Crypto Update: Coins Survive Break-Down Attempt, but Setup Still Bearish

Yesterday, the major cryptocurrencies experienced a quick sell-off below support and a rapid reversal, but the “glitch” (or manipulation attempt) didn’t change the overall technical setup. The top coins are back in their trading ranges that have been dominant for over a week, and the short- and long-term downtrends are all intact. While the recovery might be a sign of an impending short-term bottom, for now, there is no technical evidence of a sustained rally, and traders and investors should still stay away from entering new positions here.

Correlations are still high and although volatility and trading activity is low, the lack of bullish momentum continues to point to the continuation of the bear market. On a positive note, the smaller coins also stayed above their respective primary support levels, but until a broad move out of the range, the immediate outlook remains rather neutral. That said, with still no sign of a developing bullish leadership, odds continue to favor a move towards the bear market lows in the coming weeks.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still stuck below the key $3600 support despite the failed breakdown and the quick recovery and although the most valuable coin continues to be relatively stable, the overall setup remains bearish. The next resistance level near $3850 is still out of reach, and our trend model is on sell signals on both time-frames.

Barring a move above primary resistance, traders and investors still shouldn’t enter positions here, and we expect a test of the $3250 level and likely the $3000 support as well in the coming weeks, with further strong resistance is ahead between $4000 and $4050.

ETH/USD, 4-Hour Chart Analysis

Ethereum also recovered from the sudden dip below the short-term $112 support level, but it continues to trade below $120 with the more important $130 resistance being in no danger despite the recovery.  ETH continues to be relatively weak compared to its most important peers, and we still expect a move towards the key support zone between $95 and $100 and the bear market low near the $80 level. Further resistance zones are ahead at $145, $160, and near $180, and our trend model is still on sell signals on both time-frames.

Litecoin Shows Strength but Ripple Continues to Lag

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to be the weakest among the top coin from a technical perspective, trading below the key $0.32 level and failing to show signs of bullish momentum after the failed break-down. A move below $0.30 looks very likely, and just a move above $0.3550 would change the bearish short-term setup. Further resistance is ahead near $0.3750 and in the key long-term zone between $0.42 and $0.46, with resistance found near $0.28, and our trend model remains on sell signals on both time-frames.

LTC/USD, 4-Hour Chart Analysis

With the top 3 coins all being suspiciously weak, the fact that Litecoin is showing relative strength since the failed break-down is not a significant improvement especially as the short-term trading range is also intact.

With that in mind, LTC remains on sell signals on both time-frames in our trend model, and until we see more signs of technical strength, traders should stay away from the coin. Strong support is still found in the $30-$30.50 zone and near the $26 level, with resistance ahead near $34.50, $38, and $44.

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.

 

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.