Crypto Update: Coins Test Support Levels Again as Selling Resumes
The major cryptocurrencies started out the week in a bearish fashion for the second time in a row, and although yesterday, we saw a broad-based bounce in the segment, the decline that started last week is still likely to resume. The relative strength landscape has been virtually unchanged for days among the top coins, with Bitcoin holding up well compared to the weak-looking major altcoins.
EOS/USD, 4-Hour Chart Analysis
Ethereum and Ripple are showing clear signs of weakness, but the previously leading coins, such as Litecoin, EOS, and Dash also turned sharply lower today, and Bitcoin Cash that performed relatively well in recent days, also gave back a large chunk of its gains.
Our trend model remained on sell signals on both time frames segment during the weekend consolidation, as the long-term term setup remains hostile in the segment, and the counter-trend move that started in February could already be rolling over for good. With that in mind, traders and investors still shouldn’t enter positions here, and even in the case of a powerful and broad-based reversal, only short-term positions should be considered, using strict management rules.
BTC/USD, 4-Hour Chart Analysis
Bitcoin continues to support the whole segment with its relative stability and the most valuable coin is holding up within its consolidation pattern, despite today’s selloff. BTC fell below the $5050 support today in late trading, but it remains well clear of its recent swing low, leaving the door open for an anotehr push higher.
That said, in light of the market-wide trends and the coin’s long-term technicals, traders should even stay even from entering short-term trades here, as downside risks are high and our trend model is also on sell signals on both time-frames. Initial resistance is still ahead near $5200, while below the short-term $4800 level, further support is found near $4450, $4200, and in the $4000-$4050.
ETH/USD, 4-Hour Chart Analysis
The relative weakness of Ethereum continues to be apparent, with the coin spiking below $160 today, before recovering above the key level. Following today’s rally attempt, ETH is in a precarious technical situation as a sustained dip below $160 would likely mean the end of the counter-trend rally, which would be bearish for the whole sector, even considering Bitcoin’s stability.
For now, the coin is on clear sell signals on both time-frames in our trend model, and we are likely in for a crucial couple of days for Ethereum. Below the $160 level, the $145 and $130 could stop the bleeding, but should the whole segment roll over, even the $112 level might be retested very soon. In case of a much less likely recovery, the $180 and $200 levels could be in play, but traders shouldn’t enter new positions here.
Rally Attempt Fails in Litecoin Too as Ripple Continues to Struggle
LTC/USD, 4-Hour Chart Analysis
While Litecoin almost reached the $85 level today in early trading it quickly gave back all of its gains, getting close to the crucial $72.50-$75 zone, threatening with a break-down yet again. From a broader perspective, we are still only a correction within the counter-trend rally, which could still resume, but trades should the bear market in mind and remain cautious even concerning the relatively stronger coins. with the likely test of the next strong support zone near $64.
Our trend model remains on sell signals on both time-frames, and a move below $72.50 would likely trigger a test of the support zone near the $64 price level. Below that, the next major zone is found near $56, while resistance is ahead in the $85-$90 zone and just above $100.
XRP/USDT, 4-Hour Chart Analysis
Ripple confirmed its relative weakness yet again, breaking sustainably below its initial support level, near $0.32, leading the way lower from a technical perspective. As the coin failed to build even a short-term uptrend in the recent bullish market, trades should avoid it and focus on the stronger coins even in the case of a broad recovery in the coming days.
Odds still clearly favor the continuation of the bear market, with a likely dip below $0.30 and $0.28 in the coming weeks, which could put the August low near $0.26 in danger as well. On the other hand, an unlikely bullish trend would face resistance near $0.33, $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.