Crypto Update: Litecoin Pulls Back as Rally Fails to Reignite


While the major cryptocurrencies experienced another rally attempt yesterday following last week’s Litecoin-led surge, most of them failed to hit sustained new highs. The top coins are still holding on to most of their gains, but the lack of bullish momentum is a negative sign. With the bearish long-term picture in mind, traders should still be cautious even with the relatively stronger coins, as the odds of yet another failed move are high.

EOS/USD, 4-Hour Chart Analysis

Trading activity remained higher than in recent weeks in the segment, but with no real technical progress in the majority of the currencies (only EOS hit a new sustained swing high among the top coins), bear market rules still apply. With that in mind, traders should still only consider short-term positions here with strict risk-management rules. From a broader perspective, the re-test of the late-year lows remains likely, and as the top 3 coins are not able to lead the way higher the rally attempt continues to be suspicious.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to drift lower in the low volatility environment, showing clear signs of relative weakness since Friday’s surge. The coin fell below the key $3600 support/resistance level today, and although it remains above its prior trading range, its market is still dominated by sellers. While BTC remains on a short-term buy signal in our trend model, traders should only enter small speculative positions here.

The long-term outlook for Bitcoin is clearly bearish and our trend model remains on a long-term sell signal as well. The coin faces strong resistance near $3850 and between $4000 and $4050, while support is found just above $3450, near $3250, and in the key zone near the $3000 price level.

LTC/USD, 4-Hour Chart Analysis

Litecoin now cleared the overbought short-term momentum readings thanks to the volatile consolidation, but today, it violated its recent swing low. That said, the break-out remains intact and our trend model is on a short-term buy signal, although the long-term setup is still negative.

Above the $38 price level, the immediate outlook is still bullish, but given the segment-wide trends, traders should continue to be cautious with new positions. The next key resistance level above the recent swing high is ahead near $51, with further support found near $34.50 and between $30 and $30.50.

Ethereum Test Swing High as Ripple Remains Under Pressure

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to be the weakest among the top coins, as it has been the case ever since its late-January rally attempt. XRP is still hovering near the $0.30 support/resistance level after failing near the declining short-term trendline that capped the price of the coin since early January.

Despite the recent spikes higher, the coin will likely re-visit the $0.28 level and the August low near $0.26 in the coming weeks, as bearish forces remain dominant in the market. Above the short-term trendline strong resistance levels are ahead near $0.32, $0.3550, and $0.3750.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed short-term strength in the last couple of days, getting close to Monday’s high and testing its weekend high in the process. While the short-term strength could mean that ETH will push higher again in the coming days, the long-term technical setup is still hostile for bulls.

The coin is holding up above the key short-term $112 support/resistance level, with the $120 level being in focus in recent days, but further strong resistance is ahead near $130. Although our trend model is on a short-term buy signal, from a long-term perspective, Ethereum is still relatively weak, and it will likely test the $95-$100 zone again, with a possible move towards the prior bear market low near $80.

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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.