Crypto Update: Coins Drift Sideways As Rally Fizzles Out

While yesterday, the cryptocurrency segment saw an encouraging bounce after a scary morning sell-off, the weekend started out in a bearish fashion. The major coins revisited their lows overnight, and while a key breakdown has still been avoided, the corrective short-term patterns are intact and we are still far from a confirmed short-term swing low in the market. The top coins have been tightly correlated in recent days, and while volatility remains relatively low the freshly formed short-term uptrends aren’t safe yet.

The coming days will be crucial in deciding the fate of the rally but with the prior top leaders of the move, such as LTC and BTC not showing relative strength, downside risks remain high. Our trend model is still overwhelmingly bearish on the short-term time-frame, and while the long-term picture remains mixed, caution is still warranted as the long-term downtrend might still resume.

BTC/USD, 4-Hour Chart Analysis

BTC quickly reversed yesterday’s bounce and while it held up above its low, it remains dangerously cause to that, risking another leg higher in the correction. The previously dominant long-term trendline is still not in danger and the coin’s market stabilized today, so bulls can still hope for that a swing low will form in the coming days.

BTC is on a short-term sell signal and long-term buy signal in our trend model, with support zones found near $8,200 and $7,800, and with resistance ahead near 8,400, $8,600, $9,200 and $10,000.

ETH/USD, 4-Hour Chart Analysis

ETH is stuck in a narrow area between its rising trendline and its corrective declining trendline, with the $160 level still being at the center of attention. The coin lost some of its relative strength over the past 24 hours, and now the rising trendline is clearly in danger, which increases downside risks in the whole segment.

Our trend model is now on sell signals on both time-frames, with major support zones found near $160, $145, $135, and $130, and with resistance zones ahead between $180 and $185 and near $200.

XRP And LTC Fail To Show Strength Amid Turmoil

XRP/USD, 4-Hour Chart Analysis

XRP is still the weakest among the top coins from a technical perspective and the coin got very close to hitting a new low overnight. XRP remains well below its recently broken short-term trendline, but its bear market low is safe, for now. Bulls would need a significant improvement in the coin’s behavior to re-enter its market, given its persistent weakness.

XRP is on sell signals on both time-frames in our trend model, with support zones now found near $0.21, $0.20, and $0.1930 and with resistance zones ahead near $0.23, $0.2475, and $0.26.

LTC/USD, 4-Hour Chart Analysis

LTC also remains under selling pressure despite yesterday’s bounce off the key confluence zone that we have been monitoring for days now. The coin is still trading in a short-term uptrend, but the coming days could see a major reversal, with the declining long-term trendline also being in play again. Traders should still not enter new positions here, even as short-term swing low could still form.

LTC is on a short-term sell signal and a long-term buy signal in our trend model, with support zones now found near and $51 and $44, and with resistance zones ahead near $56, $64, and between $72.50 and $75.

Featured image from Shutterstock

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.