Crypto Update: Bounce Fades as Ripple’s Rally Runs Out of Steam

The major cryptocurrencies are all sporting losses today following the US close, as yesterday’s rebound failed to carry them above the key resistance levels that we have been monitoring. While the weekend lows are also safe, for now, the failed rebound confirms the short-term sell signals in our trend model, and traders still shouldn’t enter new positions here. That said, the counter-trend rally could still resume, but odds now not in bulls favor even regarding the immediate outlook.

BTC/USD, 4-Hour Chart Analysis

Bitcoin failed to recapture the strong $3850 support/resistance in a sustained manner, and today the coin fell back to the still intact rising short-term trendline. The trendline has been supporting BTC all day, and the coin is clearly holding up above the weekend low.

Despite the lack of new swing, the hostile long-term setup warrants caution here, and the re-test of the prior bear market low and the key $3000 level remains likely from a broader perspective. Primary support is now found near $3600 with further levels at $3450 and $3250, while resistance is ahead in the key $4000-$4050 zone and near $4450. 

XRP/USDT, 4-Hour Chart Analysis

Ripple continued to follow its recent trading pattern, as following yesterday’s trade-induced spike higher, sellers quickly took control of its market again. The coin failed to get above its prior swing high and our trend model remained on a sell signal amid the rally attempt.

The long-term setup is still bearish, and as XRP is relatively weak compared to its peers, traders and investors should avoid even in the case of a short-term break-out. The coin fell back below the $0.32 support today, and although it’s well above the stronger $0.30 level, we still expect a move towards the    $0.28 and $0.26, with strong resistance levels also ahead near $0.3550, and $0.3750.

Prior Leaders Fail to Impress

ETH/USD, 4-Hour Chart Analysis

Ethereum failed to retain its relative strength, and it is still stuck below the rising short-term trendline that it broke on Sunday. Despite today’s relative weakness, ETH is still above the crucial $130 level, but below $145, sellers remain in control even from a short-term perspective.

With that in mind, traders should stay away from entering positions here, barring a recovery above the primary resistance level.  Support below $130 is found at $112 and in the key long-term $95-$100 zone, while above $145, strong resistance is ahead near $160 and $180.

LTC/USD, 4-Hour Chart Analysis

Litcecoin drifted back to the $44 support level following the failed recovery attempt but similarly to the other majors, it managed to hold up above that level and the weekend low. The coin remained below the rising short-term trendline, and the weakness of the prior leadership also confirms the bearish move.

Our trend model is on sell signals on both time-frames, and barring a move above $48, traders’ shouldn’t enter new positions. Below the initial $44 support, another strong zone is found near $38, while further resistance is ahead at $51.

EOS/USD, 4-Hour Chart Analysis

EOS has been showing relative weakness today, similarly to the other leaders of the recent rally, and although it is still slightly above the rising short-term trendline, our trend model remains on sell signals on both time-frames. While a short-term recovery is still possible, given the strong long-term downtrend the bear market will likely resume in the coming weeks.  Support zones are now found near $3 and $2.80, while resistance is ahead at $3.50, just above the current price level, and near $3.80 and $4.

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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.