Crypto Update: Coins Flatline as Bitcoin Holds Steady

The cryptocurrency segment settled down following the Bitfinex-induced plunge, with the majors all holding up above their weekly lows. While the current stability, and especially BTC’s relative strength is encouraging, we haven’t seen signs of bullish momentum that would warrant a constructive stance towards the top digital currencies.

With long-term technicals still being clearly bearish and the short-term trends also being overwhelmingly negative traders should remain defensive towards the segment, and our trend model remains on sell signals on both time-frames for all of the majors. We continue to pay close attention to Ethereum as the second largest coin has been a good indicator of the overall direction in the segment, even in the face of BTC’s relative strength.

While the weekend might remain quiet, the majors remain in a peculiar short-term technical position, and a move below the initial support levels could trigger another steep sell-off, so downside risks remain dominant in the market.

ETH/USD, 4-Hour Chart

Ethereum is holding up well above the $145 support thanks to today’s drift higher, but the coin is still way below the line-in-the-sand $160 resistance, leaving are trend model firmly on sell signals on both time-frames. ETH saw a steep drop in trading volumes following the sharp sell-off, and for now the hope of another leg higher in the counter-trend move is still alive.

That said, the bear market is likely to continue, despite the strength of Bitcoin and the current stability in altcoins, and even in the case of a recovery, only short-term positions should be considered. Above $160 further strong resistance is ahead near $180, while below the initial zone support zones are found near $130 and $112.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still trading below its previous swing high near $5400, but it remains among the strongest coins from a short-term technical perspective, with the $5050 level being in no danger here. While the current pattern qualifies as a bullish consolidation, our trend model remains on sell signal on both time-frames, due to the bearish long-term forces and the segment-wide weakness.

A recovery above the initial resistance zone could trigger a renewed buy signal in BTC, as far as the short-term time-frame is concerned, but a move below $5050 would likely lead to a test of the $4840 and $4450 support levels. Below those further support is found near $4200 and between $4000 and $4050, while the next major resistance zone is ahead near $5850.

Ripple and Litecoin Trading in Holding Patterns


XRP/USD, 4-Hour Chart Analysis

Ripple continues to be the weakest among the top coins, trading below the $0.30 level and threatening with a move below $0.28 and a test of the August low near $0.26. The weak bounce left the short-term chart wounded, and our trend model remains firmly on sell signals on both time-frames.

The $0.30 and $0.32 levels are ahead as strong resistance, and we continue to expect the bear market to resume, but a broad recovery could even lead to a rally up to $0.3550 and $0.3750. Our trend model is on clear sell signals on both time-frames, and traders and investors should still stay away from the coin.

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade below the key support zone between $72.50 and $75, and despite it’s limited losses during the market-wide sell-off, it failed to show relative strength today. The coin is stuck below the previousrrising trend channel, but there is still a chance that the counter-trend will resume.

The coin remains on clear sell signals on both time-frames in our trend model, and despite it’s prior strength, traders shouldn’t ebter new positions here. Initial support is still found near $64, with the next level below that at $56, while further resistance is ahead in the zone between $85 and $90 and just above $100.

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.