Crypto Update: Break-Out Continues but Coins Turn Volatile as Litecoin Approaches $100
The unprecedented rally in the cryptocurrency segment continued today, with the overwhelming majority of the top coins surging higher again, and with the relatively strong digital currencies leading the way higher again. Litecoin, EOS, and Bitcoin Cash made the most headlines thanks to their stellar gains, but almost all of the battered coins scored double-digit returns for the second day in a row.
The majors surged past key resistance levels before turning volatile in late trading, and thanks to the huge short squeeze they reached dangerously overbought levels from a short-term perspective.
The leaders of the move surpassed all of our targets today, but the volatile swings of the recent hours show exhaustion in the likes of Litecoin, Bitcoin Cash, Dash, and EOS. The counter-trend move could still continue in the coming weeks, but as we emphasized before, traders should still only enter short-term positions even in the relatively stronger coins, as the bear market is still likely to resume.
BTC/USD, 4-Hour Chart Analysis
Bitcoin surpassed the key $5050 level and rocketed up to $5400 today, before falling back to the long-term support resistance level. From a short-term perspective, the coin is already severely overbought, despite the recent breakout, and although the counter-trend move could still continue, traders should use strict risk management rules here, especially in light of the bearish long-term pressures.
A rally up to the structurally important $5850 level is still possible here, but a pullback to the $4450 level is in the card in the coming days, with further support found near $4200 and in the $4000-$4050 zone.
LTC/USD, 4-Hour Chart Analysis
Litecoin exploded higher yet again today, easily surpassing the $75 level which marked the upper boundary of a strong long-term support/resistance zone, and it also cleared the next zone between $85 and $90 before pulling back. Given the extent of the rally and the still bearish long-term outlook, traders should not open new short-term positions here and use strict risk management rules regarding their existing positions.
Above $90 the next major resistance zone is ahead just north of $100, while below the $72.50-$75 zone, further support is found near $64, $62, and $56, and our trend model is back on sell signals on both time-frames following a bullish month, even as the counter-trend move might still continue.
Ethereum Nears $180 as Ripple Remains Suspicious
ETH/USD, 4-Hour Chart
Ethereum shot higher together with the broader market today, touching the $180 resistance level after clearing the key $160 level, but it remains relatively weaker than the other leaders of the February move. With that and the bearish long-term setup in mind, traders should be cautious with ETH here, as the relatively weaker coin is barely above its high from February.
Above $180 the next level of resistance is ahead at $200, but even a rally up to that zone would leave the long-term downtrend intact. Below $160 the support is still found near $145, $130, and $112, and traders could still hold their short-term positions, but new positions shouldn’t be opened at these levels in the relatively weak coin.
XRP/USDT, 4-Hour Chart Analysis
Ripple remains the weakest link among the top coins despite the fact that the coin got lifted above $0.3550 during today’s advance, and as the relative weakness is still apparent in XRP’s market, our trend model is still not on a buy signal even from a short-term perspective.
The coin briefly reached its levels form early January, clearing the spike highs from February, but without signs of bullish follow-through, a failed break-out remains very likely here. Support zones are found just above $0.33, near $0.32, $0.30, and $0.28, while the next major resistance zone is ahead near $0.3750 and our trend model is still on a clear long-term sell signal.
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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.