Crypto Update: Majors Stage Weak Rally Attempt Led by Litecoin

While we saw a bounce in the cryptocurrency segment yesterday in late trading, only a few gins made meaningful progress, such as Litecoin and Ripple, and from a  technical standpoint, not much has changed in the wake of the move. Only Litecoin got upgraded to a short-term buy signal in our trend model, thanks to its relative strength, but given the segment-wide pressures and the weak participation in the rally attempt, the immediate outlook is shaky for all of the top coins.

Besides Litecoin, the previously leading coins failed to show relative strength, and today the likes of EOS and BTC are already back near their recent ranges, threatening with another swing lower. With that in mind, traders should remain defensive towards the segment, and until we see broader technical strength in the market, traders shouldn’t enter new positions here.

BTC/USD, 4-Hour Chart Analysis

Bitcoin briefly topped the $8000 level amid the broad bounce, but the weak rally wasn’t enough to trigger an upgrade in our trend model. The coin remains on sell signals on both time-frames and the key $7600-$7800 support zone is back at the center of attention following today’s dip.

Due to the segment-wide technical weakness, a dip below $7600 is now likely, which could lead to a quick test of the $7000 price level. Below that further support levels found near near $6750 and $6500, with the crucial long-term zone near $5850 level still being in danger following the lengthy couter-trend move. still seems likely in the coming weeks. Despitethe ccurrent weakness, the rally might still resume, with short-term resistance levels still being ahead near $8000, $8200, and $8400.

ETH/USD, 4-Hour Chart Analysis

Ethereum has been showing signs of weakness during the recent bounce which means that the the key long-term $230 support level could be in danger soon. Our trend model remains on sell signals on both time-frames, and traders should avoid entering new positions here.

That said, a short-term downtrend is still not confirmed, and in the case of a broad recovery, ETH could still test the $300 level. The long-term technical picture remains hostile for the second largest coin, and we still expect it to, at least, test the prior bear market low in the coming months.

Litecoin Test Highs as Ripple Fails at Key Level

XRP/USD, 4-Hour Chart Analysis

Ripple experienced a brief period of relative strength, as it did several times over the last few months, but it failed to show signs of bullish follow-through today. The $0.42 resistance level proved to strong for the relatively weak coin, and it remained on sell signals on both time-frames in our trend model despite the bounce.

XRP turned lower today together with the broader market, and although a recovery is still possible, traders should continue to focus on the relatively stronger coins. Initial support is now found near $0.40, with further levels near $0.3750, $0.3550, just above $0.33, and near $0.32, while resistance above $0.42 is ahead near the $0.46 and $0.51 price levels.

LTC/USD, 4-Hour Chart Analysis

Litecoin’s rally boosted the majors yesterday in late trading, but even as it tested its recent swing high near $120, the other majors failed to join the move in earnest. The coin continues to hold above the key $100 level, despite today’s pullback, and it’s on a short-term buy signal in our trend model thanks to the rally.

While LTC is still in a short-term uptrend, given the strongly bearish long-term pressures and the segment-wide trends, train should only consider small short-term positions. Initial support is nos found near $110, with further zones near $100, in the $85-$90 range, and near $75. Despite the long-term pressures, the rally could still continue, and above the recent swing high resistance levels are ahead near $125, $140, and $150.

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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.