Crypto Update: Coins Pump and Dump in Frantic Weekend

The cryptocurrency segment saw its most active days since the April break-out, with the skyrocketing Bitcoin leading the way higher. After taking out the $6000 level, the most valuable coin ripped higher to top out near the $7650 resistance level. Despite BTC’s surge, the gains among the main altcoins were much less impressive from a technical perspective, but Ethereum did trigger a short-term buy signal in our trend model after breaking-out above $175 level.

Ethereum tested the $200 level, taking out its April high, while the other majors all remained below their recent swing highs, as the rally failed to gain broader traction in the segment. Despite yesterday’s surge, even BTC is still in a bearish long-term setup, and after turning neutral yesterday, our trend model is now on short-term sell signal in light of today reversal.

Now, all of the majors are on short-term sell signals, while the long-term signals also remain bearish, and although the counter-trend move might still resume, following today’s reversal, even the immediate outlook is negative.

BTC/USD, 4-Hour Chart Analysis

Bitcoin’s rally gone parabolic this weekend, boosted by the further escalation in the US-Chinese trade war during the weekend, but with the parabolic move, the counter-trend move is very likely over. While a retest of the highs is possible, we still don’t expect a durable break-out in BTC, and a pullback below the structurally important $5850 could be ahead in the coming days.

Our trend model is now on sell signals on both time frames, and traders shouldn’t enter even smaller positions in light of the recent price action. Support levels above the crucial long-term zone are now found near $6250 and $6500, while below the $5850 level, further strong support is found near $5400.

ETH/USD, 4-Hour Chart Analysis

Ethereum managed to form a short-term swing low ahead of the weekend, and Bitcoin’s surge led to a break-out to a new yearly high in the coin’s market. ETH rallied up to the $200 resistance and as it failed to push above it sustainably, our trend model switched to a short-term sell signal, as the bearish long-term forces are more and more likely to overwhelm the short-term trend.

Despite the sustained rally of the previous months the long-term pattern remains bearish, and today’s reversal is a strong warning sign for bulls. Above $200 the next major resistance zone is ahead near $230 while support below $180 is found near $160 and $145, and traders shouldn’t enter new positions here.

Weakness Persists Among Altcoins

LTC/USD, 4-Hour Chart Analysis

Besides Bitcoin, Litecoin was on a sustained short-term buy signal in our trend model among the top coin, but in light of today’s reversal and its relative weakness, the coin is now on sell signal as well. LTC topped out below its previous swing high and now it’s trading near the bottom of the strong $85-$90 support/resistance zone.

We still expect the bear market to resume in LTC, and although the counter-trend move could still resume, with a re-test of the weekend high being possible here, the downside risks are increasing and now traders and investors shouldn’t enter new positions here. Below the $85 level, support is now found between $72.50 and $75, with a crucial long-term zone at $64, while further resistance is ahead just above $100 and near $110.

XRP/USD, 4-Hour Chart Analysis

While the broad rally caused another spike in XRP’s market, the relatively weak coin failed to build on its momentum and quickly fell back below the $0.32 level. Due to the coins apparent weakness, traders and investors should still stay away from entering positions here, and odds continue to favor antoerh leg lower in the bear market.

Our trend model remains on sell signals on both time-frames, and although there are several strong support levels just below the current price level, near $0.30, $0.28, and $0.26, the strong long-term selling pressure means that a dip below all of those is likely in the coming weeks. Above $0.32, resistance levels are found just above $0.33, near $0.3550, and $0.3750.

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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.