Crypto Update: Choppy Trading Continues as Bulls Try to Find Footing

The major cryptocurrencies continue to trade within the short-term trading ranges that developed following the plunge that took place two weeks ago. While bulls avoided a key technical breakdown in the segment, the top coins are far from being out of the woods, and caution is still warranted. We saw a failed spike lower Sunday in late trading, but dump & pump pattern didn’t lead to a meaningful rally, which confirms the bearish market-wide pressures.

Bitcoin remains relatively weak, and as the most valuable couldn’t retain the strength that it exhibited for months, it will likely lead the next swing lower. That said, the failed breakdown below $9,200 in BTC’s market, together with ETH’s bounce off the $200 level gives bulls hope regarding a recovery rally, but the majors should soon start showing technical strength otherwise, the bearish long-term pressures will likely dominate the segment again.

Our trend model remains on sell signals on both time-frames despite the failed breakdown pattern, and traders should wait for signs of broad technical strength before even considering reentering the market here. Since almost all of the smaller coins are also under clear selling pressure, there is no sign of a developing leadership, and that adds to the downside risks.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin reached an intraday high of almost $9,800, it remains relatively weak compared to the other top coins, and the key long-term support zone near $9200 is still dangerously close. Despite its current weakness, the fact that BTC avoided a breakdown during the weekend might be the precursor of a bullish period, but until we see further evidence of accumulation in the coin’s market. For now, odds still favor a move below $9,200, which could lead to another high-volatility period following the consolidation.

Bulls would need a sustained move above $10,000 to consider new positions in BTC, and our trend model is still on sell signals on both time-frames. Below the initial zone, key support levels are found near and near $8,400, $8,200, and between $7,600 and $7,800, with resistance zones above $10,000 ahead near $11,300 and $13,000.

 ETH/USD, 4-Hour Chart Analysis

Despite a brief period of strength during the current consolidation period, this week, Ethereum also failed to gain ground, similarly to Bitcoin. ETH’s weakness, which is even more suspicious in light of the failed breakdown on Friday foreshadows a move below $200 in the coming days, which could lead to a quick test of the next key support zone near $200.

Our trend model remains on sell signals on both time-frames, and while barring a broad recovery-rally in is still possible here, given the widespread weakness among altcoins downside risks remain very high, and traders should remain defensive. Below $180, another strong support zone is found near $160, while resistance levels are now ahead near $230, $260, and $275.

Ripple Attempts to Rally Again While Litecoin Clings to $90 Level

XRP/USD, 4-Hour Chart Analysis

Ripple experienced several, failed, rally attempts during the current consolidation period, and we saw another brief spike higher today. The latest move faded away near the initial resistance level at $0.32, and while the $0.30 level is not in danger, the series of failed moves once again confirms the weakness of XRP. We still expect the bear market to resume soon, and while a broad rally could save XRP from hitting new lows, downside risks remain prominent.

Our trend model is still firmly on sell signals on both time-frames, and barring above this month’s high near $0.34, traders should stay away entering even short-term positions in the relatively weak coin. XRP also faces strong resistance just above $0.33 but with further zones ahead near $0.3550 and $0.3750, while support below $0.30 is found near $0.28 and $0.26.

LTC/USD, 4-Hour Chart Analysis

Although Litecoin is still in a safe distance of its recent swing low, and it’s also holding up just above the key $85-$90 zone, it failed to show meaningful strength following the Sunday spike below $85. With that and the weakness of the other prior leaders of the spring rally in mind, the segment-wide trends are still clearly bearish. LTC is in a clear short-term downtrend, and as the end of the consolidation period is likely close, we expect a move towards $75 soon.

Our trend model is on clear sell signals on both time-frames and only a sustained move above $100 would be enough for an upgrade. Tomorrow’s Fed decisions could spark a larger-scale move in the segment, and for now, odds favor a bearish continuation. Below the initial support zone, further zones are found near $75 and $64, while above $100, resistance zones are still ahead between $110 and $112 and near $125.

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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.