Crypto Update: Coins Resume Slide as Bitcoin Rally Falters, Look Out Below?

After yesterday’s severely two-sided session, at least from a technical perspective, the top coins all turned lower in a concerted fashion today. Bitcoin was the undoubted leader of the bounce yesterday, but the most valuable coin also lost its mojo today in European trading and now it gave back most of its gains, similarly to its largest peers.

The top altcoins are threatening or already moved below their recent lows, as, despite the oversold bounce, selling pressure remains strong in the segment. The key levels to watch are $200 in ETH’s market, $85, $10,000 in BTC, and $0.30 in the relatively weak XRP. With the key short-term momentum indicators being in oversold territory, we could be in for a very volatile period of trading in the coming days.

With downside risks still being prominent and with our trend model being on sell singles on both time-frames, traders should stay away from entering new positions here until we see broad signs of stability. The smaller altcoins are even in worse shape than their larger peers, and that reinforces the negative outlook for the segment, even though BTC’s relative strength still keeps bulls’ hope alive regarding the larger-scale rally.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is back near the $10,000 level, and the coin looks ready to test the recent swing low despite yesterday’s encouraging rally attempt. BTC is still in a much better technical shape than the other top coins, and a new short-term downtrend is not yet confirmed, although the steep losses among the major altcoins make a breakdown very likely in the coming weeks.

Our trend model is still on sell signals on both time-frames, and even considering the coin’s relative strength, the traders should avoid entering new positions here. The key level to watch in case of a breakdown is found near $9,200, and a sustained move below that would be a major blow for crypto bulls. Below $10,000 further support zones are found near $9400 and $8400, while resistance is still ahead near $11,300 and $13,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum continues to show relative weakness, although compared to the struggling smaller altcoins, as it is holding up slightly better. After failing at $230 yet again, the coin is now below its recent swing low, not counting the limited flash crash, and the test of the $200 level seems inevitable at this point. A move below that level would likely trigger another wave of selling, with the $180 and $160 levels being in sight in the coming weeks.

Our trend model is on clear sell signals on both time-frames, and the freshly formed short-term downtrend remains intact. The segment-wide pressures and the long-term technical setup point to significant downside risks even at the current levels so traders shouldn’t enter new positions here, but in case of an unlikely recovery, resistance levels above $230 are still ahead near $260, $275, and $300.

Ripple Test $0.30 Again, as Litecoin Nears Swing Low

XRP/USD, 4-Hour Chart Analysis

The key long-term support zone near $0.30 is in danger in XRP’s market yet again, and given the broad weakness in the segment, the weakest coin is unlikely to hold the crucial zone this time around. The coin turned lower off the $0.32 level after yesterday’s bounce, and even though it has been showing signs of relative stability, the longer-term bearish pressures will likely overwhelm the effects of the nearby support zone soon.

We still expect the coin to resume its bear market soon, and our trend model remains on sell signals on both time-frames, with significant downside risks. Below $0.30, further support levels are found near $0.28 and $0.26, while resistance is still ahead near $0.3200, $0.33, $0.3550, and $0.3750, and traders shouldn’t consider even speculative short-term positions here.

LTC/USD, 4-Hour Chart Analysis

Litecoin is trading right at the lower boundary of the $85-$90 support zone, and a breakdown looks likely given the widespread weakness in the segment, and the worrying weakness of the previously leading altcoins. While the coin is still holding on to most of its larger-scale gains, the steep short-term downtrend and the still bearish long-term technicals suggest that further losses are ahead.

Below the initial support zone, the next level of interest is found near $75 and a test of that level now seems likely in the coming days.  Our trend model is still on clear sell signals on both time-frames, and while BTC’s strength is keeping bulls’ hopes alive, traders shouldn’t risk new positions here. Below $75, further support is found near $64, while resistance above the initial zone near $100 is ahead between $110 and $112, and near $125 and $140.

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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.

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.