Crypto Update: Majors Confirm Short-Term Trend Change

The encouraging rally in the cryptocurrency segment continued in earnest in the past 24 hours, and several top coins topped key resistance levels after forming higher swing lows, confirming a short-term trend change. While the broad rally lifted all of the majors, and the deeply oversold long-term momentum readings together with the horrible sentiment will likely lead to a tradable larger scale bounce, the long-term bearish picture is unchanged in the segment.

For that to change, we would need to see at least a higher low on the long-term charts, but for now, bear market rules remain in place for the top coins. We will take a closer look at the long-term outlook later on today in our long-term cryptocurrency analysis. For now, traders could enter long positions on the relatively stronger coins, but from a broader perspective, at least a retest of the lows remains likely.

BTC/USD, 4-Hour Chart Analysis

Bitcoin pushed above the key $3600 yesterday in late trading, triggering a short-term buy signal in our trend model. While the long-term sell signal remains clearly in place, the most valuable coin could rally as high as the $4450 swing high in the coming weeks, boosted by the negative sentiment and the oversold momentum readings.

That said, November’s key technical breakdown is clearly intact, and the bearish long-term trend is in no danger for now. Primary resistance is ahead between $4000 and $4050, while above $4450 the next zone of interest is found between $5000 and $5050 and further support is at $3250 and $3000.                          

ETH/USD, 4-Hour Chart Analysis

Ethereum also managed to get back above the crucial $95-$100 resistance zone together with the broader market, triggering a short-term buy signal in our trend model. The rally could extend to the resistance zones near $120 and $130 in the coming weeks, and traders could now enter short-term trades on pullbacks, despite the still intact long-term downtrend. Further strong resistance is ahead near $160, while support is found near $80 and between $73 and $75.

Broad Rally in Altcoins as Coins Gain 30% on Average

LTC/USD, 4-Hour Chart Analysis

The strong oversold rally carried all of the major altcoins higher as well, and on a positive note, the early leaders of the counter-trend move continue to be strong, raising the odds of a more sustained move on the upside. Litecoin has been one of the strongest coins so far during the current move, and together with Ripple, they triggered buy signals before the rest of the market.

LTC is trading near the key $30-$30.50 support/resistance zone, and although even a pullback to $26 is in the cards, traders could enter long positions, with targets ahead at $34.50 and $38 level.

XRP/USDT, 4-Hour Chart Analysis

Ripple also formed a short-term swing low and confirmed the breakout yesterday, and today, recaptured the $0.3750 level, while becoming overbought from a short-term perspective. That said, a test of the $0.42-$0.46 zone could be ahead, even as the long-term sell single remains in place and odds still favor a retest of the lows following the counter-trend move. Support is now found near $0.3550 and $0.32, while further resistance is ahead near $0.51.

IOTA/USDT, 4-Hour Chart Analysis

While the broad-based move lifted all of the majors and most of the smaller coins as well, the currencies in the strongest downtrends, such as IOTA, DASH, NEO , Monero, ETC, and Stellar are still vulnerable despite the lofty short-term gains.

With that in mind, even as speculative long positions could be opened in the battered coins, strict risk management rules should be used, with sharp selloff likely being ahead in the coming weeks.

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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.