Crypto Update: Coins Pull Back As Ethereum Spikes Above $260

After another crazy and bullish day in the cryptocurrency segment, which was highlighted by the spikes in Ripple and Ethereum, the majors entered a pullback today in early trading. The previously leading Bitcoin has been consolidating for two days, but the other majors remained firm and BTC is also holding up well following its parabolic advance.

The short-term uptrends remain intact in the segment, but with the bearish long-term picture and the overbought short-term momentum readings in mind, traders shouldn’t enter new positions here. That’s true even in light of Ethereum’s surprising break-out above the strong $230 level, which led to a push towards $275, maintaining the bullish momentum in the market.

Ripple, together with most of the smaller coins triggered a short-term sell signal in our trend model, following their sharp rally, and now all of the top coins are on sell signals again, even the rally could still continue, fueled by short-covering across the board.

BTC/USD, 4-Hour Chart Analysis

Bitcoin only managed to score a marginal new high yesterday, but the most valuable coin is holding up above this week’s pullback, and with that, the short-term uptrend remains intact. That said, given its recent parabolic move, and the fragile long-term setup the coin is suspect to a deep sell-off as soon as the coming days, and given the downside risks, traders shouldn’t enter new positions here.

The recent swing high is ahead as primary resistance, while above that, the next major zone is near $9200, while support is still found near $7800, $7600, and $7000, with the structurally important level at $5850.

XRP/USD, 4-Hour Chart Analysis

Ripple spiked briefly above the upper boundary of the long-term support/resistance zone between $0.42 and $0.46 before plunging back below $0.40 yet again. The coin quickly got overbought due to the wild rally, and with the segment-wide trends in mind, traders should stay away from entering new positions here.

While the rally might continue, and the short-term uptrend is intact, given the extended counter-trend move in the segment, odds are on the side of ears here, especially from a long-term perspective. Above $0.46, the resistance levels are ahead near $0.51 and $0.54, while support below $0.40 is found near $0.3750, $0.3550, and just above $0.33.

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ETH/USD, 4-Hour Chart Analysis

Ethereum extended its rally despite its persistent relative weakness in recent months, and it even managed to test the $275 level following a furious short-covering rally yesterday. Despite the coin’s lofty gains, our long-term outlook hasn’t changed for Ethereum, and we expect the coin to reverse most of its recent gains soon.

That said, the short-term bullish momentum could still carry ETH higher, but in light of the overbought momentum readings, traders shouldn’t enter new positions here. The $200 support remains the line-in-the-sand level, and the bearish long-term setup remains intact in the coin’s market. Below that, further long-term levels are found near $180 and $160, while above $275 further resistance is ahead near $300 and $330.

LTC/USD, 4-Hour Chart Analysis

Despite its relative weakness this week, Litecoin managed to briefly climb above its high from April and the $100 price level, but for now, the breakout failed, and with that, our trend model remained on sell signals on time frames. The coin remains above the primary support zone between $85 and $90, and the rising short-term trend is also intact despite today’s pullback.

We still expect the coin to, at least, retrace most of the counter-trend move, and with that and the overbought short-term picture in mind, traders and investors still shouldn’t enter new positions here. Below $85, support is now found between $72.50 and $75, with a crucial long-term zone at $64, while above $100, the next level is resistance is ahead near $110.

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.