Crypto Update: First Correction Or Sobering Reversal?

The cryptocurrency segment is at a very important technical juncture, as after a grueling downtrend, the majors formed a rising short-term trend that is being put to test for the first time. As several top coins broke out of their declining long-term channels, the current pullback that we have been waiting for since Friday could decide the fate of the rally attempt. All eyes are on BTC and LTC, the top leaders of the move, and for now, the losses are not dangerous, from a technical perspective.

Our trend model remains dominantly on short-term sell signal despite today’s dip, while being mixed from a long-term perspective. The overbought short-term momentum readings haven’t been cleared just yet, and traders should remain cautious here, even as the majors are holding up above key support levels, while defending most of their recent gains as well. The coming days will be crucial for the segment and volatility might rise substantially next week.

BTC/USD, 4-Hour Chart Analysis

While BTC got close to hitting the key $9,200 resistance level on Saturday in late trading it quickly reversed its gains and briefly fell back below its initial support zone near $8,600. The coin also breached its rising short-term trendline, hinting at the possible first correction of a new long-term uptrend, but at this point, a reversal to another large-scale downswing can’t be ruled out, and traders should remain cautious.

BTC is now on a short-term sell signal and long-term buy signal in our trend model, with support zones found near $8,600, $8,400, $8,200, and $7,800, and with resistance ahead near $9,200, $10,000.

ETH/USD, 4-Hour Chart Analysis

ETH got very close to testing the $180 price level after grinding higher in the face of its overbought short-term momentum readings for several days. The latest breakout to a new swing high failed in a spectacular fashion, and the coin immediately fell back to the vicinity of the long-term support resistance zone near $160. The coin remains overbought from a short-term perspective, but the short-term uptrend is also clearly intact.

Our trend model is now on sell signals on both time-frames, with major support zones found near $160, $145, $135, and $130, and with resistance zones ahead between $180 and $185 and near $200.

XRP Tests $0.23 As LTC Returns To $56

XRP/USD, 4-Hour Chart Analysis

After briefly rising above the $0.25 price level, XRP dipped quickly below $0.23 yet again, getting close to its rising short-term trendline. The coin remains weak from a broader perspective and despite the still intact short-term trendline, bulls would need a strong market-wide trend shift to consider anything other than a small short-term position here.

XRP is now on sell signals on both time-frames in our trend model, with support zones found near $0.23, $0.21, $0.20, and $0.1930 and with resistance zones ahead near $0.2475, and $0.26.

LTC/USD, 4-Hour Chart Analysis

LTC has been trading in line with the segment-wide trends this weekend, clearing the $60 price level before falling back to the vicinity of the support zone near $160. The coin is still overbought from a short-term perspective, but it remains well above its short-term trendline, while also being above its previously dominant declining long-term trendline. While traders shouldn’t ewnter new positions here, bulls still have the hope that LTYC will confirm the long-term trend change.

LTC is now on a short-term sell signal and a long-term buy signal in our trend model, with support zones now found near $56 and $51, and with resistance zones ahead near $64 and between $72.50 and $75.

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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.