Crypto Update: Bitcoin on the Edge, Testing Long-Term Support Zone
The major coins are hovering just above key support levels after the weekend bounce, holding on to their gains, but from a technical standpoint, the segment’s outlook hasn’t changed. The downtrend is still clearly intact despite the rally, as correlations are sky high between the majors and the trendlines are well above the current price levels.
The technical divide between the relatively stronger and weaker coins remains wide, but there is still no sign of bullish momentum that would be needed for a trend change. On another negative, the bearish leadership, especially Litecoin and Dash are still in deep trouble, with only Monero showing some stability. Bitcoin is also underperforming and although a long-term breakdown in the most valuable coin is still not completed, traders shouldn’t enter new positions here.
BTC/USD, 4-Hour Chart Analysis
Bitcoin bounced off the crucial $5850 support level during the weekend and rallied up to the lower boundary of the $6275-$6500, but the move stalled. The coin is still dangerously close to a structural breakdown, which would have negative implications for the whole segment.
The declining short-term trend is still dominant, despite the current correction and further volatile moves could be ahead in the coming days. Below the long-term zone, further support is found between $5400 and $5500 and below that at $5000, while resistance is ahead at $6750 and $7000.
Ethereum At $450, Litecoin Confirms Breakdown
ETH/USD, 4-Hour Chart Analysis
Ethereum is still holding relatively well compared to the other majors, trading well above the April lows, despite the segment-wide downtrend. The coin plunged to $420 before rebounding above $450 and the previous swing low, but ETH failed to show bullish momentum and got stuck near primary resistance, with the short-term still clearly pointing lower.
While the strength of the coin is encouraging, short-term traders should still stay away from entering the market. Further support is found at $400 and $480, while resistance is ahead at $500.
LTC/USD, 4-Hour Chart Analysis
As Litecoin was among the first coins to violate long-term support, the path of the coin is an important indicator for the whole segment, and for now, the coin clearly confirms the technical breakdown, remaining on sell signals on all time-frames. The currency fell to the next main support zone near $75 and the weak oversold bounce, wasn’t enough to carry it back to the $90 level. The strong downtrend remains intact, and although violent corrections are likely ahead, traders and investors shouldn’t enter new positions.
As for the relatively stronger coins, Ripple, IOTA, and EOS are also stuck in strong short-term downtrends, and XRP and IOTA both spiked below the April low before rebounding, so there is no sign of a trend change in the segment. To evaluate the technical damage, we will take a look at the long-term charts tomorrow.
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.