Crypto Update: Majors Bounce Again as Bitcoin Remains Strong

The cryptocurrency segment so yet another short-term turnaround today, but although a broad break-down has been avoided one more time, the overall technical setup hasn’t changed. Bitcoin’s relative strength remains the most important bullish sign, as although the most valuable coin is still stuck below its recent swing high, it’s short-term consolidation pattern continues to keep the bullish hopes alive, despite the broad weakness among the top altcoins.

The weekend highs remain intact in most cases, but the fact that the consolidation continues in the segment is a positive sign for bulls here. That said, in light of the clearly bearish long-term technicals, today’s rally is still not a reason to get back into the market and no short-term buy signals have been triggered in our trend model.

The early leaders of the counter-trend move remain mixed, and in order to the rally to continue we would need to see broader strength in the sector, so the performance of the likes of Litecoin and EOS will be crucial in the coming days. For now, traders should still stay away from entering new positions even following today’s bounce.

BTC/USD, 4-Hour Chart Analysis

Bitcoin got back above its weekend high and the $5200 level thanks to today’s spike, but it remains well shy of its recent swing high. The coin held up above the weak rising short-term trendline as well, keeping the consolidation pattern intact, and a move above $5400 would likely lead to the test of the structurally important $5850 level.

That would still keep long-term declining trend intact, and coupled by the short-term weakness in the top altcoins, that continues to warrant caution even regarding the relatively strong coin. Initial resistance is still ahead just above the current price level, while below the $4800 level, further support is found near $4450, $4200, and in the $4000-$4050 zone.

ETH/USD, 4-Hour Chart

After spiking below $160 yesterday, Ethereum got back to its weekend high, although it remains below that level, still showing relative weakness compared to BTC. The coin is also well below the $180 level and its previous swing high, and it is still likely to resume its long-term declining trend.

While a broad rally could trigger a move towards the $200 resistance, traders shouldn’t enter positions here, with our trend model being on sell signals on both time-frames. Below the initial $160 support, further strong levels are found near $145 and $130, with the prior bear market low still being in safe distance $80.

Litecoin Recaptures $80 Level as Ripple Remains Weak

LTC/USD, 4-Hour Chart Analysis

Besides BTC, Litecoin is showing the most short-term promise, holding up above the key $72.50-$75 zone during yesterday’s selloff and bouncing back today together with the broader market. That said, LTC is still clearly below its weekend high, and although its bullish consolidation pattern is still intact, we need to see signs of bullish momentum before reentering the market for a short-term trade.

Our trend model remains on sell signals on both time-frames, and barring a move above $85, traders shouldn’t consider even short-term positions in the coin. Below $72.50, another strong support zone is found near the $64 price level, while resistance is ahead in the $85-$90 zone and just above $100.

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to the weakest among the top coins, and although it climbed back above the $0.32  level, it’s technical setup remains bearish on both-time frames. Our trend model is also on firm short-and long-term sell signals, and we continue to expect a dip below the $0.30 support in the coming weeks.

That said, a broad recovery could lift the coin back above $0.3550, should the counter-trend move resume, but traders should focus their efforts on the relatively stronger coins in that case, as downside risks are very high in XRP’s market. Below $0.30, further support is found near $0.28 and $0.26, with resistance levels ahead near $0.33, $0.3550, and $0.3750.

Featured image from Shutterstock

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.