Crypto Update: Market in Standstill but Weakness in Top Coins Apparent

While directionless trading continues in the cryptocurrency segment, the bearish drift in the top 3 coins is a warning sign for bulls that the broader downtrend is still intact. The technical setup has been unchanged for over a week, with the short-term trading ranges still being in place despite the failed break-downs and the weak rally attempts, and for now, the bear market lows are in no immediate danger.

That said, the long-term picture hasn’t improved, and our trend model remains on sell signals on both time-frames with regards to the overwhelming majority of the majors, and odds still favor a bearish move in the coming weeks. While it’s possible that we are already in a broader bottoming pattern, in light of the downside technical risks, traders and investors should still not enter positions here, until we see evidence of technical strength.

BTC/USD, 4-Hour Chart Analysis

Bitcoin got close the key $3600 support/resistance level yesterday, but it failed to move above the strong zone, once again proving the lack of bullish momentum. BTC is still dangerously close to the lower end of its short-term trading range, and although the low volatility is a positive sign, the hostile long-term trend environment means the bearish risks remain high here.

The bear market low and the crucial long-term support near $3000 is still not in immediate danger, with a weaker support zone also found at $3250, but bulls should be aware of a possible spike lower together with a surge in volatility, since the narrowing consolidation pattern is mature now. Barring a move above the $3850 level, our trend model will remain on sell signal son both time-frames with further resistance ahead between $4000 and $4050.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still hovering just above the prior swing low at $112, and despite the coin’s apparent relative weakness, the weak support zone still holds. That said, the bearish long-term trend and the failed moves to the upside underline the risks for bulls here, and until we see a sustained move above $130, traders should stay away from ETH.

Our trend model is on clear sell signals on both time-frames and a move towards the key $95-$100 zone remains likely in the coming weeks, with further resistance zones ahead at 4120, $145, and $160.

Litecoin Turns Lower After Rally Attempt

LTC/USD, 4-Hour Chart Analysis

While Litecoin outperformed the broader market yesterday, topping the $32 level following the prior failed break-down, the coin failed to move above the upper boundary of its short-term range. Given the segment-wide weakness, the few stronger coins are not safe for bulls either, since the broader pressures will likely overwhelm the brief positive tendencies.

LTC remains on sell signals on both time-frames, and we still expect a move below the primary support zone between $30 and $30.50. Further support is found near $26 and at the bear market low near $23, while resistance zones are ahead near $34.50 and $38.

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to show relative weakness, and now, it’s trading only a hair above its prior swing low, threatening with a break below the key $0.30 price level, which would likely lead to a test of the $0.28 level and the prior bear market low. XRP faces strong resistance just above the current price level near $0.32, and below $0.3550, even the short-term trend remains negative.

With that in mind, our trend model remains on clear sell signals on both time-frames, with further strong resistance still ahead near $0.3750 and in the key long-term zone between $0.42 and $0.46.

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.

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.