Crypto Update: Counter-Trend Rally Continues

The bullish period continues in the cryptocurrency segment, and most of the majors hit 3-week highs yesterday, pushing the total value of the market close to the $140 billion level. Now, almost all of the top coins are on short-term buy signals, but the long-term picture remains overwhelmingly bearish, and traders and investors should remain cautious and use strict risk management when trading on the long side here.

Bitcoin briefly topped the $4000-$4050 resistance zone, Ethereum got close to the $120 level while Ripple traded above the $0.3750 level before turning lower, and the short-term uptrends remain intact in the   segment and although the short-term momentum indicators are slightly overbought, we expect the rally to continue in light of the still oversold broader picture following the rout of the past months, after the current brief consolidation phase ends.

BTC/USD, 4-Hour Chart Analysis

Bitcoin rallied up to the primary resistance zone together with the broader market before entering a short-term consolidation, and the coin is now trading near the $4000 price level, right at the $4000-$4050 zone.

While the structural breakdown level near $5850 is very far, the rally could stretch to the $4450 or even the less likely $5000-$5050 zone, boosted by the very negative sentiment and the deeply oversold long-term momentum readings. Primary support is now found near $3600 with further levels at $3250 and $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum pushed up the $120 resistance zone before pulling back, and the coin got overbought from a short-term perspective, and we could see a test of the $95-$100 before the rally likely continues. The coin is still on a short-term buy signal in our trend model, while being on a clear long-term sell signal. The rally could reach the $130 level in the coming weeks, with further strong resistance ahead near $160 and support found near $80 and between $73 and $75.

Altcoins Remain Strong Short-Term, Despite Slight Pullback

XMR/USDT, 4-Hour Chart Analysis

The major altcoins also ticked higher yesterday, and although the rally halted, the short-term trend remains bullish and we expect the move to continue during the holiday season. The likes of Monero and Dash triggered short-term buy signals, despite being relatively weak during the move so far, but traders should focus on the relatively stronger coins given the long-term picture in the segment.

LTC/USD, 4-Hour Chart Analysis

Litecoin, which has been among the leaders of the rally, failed to top the key $34.50 level, forming a swing high near $33, but we expect the coin to at least test the primary resistance zone during the current counter-trend move.

That said, the bearish long-term trend is in no danger here, and traders should consider every position as a short-term holding, since a retest of the lows is still likely in the coming month, with support found in the $30-$30.50 zone and near $26.

XRP/USDT, 4-Hour Chart Analysis

Ripple failed to sustainably stay above the $0.3750 level and test the $0.42-$0.46 zone, as after becoming overbought from a short-term perspective, it dipped below the key support/resistance level. The short-term buy signal remains in place despite the pullback, but from a long-term perspective, odds still favor a test of the prior bear market low near the $0.26 level, with support still found near $0.3550 and $0.32, and further resistance ahead near $0.51.

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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.

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.