Crypto Update: Coins Drift Sideways but Leadership Weakens

The major cryptocurrencies have been mostly trading in relatively narrow ranges in the past 24 hours, and although we saw a broad sell-off today in early trading, a major bearish move has been avoided, for now. While the coins are still holding on to most of their gains from last Friday’s Litecoin-led surge, the relatively stronger currencies failed to maintain their momentum.

EOS/USD, 4-Hour Chart Analysis

The weakening leadership reinforces our view that we are experiencing yet another bear market rally, especially as the top 3 coins still failed to show meaningful strength. The likes of Dash, EOS, Ethereum, and Litecoin are all well below their recent swing highs, while the previously weaker coins, such as BTC and Ripple haven’t made technical progress either. With the long-term picture in mind, traders should remain cautious even with the stronger coins here, despite the short-term buy signals in our trend model.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been trading in a narrow range below the key long-term support/resistance level at $3600, as trading activity remained low throughout the day in the most valuable coin. The low level of liquidity will likely lead to more sudden spikes in the coin, and the lack of bullish follow-through is a clearly negative sign.

That said, from a technical perspective the short-term setup is still leaning positive, but traders should only enter small, speculative positions in light of the bearish long-term setup. The coin still faces strong resistance near $3850 and between $4000 and $4050, while support is found just above $3450, near $3250, and in the key long-term zone near the $3000 price level.

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade in a short-term correction pattern, and although the recently leading coin lost its relative strength, it continues to hold up well above the line-in-the-sand $38 level. LTC is trying to form a swing low to consolidate its lofty gains, and despite the hostile long-term market-wide trends, it remains on a short-term buy signal in our trend model.

Above the initial resistance at $44, further levels are ahead near the recent swing high near $46 and at $51, while support below $38 is found near $34.50 and between $30 and $30.50, and traders could hold on to their long positions here.

Ethereum and Ripple Little Changed Following Session

XRP/USDT, 4-Hour Chart Analysis

While Ripple avoided a break below the $0.30 support/resistance level, it remains stuck in a short-term downtrend and well below the crucial $0.32 resistance level that it tested during Friday’s spike. XRP continues to be very weak compared to its peers, and that points to a likely test of the $0.28 and $0.26 levels in the coming weeks. Above the short-term trendline and the primary resistance zone, strong levels are also ahead near $0.3550, and $0.3750.

ETH/USD, 4-Hour Chart Analysis

Ethereum failed to maintain the relative strength that it showed in the aftermath of Friday’s spike, and that is a negative sign for the whole segment. ETH continues to hover around the $120 support/resistance level, and although it remains well above the primary support level near $112, the long-term picture remains negative.

With that in mind, traders should remain cautious with new positions here, even as our trend model is on a short-term buy signal. Above $120 another strong resistance level is ahead near $120, while further support is found in the $95-$100 zone. The prior bear market low near $80 is also likely to be tested in the coming weeks, barring a broad reversal in the segment.

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.

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.