Crypto Update: Coins Turn Volatile As Fed Unleashes Mother-Of-All Bailouts

The major cryptocurrencies are having a highly volatile session as investors are trying to gauge the effects of the Fed’s unprecedented intervention announced before the opening of the U.S. open. The Central Bank pledged to buy literally an unlimited amount of bonds, including corporate and municipal bonds, virtually taking over the U.S. credit markets due to the COVID-19 crisis. The announcement caused a spike higher in risk assets across asset classes, and the major coins also popped briefly higher as the dollar tanked.

Despite rally attempt, the majors are still near the key support/resistance levels that have been in focus in recent days, and the technical setups remain unchanged with no confirmed swing lows.  BTC’s continued relative strength is a positive sign here, but even as our trend model remains mixed on the short-term time-frame, traders should remain cautious due to the still large downside risks.

BTC/USD, 4-Hour Chart Analysis

BTC briefly traded below the key $5,550 support level today, but it surged higher together with global risk assets following the Fed’s announcement and settled down well above its pre-announcement level. The coin remains very strong from a technical perspective, and the historic intervention should support it, long-term, but volatility could remain very high in the coming weeks, and traders should remain defensive with regards to short-term positions.

BTC is on a short-term buy signal, while being on a long-term sell signal in our trend model, with support found between $6000 and $6100 and near $5850, and with resistance is ahead near $6,500, $6,750 and $7,000.

ETH/USD, 4-Hour Chart Analysis

ETH spiked as low as $120 today in early trading before surging higher to hit a high of $138 following the Fed’s announcement. The coin settled down near the key long-term $130 level, but for now, it hasn’t triggered an upgrade in our trend model, as the volatile swings left the technical setup unchanged.

ETH is now on sell signals on both time-frames in our trend model, with major support zones found near $120, and between $95 and $100, and with resistance zones ahead between $130 and $135 and near $145 and $160.

LTC Fights For $38 As XRP Remains Weak

XRP/USD, 4-Hour Chart Analysis

XRP has been showing weakness yet again today during the post-Fed surge, and it failed to hold on to its gains, setting stuck near the key long-term $0.15 level. The coin is still trading within its post-crash consolidation range, and while its prior low is not in danger, traders should still stay away from it until we see evidence of technical strength.

Our trend model is still on sell signals on both time-frames, with support zones found near $0.15, $0.13, and $0.11, and with resistance zones ahead near $0.1650, $0.1750, $0.19, and $0.20.

LTC/USD, 4-Hour Chart Analysis

LTC spiked above $40 together with the broader market and it’s now fighting to stay above the key $38 level following the pullback. The rally hasn’t changed the technical setup in the coin’s market, but it’s now very close to its declining long-term trendline again. The coin is relatively stable compared to most of the major altcoins, but without further evidence of technical strength, traders shouldn’t enter new positions.

LTC is on sell signals on both time-frames in our trend model, with support zones found near $34.50, $30, and $26.50, and with resistance zones ahead near $38, $44, $51, and $64.

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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.