Crypto Update: Market Remains Quiet as Ethereum Shows Strength

Volatility and trading volumes remain low across the board in the cryptocurrency segment, with the major coins, all trading in holding patterns over the weekend. While the top digital currencies avoided another move lower following the Bitfinex-induced plunge, we still haven’t seen signs of bullish momentum, even though we noted a few positive developments during the weekend consolidation, with ETH’s relative strength being the most important of them.

The second most valuable coin, which has been showing the way for the whole segment recently has been drifting higher, testing its previous swing low near $155, but remaining shy of the key $160 resistance level. As ETH gathered strength, Bitcoin failed to stay ahead of the pack, only managing to break even since yesterday, but it remains in a bullish consolidation pattern, keeping the hope of another leg higher in the counter-trend rally alive.

Looking at the smaller coins, the picture isn’t pretty, with no notable leaders to point out, and with the crash lows being in dangerous proximity in most cases. Our trend model remains on sell signals on both time-frames for all of the top coins, and despite the small improvement in the technical setup, traders should still not enter positions here.

ETH/USD, 4-Hour Chart

Ethereum rallied above the $155 level, leading the weekend drift in the segment following an extended period of relative weakness. ETH is trading well clear of the $145 level, and with the key $160 resistance level now being within striking distance, bulls have the hope that the coin will recover from the steep sell-off and reignite the counter-trend move.

That said, our trend model is on sell signals o both time-frames and with the broad weakness among altcoins in mind, traders shouldn’t reenter the coin’s market yet. A recovery above $160 could open up the way towards $180, but from a broader perspective, the resumption of the bear market is still very likely. Below $145, support levels are found near $130 and $112, while above $180 the next level of resistance is ahead near $200.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been virtually unchanged this weekend, trading in a narrow range between $5150 and $5200. The $5400 resistance and the $5050 support are still the levels to watch, for short-term traders, and although the long-term setup remains clearly bearish, the short-term outlook is rather neutral, and the counter-trend move might still resume, which would be essential in the generally bearish environment.

Should Bitcoin get back above $5400, a rally towards the structurally important $5850 level, but that would still leave the bear market intact, so traders should only consider short-term positions even in the relatively strong. Our trend model is still on sell signals on both time-fames, with further support levels found near $4840 and $4450.

Ripple Continues to Lag as Litecoin Fails to Bounce

XRP/USD, 4-Hour Chart Analysis

Ripple is still a major drag on the whole segment, only managing a weak bounce following the steep sell-off. The coin is stuck below the $0.30 level, and although the key $0.28 support is safe, for now, technicals are still hostile, and even in the case of a broad recovery in the market, traders and investors should stay away from XRP.

Our trend model is on clear sell signals on both time-frames, and a move below $0.28 would likely trigger a test of the August low near $0.26, with new bear market lows also being possible in the near future. In case of a recovery, further resistance levels are ahead near $0.32, just above $0.33, and near the $0.3550 price level.

LTC/USD, 4-Hour Chart Analysis

Litecoin has been under clear selling pressure throughout the weekend, despite holding up relatively well during the market-wide sell-off. The coin is glued to the $70 price level, and the $72.50-$72 resistance zone is still towering ahead of bulls, so despite the LTC’s current stability, downside risks are high for the prior leader of the counter-trend move.

A dip below $70 would open up the way towards $64, with the next level of interest being at $56, while a less likely recovery above the initial resistance zone could lead the test of the strong resistance between $85 and $90.

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.

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.