Crypto Update: Bitcoin Resumes Rally as Altcoins Edge Lower
The cryptocurrency segment had another mixed and quiet session, despite the post-Fed surge across traditional financial markets. Bitcoin clearly outperformed its peers today, recapturing the $9400, triggering a renewed buy signal in our trend model, and getting close to hitting a new 15-month high. The other majors mostly drifted lower, although Monero added to its recent gains, and Binance Coin also popped higher.
The long-term technical setups remain bearish in the segment, and even though the immediate outlook remains positive, the ‘under-the-hood’ weakness is still apparent, with only a few coins making new rally highs, despite the strength of Bitcoin and Litecoin, and the stability of the other top coins. That said, traders could still enter smaller short-term positions in the relatively stronger coins, even as the downside risks continue to mount from a broader perspective.
BTC/USD, 4-Hour Chart Analysis
Bitcoin has been the most active coin today, and even though trading volumes remained low across the board, the technical strength of BTC triggered a renewed short-term buy signal in our trend model. The rising short-term trend is clearly intact, and although the long-term setup remains negative, the stage is set for a test of the key 10,000 level.
The most valuable coin could still lead the segment higher, but traders should remain cautious here, as should the broader counter-trend rally roll over, a steep sell-off could soon follow. Strict risk management rules should still be applied here, although above the prior swing high the next level of resistance is only ahead at $10,000, while support is now found near $9200, $9000, $8400, and $8200.
XRP/USD, 4-Hour Chart Analysis
On the other side of the spectrum, Ripple continues to severely lag its peers, and even though it’s still holding up above the $0.42 support, it’s far from breaking its prior swing high. The coin remains on sell signals on both time-frames, and barring a move above the key long-term $0.46 level, traders should still stay away from XRP.
Ripple is still likely to resume its bear market soon, even as the segment-wide rally is still ongoing, and even on the short-term time-frame, XRP failed to show signs of accumulation. In the case of a break-out, the coin could test the $0.51 level, with another strong resistance zone ahead near $0.54, and with support zone below $0.42 found near $0.3750, $0.3550, just above $0.33, and near $0.32.
Litecoin and Ethereum Stuck in Narrow Ranges
LTC/USD, 4-Hour Chart Analysis
While Litecoin triggered a short-term buys signal in our trend model yesterday, after completing a consolidation pattern, it failed to move above its prior swing high. The coin has been struggling with the $140 resistance level, but for now, the immediate outlook remains positive and odds still favor a bullish move in the coming days, due to the coin’s continued relative strength.
That said, even though traders could enter new short-term positions here the long-term setup still warrants caution, and we still don’t expect a sustained break-out from the current levels. Initial support is still found near $125 with further levels near $110, $100, and between $85 and $90, while above the first target near the key long-term $150 level, further resistance is ahead near $180.
ETH/USD, 4-Hour Chart Analysis
Ethereum has been trading in a very narrow range tomorrow, as trading volume and volatility collapsed in the coin’s market, and the $275 resistance was in no danger despite BTC’s rally. While the relative weakness of the coin is a worrying sign, it is close to triggering a renewed short-term buy signal in our model thanks to the current low-volume consolidation.
For now, our trend model is on till a neutral short-term signal, while being on a clear long-term sell signal and even in the case of another swing higher, downside risks will remain high from a broader perspective. A move above $275 would open up the way towards $300 and even the $330 resistance, while in case of a failed move, support levels are found near $260, $200, and $180.
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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.