Crypto Update: Brief Rally Attempt Fades as Coins Still Lack Momentum
While the major coins experienced a broad spike today in early trading, the advance was short-lived and the market pulled back and settled down near yesterday’s price levels again. The lack of bullish follow-through once again confirmed the bearish long-term picture in the segment, even as the top coins remain stable and the key support levels are still holding up in most cases.
With no signs of a developing leadership, traders and investors should still avoid entering new positions, despite low volatility, since a retest of the bear market lows is still likely in the coming weeks.
Litecoin/USD, 4-Hour Chart Analysis
One another negative note, the coins that showed strength recently still couldn’t stage a comeback, and it seems more and more likely that the weaker coins will drag the whole market lower. The likes of Litecoin, Dash, IOTA, ETC, and NEO continue to lag the segment, while Ethereum’s persistent weakness is also worrying for bulls.
Bitcoin is still trading right at the $6400 price level despite the rally attempt, and the most valuable coin remains on a short-term sell signal in our trend model. The very narrow trading range that developed after the Tether-turmoil last week is still intact, with the $6500 resistance and the $6275 support still being in focus from a broader perspective.
While the long-term setup in Bitcoin is neutral, given the negative segment-wide trends, we still expect a test of the $6000 level in the coming period, with a likely dip to the long-term zone near $5850. Further resistance levels are ahead at $6750 and $7000, and traders still shouldn’t enter positions here.
Major Altcoins Still Trading Without Clear Direction
XRP/USD, 4-Hour Chart Analysis
Ripple has once again been among the most active majors this week, but the coin failed to make any progress in either direction, and the coin is now back near the mid-point of the narrow range that has been dominant for more than 10 days now. The key long-term $0.42-$0.46 support zone remains in focus and given the lack of bullish momentum we are still leaning bearish for the coming weeks.
Further support below the primary zone is found near $0.375 and $0.355, while strong resistance levels are still ahead at $0.51, $0.54, and $0.57, and the coin is still on short-term sell signal in our trend model.
ETH/USD, 4-Hour Chart Analysis
Ethereum rallied up to $206 this morning, the highest level in a week, but the coin quickly fell back to $200, which is very close to its weekly low. That perfectly describes the conditions in the market of the second largest coin, as ETH is stuck in a very narrow range.
The technical setup is still unchanged, with the coin being on sell signals on both time-frames in our trend model, and the test of the bear market low near $170 is still likely in the coming weeks, with further support levels found at $180 and $160, and with strong resistance ahead at $235 and $260.
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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.