Crypto Update: Bitcoin Leads Weekend Recovery as Consolidation Continues
The major cryptocurrencies started the weekend in a positive fashion, recovering from yesterday’s selloff and stabilizing the short-term technical patterns. The current consolidation kept the possible failed breakdown formation in play in the case of the relatively stronger coins, such as Bitcoin and Litecoin, and although the bearish long-term picture is still not in any danger, the hope for a stronger bounce is still alive, which could be the start of a broader bottoming process.
That said, traders and investors should remain defensive here, and still only consider ultra-short-term positions with strict risk management even in the stronger digital currencies, with sellers still clearly being in control of the market. The coming days could turn out to be vital for crypto bulls, since another rally could get us closer to a short-term trend change in the segment.
BTC/USD, 4-Hour Chart Analysis
Bitcoin managed to recover above the key $4000-$4050 zone after dipping below it during yesterday’s dip, and with that, the most valuable coin held on to the short-term buy signal in our trend model, even as the long-term sell signal is still clearly in place.
All eyes now on the prior swing high near the $4450 resistance level, as a sustained move above that would establish a short-term uptrend, which would be a huge plus for the whole segment. Despite the early signs of stability, traders should still remain defensive here, with strong resistance ahead between $5000 and $5100, and with further support found near $3600 and $3000.
ETH/USD, 4-Hour Chart Analysis
Ethereum continues to lag the relatively stronger coins being stuck in a steep declining short-term trend and below the key $120 level. That said, the bear market lows are well below the current price level, and a broad rally in the segment could propel ETH higher as well, but for now, traders should stay away from entering positions in the coin. Primary support is still found in the $95-$100 zone, with further resistance ahead near $130, $150, and $160.
Litecoin Capped by $34.50 as Ripple Settles Down
XRP/USDT, 4-Hour Chart Analysis
Ripple is still on a neutral short-term signal in our trend model, although the coin is clearly weak from a short-term technical perspective, trading well below the $0.40 level that stopped the initial rally attempt. The coin is trading near the $0.3750 support/resistance level, while holding slightly above the $0.3550 level, with volatility progressively declining in the market.
Barring signs of short-term strength traders shouldn’t enter new positions here, even as the coin remains very strong from a broader perspective, being well clear of its bear market low. Above $0.40 resistance is ahead in the key long-term $0.42-$0.46 zone, while further support levels are found at $0.32 and $0.30.
Litecoin/USD, 4-Hour Chart Analysis
Litecoin attempted a rally above its prior swing high near the $34.50 resistance level, but for now, the short-term uptrend is still not established in the relatively strong coin. The steep broader downtrend is also clearly intact, so despite the short-term buy signal, traders should continue to focus in risk management, even as a rally up to the $38 level continues to be likely, with support levels found near $30 and $26.
DASH/USDT, 4-Hour Chart Analysis
Despite the pockets of early strength, most of the major altcoins are still trading in patterns best described as dead-cat-bounces, with the bear market lows being dangerously close, and with still no sign of a developing bullish leadership.
Dash is among the weakest majors, trading below the initial panic lows and the key $95-$100 long-term support/resistance zone. Should the bearish leaders remain stable, at least holding up above the prior lows during the coming downswing, the odds of a broader bottoming process would increase, but for now, even short-term traders should stay away from the weaker currencies.
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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.