Crypto Update: Coins Attempt Rally Following Bloodbath

The major cryptocurrencies continue to be under severe selling pressure and although most of the coins are off yesterday’s lows the technical damage done is substantial. All eyes are on Bitcoin yet again, as, among the top altcoins, it’s hard to find bullish signs anywhere outside the shortest time-frames. BTC is now also in a confirmed short-term downtrend, although with the previous swing low not far above the current price level, a failed breakdown pattern is still in the cards.

BTC plunged below $10,000 yesterday, and tested the $9000 level today before the current bounce, while Ethereum slipped below the key $200 level as expected, with Litecoin getting very close to $75 and Ripple dipping below $0.30 for the first time since May. For now, our trend model is on sell signals on both time-frames concerning all of the majors, and the relatively strong Bitcoin could lead a recovery rally, we would need signs of broad technical strength before embracing a more constructive stance.

So while today’s stability and the bounce is some of the majors could mean that a larger scale bounce is ahead, traders shouldn’t enter new positions here until we see credible evidence of a short-term trend change.

BTC/USD, 4-Hour Chart Analysis

Bitcoin bottomed out just above $9000 after violating the $10,000, $9400, and $9200 support levels and the previous swing low during the steep market-wide sell-off yesterday. With the dip the coin confirmed the short-term downtrend, being the last major to do so, and while it’s still in a relatively strong technical position compared to its peers, bulls would need a quick recovery to keep the larger scale advance alive.

Our trend model remains on sell signals on both time-frames despite today’s oversold bounce, and even a retest of the $10,000 level would leave the freshly confirmed short-term downtrend intact. Our trend model is still on sell signals on both time-frames, and even considering the coin’s relative strength, traders should remain cautious here. Below $9,200 further support zones are found near $8,400 and $7,600, while resistance is now ahead near $10,000, $11,300, and $13,000.

ETH/USD, 4-Hour Chart Analysis

Ethereum spiked below $200 yesterday, but as the relatively weak coin was already stretched to the downside, it held up well above the next major support zone near the $180 price level, the coin is now testing its low form Monday thanks to today’s bounce, but even the steepest declining trendline is intact due to the heavy losses of the recent period. The $230 level could be in play during the current bounce but in light of the segment-wide pressures, traders should stay away from entering new positions here.

Our trend model is still on clear sell signals on both time-frames, and odds favor a test of the $180 and $160 levels in the coming weeks, due to the new short-term uptrend and the long-term technical setup in ETH’s market. While a full recovery remains unlikely, but should the segment experience a broad rally, resistance levels above $230 are still ahead near $260, $275, and $300.

Ripple and Litecoin Surge Higher After Failed Breakdown

XRP/USD, 4-Hour Chart Analysis

Ripple traded below the key long-term support zone near $0.30 for the first time since May, but in the wake of the already mature decline, it bounced back above that zone today together with the broader market. Now, the coin is trading near the $0.32 level, and as the short-term momentum indicators are still in oversold territory, the counter-trend move could continue in the coming days.

That said, we still expect the coin to test the $0.28 and $0.26 levels and resume its bear market in the coming weeks, and our trend model remains firmly on sell signals on both time-frames. In case of an unlikely recovery, the coin faces a strong resistance just above $0.33, and near $0.3550, and $0.3750.

LTC/USD, 4-Hour Chart Analysis

Litecoin recaptured the $85-$90 support zone after almost dropping as low as the $75 level yesterday, but despite the sizable rally, the short-term downtrend remains intact in the coin’s market. The coin’s current relative strength is a positive sign for the whole segment, but with the overwhelmingly bearish technicals in mind, traders shouldn’t consider jumping in the market.

Our trend model is still on clear sell signals on both time-frames, but as the short-term momentum indicators are in oversold territory, the current rally could continue for in the coming days. Below $75, further support is found near $64, while resistance above $90 is ahead near $100, 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.

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.