETH followed BTC higher, it remains stuck below the key $180-$185 zone, and the dominant short-term trendline is also near the current price range of the coin. So, as ETH is facing strong overhead resistance, traders should still not enter even short-term positions in the coin, even though a larger-scale corrective move could already be underway in the still relatively weak coin’s market.

Even after the bounce, ETH is still on sell signals on both time-frames in our trend model, and the recent breakdown level is still ahead as resistance. Below the initial support zone near $160, the next major level is found at $145, while above the $180-$185 zone, strong resistance levels are ahead near $200 and $230.

Litecoin Fails to Impress as Ripple Fails at $0.26

XRP/USD, 4-Hour Chart Analysis

Ripple failed to recapture the $0.26 level in a sustained fashion so far, despite the rally in the segment. While XRP is still well above its prior panic low and last week’s low, the long-term setup remains clearly negative in the coin’s market and even though a more durable counter-trend rally is possible in the coming weeks, on the heels of the recent damaging sell-off, the bear market is still very likely to resume afterward.

XRP is still on sell signals on both time-frames in our trend model, and although a short-term upgrade is possible in the case of a broad rally in the segment, traders should continue to stay away from XRP.  Initial support is still found near $0.23, while above the $0.26 level, strong resistance zones are ahead near $0.28, $0.30, and $0.32, which could serve as targets for a coming correction.

LTC/USD, 4-Hour Chart Analysis

Despite rebounding above the key $64 level, Litecoin is still trading well below its recent breakdown level, showing clear signs of technical weakness and continued selling pressure. The coin is still in a short-term downtrend, and since it has been leading the way lower during the recent downswings, its weakness casts a shadow on the whole segment, and especially the bearish altcoins.

Our trend model is still on sell signals on both time frames, and compared to ETH and XRP, it’s far away from an upgrade even following the early-week bounce. Below the initial support near $64, the next major zone is found near $56, while resistance zones are still ahead near $75, between $85 and $90, and near $100.

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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.