Crypto Update: Key Support Levels in Focus as Bulls Fight for Control

The cryptocurrency segment settled down following yesterday’s steep and broad drop, with the top coins finding support several times near the long-term levels that stopped the plunge initially. Despite the spikes lower, below the $5000 level in BTC’s market and towards the $160 level in the case of ETH, the coin’s managed to avoid a key break-down keeping the short-term hopes alive for bulls after the recently failed break-out.

While the current stability is a positive sign, the bounce lacks meaningful bullish momentum, so it’s no reason to enter new positions here. Our trend model remains on sell signals on both time-frames regarding the overwhelming majority of the majors, and barring a broad push higher, the immediate outlook will remain clearly negative, even as the counter-trend move could still resume.

We will continue to pay close attention to the leaders of the move, like Litecoin and EOS, while Bitcoin’s performance will also be crucial following the period of relative strength. For now, traders should remain defensive, and even in the case of a quick recovery, only short-term positions should be considered.

BTC/USD, 4-Hour Chart Analysis

While yesterday, Bitcoin showed relative weakness and spiked as low as $4900 overnight, it managed to climb back above the key long-term support/resistance level at $5050, keeping bulls’ short-term hopes alive. BTC is still clearly above the recent swing low at $4800, and with that, the failure of the counter-trend move is not confirmed, but in light of the long-term setup, our trend model remains on sell signals on both time-frames.

Traders and investors should still stay away from entering new positions here, with the bear market still being intact. Initial resistance is found near $5200 with the structurally important $5850 level also being very strong, while below $4800, further support levels are found near $4450, $4200, and in the $4000-$4050 zone.

ETH/USD, 4-Hour Chart

Ethereum managed to hold above the $160 support despite the market-wide selling pressure, but the coin is still clearly stuck below $180, and the bounce wasn’t enough to change the bearish outlook, even on the short-term time-frame. Even though ETH showed strength during the consolidation phase, from a long-term perspective, it is among the most important laggards of the segment

Traders and investors should still not enter positions here, with our trend model being on sell signals on both time-frames, with a move below $160, towards the $145 and $130 support levels being likely in the coming weeks. A less likely recovery could open up the way for $200, but even that wouldn’t change the long-term outlook.

Ripple Remains Under Pressure as Litecoin Drifts Sideways.

LTC/USD, 4-Hour Chart Analysis

Litecoin remains clearly above the $72.50-$75 zone thanks to today’s bounce, and it continues to be way north of the pre-surge zone, leaving the counter-trend move intact, for now. Despite that, due to the hostile long-term technicals, the con remains on sells signals on both time-frames, and traders shouldn’t enter new positions here.

Bulls would need a quick recovery above $85 for the rising to resume, but a move below the primary support zone seems much more likely. Below $72.50 the next major support zone is found near $64, with another strong level at $56, while resistance is ahead in the $85-$90 zone and just above $100.

XRP/USDT, 4-Hour Chart Analysis

Ripple has once again been very active in the past 24 hours, but it still failed to show signs of relative strength, with selling pressure being apparent in the coin’s market. XRP spiked below the $0.32 support, but, for now, the key level is holding up, but despite that the outlook for the coin is clearly negative on all time-frames.

That’s reflected in the sell signals in our trend model as well, and the test of the $0.30 level is very likely in the coming weeks. Further support is found near $0.28 and $0.26, while above the initial zone near $0.33, resistance is also ahead near $0.3550, $0.3750, and $0.40.

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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.