Crypto Update: Coins Stage Encouraging Recovery

The major coins are having a positive session, so far with the market recovering well after Monday’s breakdown, avoiding steeper losses in the face of the bearish long-term setup in the segment. Volatility also declined again in recent and as some of the largest coins like Bitcoin and Ripple regained most or almost all their losses, the outlook is slightly better than at the beginning of the week.

That said, our trend model is still showing an overwhelmingly bearish picture, and traders should remain cautious with new positions until at least a confirmed short-term trend change. On a positive note, the relatively weaker coins also bounced back in recent days, and although a bullish leadership is still not developing, the imminent danger of another leg lower in the destructive bear market passed, for now.

LTC/USD, 4-Hour Chart Analysis

One of the bearish leaders, Litecoin managed to stay above the bear market low near $47 after plunging below the key $51 support, and today the coin is testing the breakdown level again. While even a short-term trend change is far from being confirmed, a durable recovery above $51 would be a great sign for the coming weeks. Below $47 the next major support level is found near $44 further resistance is still ahead at $56 and $59.

BTC/USD, 4-Hour Chart Analysis

Bitcoin held the $6275 support during the week, and now the most valuable coin is trading near the lower boundary of last week’s narrow trading range. Despite the recovery, our trend model is still on a short-term sell signal, and a durable move above $6500 would be needed for an upgrade.

Given the long-term picture in the segment, odds still favor a move towards the bear market low in the coming period, but for now, even the weaker $6000 support is safe. Further levels are found near 45850 and between $5000 and $5100, while resistance is ahead at $6750 and $7000.

Still No Sign of Bullish Momentum Among Major Altcoins

XRP/USD, 4-Hour Chart Analysis

Ripple has been showing relative strength all week, and it managed to climb back above the key long-term support zone between $0.42 and $0.46 together with the broader market. XRP is the closest to an upgrade in our trend model among the majors, but the short-term sell signal is still intact given the lack of bullish momentum.

Traders and investors still shouldn’t enter new positions here, with the long-term outlook being just neutral. Further support levels are found near $0.375 and $0.355, while strong resistance is ahead near $0.51, $0.54, and $0.57.

ETH/USD, 4-Hour Chart Analysis

Ethereum has been performing in line with the segment average this week, and that’s already an improvement following an extended period of relative weakness. The second largest coin is back near the $200 price that has been in focus for weeks now, and the coin avoided a test of even the $180 level while holding up well above the bear market low near $170.

While ETH is not out of the woods by any means, and our trend model remains on sell signals on both time-frames, the current stability is a positive sing for the coming weeks. Strong resistance is still ahead at $235 and $260, while the coin is quickly closing in on the broad declining trend lines currently found between $215 and $230.

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.

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.