Crypto Update: Coins Turn Volatile as Bulls Fight For Control

The major coins had a wild session with several twists and turns following a steep sell-off in Asian trading. While Bitcoin failed to retain its relative strength, Ethereum and Litecoin saw the most trading activity among the top digital currencies, with ETH getting very close to the $200 level again, and with LTC nearing the key $85 price level. BTC dipped as low as $9600 before recovering in late trading, and while a major breakdown has been avoided again in the segment bears continue to being control of the market from a broader perspective.

The trading ranges that developed following last week’s plunge are intact and given the extent of that move, the consolidation period might still continue, but odds still favor a bearish consolidation once the correction runs its course. While none of the majors violated their recent swing lows, volatility picked up substantially today, and that could point to a significant move in the coming days, and give the segment-wide pressures, downside risks remain prominent here.

Our trend model remains on sell signals on both time-frames for the top coins, and barring a concerted move above the weekend highs, traders shouldn’t enter new positions even in the relatively stronger coins.  The next major swing could determine the trend of the coming weeks and even months, so traders could be in for a crucial and likely heated few days in the segment.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been trading below the $10,000 price level after drifting lower ever since the weekend rally attempt, but for now, the previous swing low and the key support zone near $9200 is still in no danger. The coin has been less volatile than the major altcoins today, but it also failed to show relative strength, and it remains well shy of another short-term buy signal, for now.

With the coin still hovering in the ‘no-man’s-land’ between $9200 and the key resistance zone near $11,300, further choppy, low-momentum trading is possible in the coming days, but odds still favor a bearish move, especially in light of the segment-wide pressures.  Key support levels are found near $9,400, $9200, and near $8,400, while resistance above $11,300 is ahead near $13,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum got very close to the $200 level today following the steep sell-off fell, but it managed to recover above $210 again, avoiding a possibly damaging breakdown. The coin now could be headed to another test of $230, the level below $210 today in early trading, but so far, it remained in safe distance of the $200 support level that stopped last week’s bounce, but despite today’s recovery the coin remains on clear sell signals on both time-frames in our trend model.

We continue to expect a move below $200 after the correction runs its course, even though further choppy consolidation is possible here. Below the $200 level, further strong long-term support zones are found near $180, and $160, while above $230, further zones are ahead near $260 and $275, and traders should still avoid entering new positions.

Litecoin Covers Wide Trading Range as Ripple Holds Above $0.30

XRP/USD, 4-Hour Chart Analysis

Ripple remained relatively stable today, despite the wild intraday swings in the market, and it managed to clearly remain above the key long-term $0.30 support/resistance level, despite the bearish pressures. That said, XRP is far from being out of the woods, and while further consolidation is possible here and, in the case of a broad recovery rally, a larger-scale bounce is also in the cards, we continue to expect the bear market to resume soon.

Our trend model remains on sell signals on both time-frames, and even if a broader rally attempt triggers a renewed buy signal, traders should only consider positions in the relatively stronger coins. Initial resistance is ahead near $0.33, with further levels near $0.3550, and at $0.3750, while support zones below $0.30 are found near $0.28 and $0.26.

LTC/USD, 4-Hour Chart Analysis

Litecoin had a very hectic day, trading as low as $86 in early trading and almost testing $100 in the wake of a strong late-day bounce. Despite the volatility, the technical setup remains unchanged in the coin’s market, with the post-plunge trading range being intact. The coin is now back above the $85-$90 support/resistance zone, but with last week’s high being well above the current price level, LTC remains on sell signals on both time-frames in our trend model.

The volatile consolidation could continue in the coming days, but odds still favor a move below $85 soon, with a likely test of the previous swing low and the $75 support. Below $75, another strong support zone is found at $64,  while above $100, resistance zones are still ahead between $110 and $112 and near $125.

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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.