Crypto Update: Majors Remain Bullish Amid Facebook’s Launch

The major cryptocurrencies continue to enjoy a relatively quiet and bullish period, as although the ‘under-the-hood’ weakness that’s apparent among the smaller coins continues to show, Bitcoin’s new rally high boosted bulls’ confidence. Our trend model is on buy signals for BTC and ETH as far as the top coins are concerned, but Litecoin is also acting positively and Ripple got close to testing its prior swing high as well.

That said, the momentum of the rally remains suspiciously weak, and as the long-term technicals are still overwhelmingly bearish, downside risks remain prominent from a broader perspective. The positive effects of the launch of Facebook’s Libra also helped the segment, but barring a broad move above the previous swing highs, odds still favor a deep sell-off in the coming weeks. Traders should still only consider small, short-term positions in the relatively stronger coins, while avoiding the weaker and riskier ones.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been leading the way higher in the segment ever since triggering a buy signal in our trend model, and it managed to recapture the $9000 level and briefly top the stronger long-term zone near $9200 as well. For now, the short-term uptrend is intact, even as the momentum of the move is weakening, and traders could hold on to their short-term positions here.

The current setup is not ideal for opening new trading positions, as the short-term momentum indicators are already slightly overbought, and since the rest of the market failed to show meaningful technical strength. Short-term resistance is now ahead near $9400, with the next long-term zone near the $10,000 price level, while support is found near $9000, $8400, and $8200.

ETH/USD, 4-Hour Chart Analysis

After joining the current short-term rally, Ethereum crept higher until the end of the weekend and got close to testing its prior swing high, but it failed to break-out to a new high. The coin didn’t manage to hold up sustainably above the $275 resistance, but the short-term uptrend remains intact and there is still a chance for a bullish continuation.

Our trend model is now a short-term buy signal, and as the coin became somewhat oversold, we don’t recommend entering new positions here, but traders could hold on to their existing trades. The weak momentum of the move remains suspicious, but above the key $230 support, the counter-trend rally remains intact, with further support levels found near $230, $200, and $180, and with resistance levels ahead near $300 and $330.

That said, given the lengthy spring rally, downside risks are high here, and the bearish long-term trend is still likely to resume soon. Our trend model is still on a short-term buy signal, while being on a bearish long-term signal, and a move above $275 could still trigger a test of the $300 and $330 resistance levels. In the case of a reversal further support is found near $200, with a key long-term zone below that near the $180 level.

Litecoin Remains Range-Bound, as Ripple Attempts Rally

LTC/USD, 4-Hour Chart Analysis

LTC continues to be stuck in a short-term consolidation pattern after its recent pullback, and while the weakness of the other previous leaders still warrants caution, the coin could be ready to resume the rally. The short-term momentum indicators are back to neutral thanks to the consolidation, and although strong resistance is ahead near $140, traders could already consider short-term positions with an initial target of $150.

With the long-term setup still being bearish, downside risks continue to build, but thanks to BTC’s strength and Ethereum’ stability, the segment remains bullish, at last regarding the immediate outlook.  Initial support is still found near $125 with further levels near $110, $100, and between $85 and $90, while further resistance is ahead near $180.

XRP/USD, 4-Hour Chart Analysis

Ripple managed to sustainably recapture the $0.40 level thanks to the positive trends in the segment, and it briefly tested the $0.46 level. That said du the coins long-term weakness we still don’t recommend entering new positions even on the short-term time-frame until the coin starts to show signs of relative strength.

From a broader perspective, odds continue to favor the continuation of the long-term bear market, and even in the case of a break-out, traders should continue to focus on the relatively stronger coins. Initial support is now found near $0.042, with further levels near $0.3750, $0.3550, just above $0.33, and near $0.32, while above $0.46, the next level of interest found near $0.51.

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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.

Author:
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.