Crypto Update: Divergence Deepens as Altcoins Fall, Bitcoin Flat

The unusual discrepancy between BTC and the rest of the cryptocurrency market continued today, with the top 10 coins all losing ground with the exception of Bitcoin itself. Tuesday’s surge, which carried the segment to $300 billion in total market cap quickly fizzled out, at least as far as the major altcoins are concerned, but the largest digital currency is still holding on above the strong $7000 and $7350 support/resistance levels.

Altcoins are on short-term sell signals according to our trend model, but Bitcoin is still on a buy signal as the declining trend was broken by the break-out that remains intact, despite the segment-wide weakness.

Given the mixed, but one-sided setup, and the lack of bullish follow-through, odds still favor a bearish outcome, and traders should remain cautious with new positions here, even in BTC, the positive outlier. A broad trend change would require a meaningful leadership, and until that develops, a test of t eh June lows remains likely, with the possibility of new lows in the coming week as well.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin failed to durably stay above the $7500 level, bulls successfully defended the support zone near $7350, despite the overbought short-term momentum readings. The coin is well above the line-in-the-sand $7000 level and the long-term support near $5850 that was in danger just one week ago.

Although the altcoin weakness makes BTC’s rally suspicious, the short-term bullish pattern is intact, as is the buy signal in our trend model. Further support is found at $6750, and $6500, while primary resistance is still ahead at $7650.

Selling Pressure Apparent in Altcoins

ETH/USD, 4-Hour Chart Analysis

All intraday rally attempts have been sold so far in most of the major altcoins, and Ethereum is just holding up above primary support at $450 despite the rally in the beginning of the week. The coin is on a short-term sell signal, and a test of the June lows is likely after the failed break-out. Strong resistance is ahead at $500 and between $555 and $575, while support is found at $420, $400, $380, and $360.

XMR/USDT, 4-Hour Chart Analysis

While Monero has been holding up relatively well in the last couple of days after getting stuck below the $150 level during the Tuesday surge, but the coin is still among the structurally weak majors, being on a long-term sell signal. As the other bearish leaders, NEO, LTC, and Dash are also trading below key long-term levels, we expect the coin to fall back below the $125 support and likely test the June lows in the coming weeks.

XRP/USDT, 4-Hour Chart Analysis

The third largest coin Ripple is already testing the $0.45 level after drifting lower ever since the Tuesday rally, and as its relative weakness is still clear, a break below that level seems to be imminent. Below that, the crucial long-term support zone near $0.42 could stop the decline of XRP again, but a move under that could trigger a long-term sell signal.

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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.