Crypto Update: The First Test of the Uptrend
The major coins continue to trade in a bullish general setup, despite the dip today in early trading, as the preceding rally on Saturday carried Bitcoin and the other leaders of the rally to important technical levels. The current correction is a crucial one, as we already mentioned, as an orderly pull-back with higher swing lows in the most important coins could cement the new bullish cycle.
Correlations should remain muted, unlike during the steep downturns during the bear-cycle, while volume patterns and volatility should also remain supportive of the bullish scenario. As of now, we are still positive on the long-term outlook, and traders and investors should be buying the dip, as a new uptrend is likely being established.
BTC/USD, 4-Hour Chart Analysis
BTC breached the $11,300 resistance that we have been monitoring for days before turning lower, and the coin remains in a clear short-term uptrend. The $10,000 and $9000-$9200 support zones will likely come into play again during the correction, but in bullish cycles surprises usually come on the upside, so a short and shallow pullback is also possible.
XMR/USDT, 4-Hour Chart Analysis
Monero, which has been one of the strongest majors from a technical perspective reached the next target level at $335 before the correction, and it’s now trading between that and the $300 support. The coin should remain above the $240 support to confirm the new uptrend, but we expect XMR to continue to lead the segment higher and a smaller correction is also possible. Another strong support level is found at $280, while above $335, the next target is at $400.
Altcoins Also Correcting
ETH/USD, 4-Hour Chart Analysis
Ethereum touched the dominant declining trendline before the pullback, as it continued to slightly lag the broader market, as we expected. The second largest coin continues to trade in a delayed cycle, and further consolidation is likely before a clear break-out. The $850 level could be in focus during the correction, with further crucial support at $740.
The early leaders of the rally, Ethereum Classic and Litecoin are still trading in short-term correction, which started prior to today’s dip, but the price action in the coins is still bullish and we expect them to start showing relative strength soon, providing a good entry point for traders.
Ripple is also in a consolidation pattern after its strong initial rally, and DASH and IOTA are struggling with resistance zones as well, following the broader market lower today. In general, none of the majors is severely lagging the segment, and with a clear leadership, the rally looks likely to continue after the correction.
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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.