Crypto Update: Coins Pull Back As Furious Rally Runs Out Of Steam

The top digital currencies all lost ground today after yesterday’s mixed showing, as the leader of the recent rally, Ethereum sold off and dipped below its recent swing high. BTC also failed to break out above its prior narrow trading range, even though it managed to hold up above the $10,000 level amid the segment-wide drop. The other majors were all under pressure ahead of the weekend, with Ripple getting stuck below the $0.30 level, and Litecoin falling below $75 again.

While the short-term uptrends remain intact despite the pullback, and our trend model continues to be on short-term buy signals concerning the top altcoins, the bearish long-term picture is still dominant, and traders should remain cautious here. With none of the smaller coins showing meaningful strength, the altcoin bear market is still likely to resume, and investors should continue to apply strict risk management rules.

BTC/USD, 4-Hour Chart Analysis

Today, BTC has been trading in the same range that has been in focus for weeks today, as yesterday’s failed breakdown wasn’t enough to trigger a move out of the broad declining triangle consolidation pattern. The coin remains relatively strong from a broader perspective, but a move below the dominant formation could trigger a major downswing.

Our trend model is still on a long-term sell signal, with further support still found near $9.200, $8,400, and $8,200, while resistance zones are ahead near $11,300, and $13,000.

ETH/USD, 4-Hour Chart Analysis

The short-term uptrend remains intact in ETH’s market despite today’s pullback, and the coin continues to be well above the key $200 level, even though it failed to test the $230 resistance after scoring a new swing high yesterday. The coming days could be crucial for ETH and the whole segment, and should the rally falter, the downtrend could quickly resume.

The short-term buy signal and the long-term sell signal in our trend model are both in place, and support below the initial $200 level is still found between $180 and $185 zone, while resistance is ahead near $230 and $260.

Ripple Fails at $0.30 as Litecoin Still

XRP/USD, 4-Hour Chart Analysis

While Ripple showed relative strength for a brief period, the coin failed to join ETH’s rally yesterday and today, it continued to show relative weakness, getting close to the $0.28 level again. For now, the short-term uptrend is intact, but a dip below $0.28 would be a strong bearish signal.

Our trend model remains on a clear long-term sell signal, and the coin is likely to resume its bear market in the coming weeks despite the bounce. Strong resistance zones ahead near $0.30, $0.32, and just above $0.33, and with support zones also found near $0.26 and $0.23.

LTC/USD, 4-Hour Chart Analysis

Litecoin formed s similar pattern to XRP today, and it’s also showing relative weakness compared to ETH, on the short-term time-frame, and to BTC from a long-term perspective. The coin is now trading below the $75 level again, and a move below $70 could trigger another major sell-off.

The coin is still on a long-term sell signal while just holding on to its short-term buy signal, with resistance zones above $75 still ahead between $85 and $90 and near $100, while support zones below $70 are found near $64 and $56.

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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.