Crypto Update: Bitcoin Tests $10,000 as Bounce Fades

The cryptocurrency segment is a sea of red yet again, following the weekend bounce, as several majors tested or even dipped below Friday’s lows due to the broad sell-off. Safe-haven assets got under pressure throughout assets classes in the wake of the trade truce between the U.S. and China, and that risk-on shift affected the market of Bitcoin as well in the past 24 hours. While a decisive breakdown has been avoided, so far, the charts remain bearish and new positions remain risky following Friday’s plunge.

Bitcoin briefly dipped below $10,000 after the U.S. market open, while Ethereum got close to the $275 support, and Ripple also fell below its low from last week. Litecoin, on the other hand, has been showing relative strength in recent day, and it remains above its respective swing high, while the previously leading coins, such as IOTA, Dash, and EOS are also holding up near their lows.

For now, the immediate outlook not overwhelmingly negative, even though the relative weakness of BTC is worrying for bulls, and a failed breakdown followed by a recovery rally is still in the cards. That said, due to the long counter-trend rally, and the sizable downside risks, traders still shouldn’t enter new positions here until a confirmed swing low, and our trend model remains on sell signals on both time-frames in most cases.

BTC/USD, 4-Hour Chart Analysis

Bitcoin broke below its secondary trendline after retesting its primary one during the weekend, and now the coin is clearly below the $11,300 support/resistance level. The $10,000 level stopped the decline for now, but the coming days remain crucial for the fate of the rally, as a sustained move below the zone near $9200, could unleash a damaging downtrend.

A recovery above $11,300 could revive the uptrend, but our trend model remains on sell signals on both time-frames, and with the short-term trendlines being broken, caution is clearly warranted here. Besides the key zone near $9200, further support levels are found near $9400 and $8400, while resistance above $11,300 is ahead near $13,000.

ETH/USD, 4-Hour Chart Analysis

Ethereum tested last week’s low following the U.S. market open, but with the main uptrend line also in the current price range, bulls successfully defended the swing low. Despite that, the coin remains in a peculiar technical position, and a clear drop below $275 could soon confirm the trend change. Similarly to Bitcoin’s situation, crucial days are ahead for ETH, and the coin is also on sell signals on both time-frames in our trend model.

With the uptrend still being intact, the coin might still resume the rally, but barring a sustained move above $300, traders should stay away from entering new positions, even in light of ETH’s current short-term relative strength. Above $300, strong resistance is ahead near $330, with further support zone found near $260, $230, and $200.

Litecoin Nears Key Trendline as Ripple Remains Weak

LTC/USD, 4-Hour Chart Analysis

While Litecoin has been relatively strong since the start of the weekend bounce, it failed to hold on to its gains, and today it has been under pressure similarly to the other majors. The coin is currently testing its secondary trendline after dipping back below $125, but it remains above its prior swing low and the support zone between $110 and $112, despite the broad selling pressure in the segment and the new low in BTC.

Despite its current relative strength, the coin is still likely to break its rising trend in light of the bearish long-term setup and the segment-wide pressures, and our trend model remains on sell signals on both time-frames. Below $110 further support levels are found near $100, between $85 and $90 and near $75, while above $125, resistance is ahead near $140 and $150.

XRP/USD, 4-Hour Chart Analysis

Ripple is also threatening with a break below its swing low, even though initially, it managed to hold up above that level today in early trading. The coin is back below $0.40 after briefly recapturing $0.42 during the weekend bounce. XRP is still relatively weak compared to its major peers, and a move below $0.3750 would likely lead to a test of the $0.30 level in the coming, as the bearish long-term pressures are still dominant.

Our trend model remains on clear sell signals on both time-frames, and although there are several support levels between $0.3750 and $0.30, near $0.3550, just above $0.33 and near $0.32, the coin will likely resume its bear market soon. In case of an unlikely recovery, resistance levels above $0.42 are ahead near $0.46 and $0.51

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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.