Crypto Update: Coins Spike Lower But Bulls Fight Back

The cryptocurrency segment is having a very active day so far, and while the session started out in a decisively bearish fashion, the major coins rebounded in US trading. The top coins all spiked lower in early trading, with BTC leading the way sell-off, getting close to the lower boundary of its dominant broad consolidation patter, The major altcoins all followed BTC lower, but the most valuable coin avoided a key breakdown, and the segment staged an XRP-led rebound.

The bounce kept bulls’ hopes alive regarding the fate of the current counter-trend rally, but we need to see further evidence of technical strength before turning more bullish, as long-term technicals remain clearly negative. The leader of the rally attempt, ETH, got close to the key $200 level, but it managed to hold up above it, and thanks to the rebound, its short-term uptrend is intact. While the altcoin bear market is still likely to resume in the coming weeks, today’s bounce could trigger another short-term upswing in the segment.

BTC/USD, 4-Hour Chart Analysis

BTC tested the trendline support of its broad triangle consolidation pattern in early trading, and while it avoided a major technical breakdown, it remains stuck below the $10,000 level. A bearish move out of the formation would be a warning sign for the whole segment, but a failed breakdown could trigger a strong rally, so the coming days might be crucial for the coin.

The coin is still on a long-term sell signal and a short-term buy signal in our trend model, with support zones now found near $9.200, $8,400, and $8,200, and with resistance zones ahead near $10,000, $11,300, and $13,000.

ETH/USD, 4-Hour Chart Analysis

ETH erased the early Bitcoin-led plunge, together with most of the top altcoins, but it’s back in the narrow trading range that developed this weekend after the coin broke below its steeply rising short-term trendline.

The line-in-the-sand $200 price level remains in focus, and given the segment-wide weakness, a move below that could trigger a volatile sell-off. Our trend model is on a short-term buy signal and a long-term sell signal, with support below the initial level found between $180 and $185, and with resistance ahead near $230 and $260.

Ripple  Bounces Hard As Litecoin Defends Trendline

XRP/USD, 4-Hour Chart Analysis

Ripple is experiencing another of its trademark spikes higher after breaking below $0.28 during the weekend, and the coin is back above $0.28, despite getting close to the $0.26 support in early trading. Today’s bounce is once again a suspicious move in XRP’s market, and while the coin could show bullish follow-through, the odds of a sustained rally remain low.

The coin is on sell signals on both time-frames in our trend model, with resistance zones are near $0.30, $0.32, and just above $0.33, and with support zones found near $0.26 and $0.23.

LTC/USD, 4-Hour Chart Analysis

Litecoin traded in relatively narrow range compared to its closest peers today, as the strong initial overhead resistance and the weak rising trendline limited volatility in the coin’s market. That said, LTC remains weak from a technical perspective, and another leg lower in the ongoing downtrend remains likely.

The coin is still on a long-term sell signal in our trend model, but the short-term buy signal is also in place. Resistance zones are ahead near $75, between $85 and $90 and near $100, while key support zones 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.