Crypto Update: Coins Extend Bounce as Selling Pressure Eases

The top cryptocurrencies continue to trade with a bullish short-term bias, and thanks to the two-day rally, the technical picture improved across the board. The odds of a failed breakdown pattern increased in the segment, with Bitcoin clearly recovering above the prior low, joining Litecoin in the move, even as most of the major altcoins continue to trade below the panic lows.

Despite the encouraging short-term shift in the market, given the still overwhelmingly bearish long-term outlook traders should still only consider ultra-short-term positions, as even a short-term trend change is not confirmed yet. That said, we still expect a larger-scale bounce in the coming weeks, in particular after the clear weakening of the bearish momentum following the damaging rout of the past weeks, since sentiment became extremely negative.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is now testing the steeply declining short-term trendline after successfully rallying above the key $4000-$4050 level which marked last week’s initial panic bottom. The coin is now on a short-term buy single in our trend model, but as we pointed out before, the long-term setup still only justifies ultra-short-term long positions in the most valuable coin, with strict management.

The coin already got close to the next, weaker resistance level near $4450, and above the $4000 level, bulls are in control of the market, at least from a short-term perspective. The next major resistance zone is ahead between $5000 and $5100, while support is found at $3600 with a crucial long-term zone near $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still signs of relative weakness despite the fact that the coin managed to recover above the $120 level. The declining short-term is still clearly intact, and given the coins weakness, our trend model is only neutral with regards to the short-term time-frame while being clearly bearish long-term.

With that in mind traders should still stay away from the coin until a confirmed short-term trend change, with primary support still found in the $95-$100 zone, and with further resistance ahead near $130, $150, and $160.

Litecoin Hits $35 as Ripple Struggles With $0.40 Level Lead

XRP/USDT, 4-Hour Chart Analysis

The second largest coin by market cap, couldn’t follow Bitcoin to a new short-term swing high, as the rally in XRP faded near the $0.40 level. Despite the failed short-term move and the slight relative weakness, the coin’s relatively bullish long-term position remains safe.

Ripple is still trading above both the $0.355 and $0.375 support/resistance levels, while being stuck below the key long-term $0.42-$0.46 zone, and traders and investors still shouldn’t enter new positions here, with further support levels found at $0.32 and $0.30.

Litecoin/USD, 4-Hour Chart Analysis

Litecoin continues to outperform the broader market from a short-term technical perspective, and it remains well above the prior bear market low near $30 after triggering a short-term buy single yesterday.

The coin rallied up to the $34.50 resistance level as expected, and despite its clear strength, the long-term downtrend is clearly intact and traders should continue to use strict risk management. Further resistance is ahead at $38 while the support below $30 is found near $26.

Stellar/USDT, 4-Hour Chart Analysis

While Stellar joined the broad rally in the segment, it remains in a relatively weak technical position, trading well below the key swing low near $0.18 and the long-term support/resistance zone just above that level. Traders and investors should still stay away from the coin as the key long-term breakdown is still intact, and below $0.195, the coin is in a confirmed bear market.

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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.