Crypto Update: Market Bounces Again as Litecoin Gains Ground

The cryptocurrency segment had another active day, and although the recent failed rally attempt cemented the short-term downtrend, the majors managed to avoid another downswing, for now. The top coins were boosted by the more than 5% advance of Litecoin, while the continued stability of Bitcoin also helped investor sentiment in the segment ahead of the weekend.

LTC/USD, 4-Hour Chart Analysis

That said, the underlying bearish trends are clearly intact, and as no meaningful technical progress has been made, traders and investors should still not enter the market here, with the risks still being skewed to the downside.

Despite the rally off the $30-$30.50 support zone, Litecoin is still well below the key resistance zone near $34.50. Until a durable move above that zone, our trend model remains on sell signals on both time-frames, as it’s the case regarding the overwhelming majority of the top coins, and odds still favor a move towards the $26 level in the coming weeks.

XRP/USDT, 4-Hour Chart Analysis

The week’s other big mover Ripple, dipped below the $0.30 level yesterday and although it managed to climb back above that today together with the broader market, the coin is still stuck below its prior trading range, and all signs still point to a one-day-wonder rally, especially in light of the market-wide trends.

XRP is likely to test the $0.28 level in the coming period, with a possible move to the August low near $0.26 following the failed rally attempt.  Ripple is facing strong resistance near $0.32, $0.3550, and $0.3750, and traders should still stay away from the currency here.

Ethereum Remains Weak as Bitcoin Clings to $3450 Level

BTC/USD, 4-Hour Chart Analysis

The technical setup in BTC’s market is unchanged but the fact that the most valuable coin avoided a momentum move following the recent break-down is a positive sign for the whole segment, even though the selling pressure is still apparent in the market. The resistance zone just above the current price level remains in focus, and for now, the coin is still on sell signal son both time-frames in our trend model, with the prior trading range surrounding $3600 still towering ahead of BTC.

Bulls would need a move above $3850 for a short-term trend change, and a move towards the $3250 support still being likely in the coming weeks, with the test of the key $3000 level also looming. The long-term downtrend is in no danger here, with further resistance ahead in the $4000-$4050 zone.

ETH/USD, 4-Hour Chart Analysis

Ethereum remained suspiciously weak during today’s bounce following an extended period of relative weakness, and even the primary short-term support near $112 remains well above the current price level. With that in mind, a test of the key $95-$100 zone still seems likely, and we continue to expect a dip towards the prior bear market low near $80 afterwards.

With the short- and long-term downtrends clearly being intact in ETH, a trend change, which would require a move above the $120 and $130 resistance levels, is unlikely here. As there are no signs of a developing leadership in the segment, Ethereum will likely continue to lead the way lower in the coming period.

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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.