Crypto Update: Segment Under Pressure Again as Altcoins Weigh

The major cryptocurrencies are all lower again, and although the oversold rally continued over the weekend, with the help of BTC relative strength, the top altcoins failed to show meaningful technical progress. With ETH still being stuck below $230, Litecoin dipping back below $100, and Ripple also sliding below $0.33, bulls could be soon in trouble again, even though last week’s lows are not yet in immediate danger, and BTC is still holding up relatively well.

The freshly formed short-term downtrends remain intact, and with Litecoin’s rally fading away, besides BTC, there are only a few smaller coins showing strength, leaving the overall picture overwhelmingly bearish. Our trend model is still on sell signals in most cases, with only BTC holding to its short-term buy signal, for now. Following the recent consolidation, the coming days will be very important in deciding the direction of the next larger-scale move, and odds continue to favor another leg lower in the downtrend.

BTC/USD, 4-Hour Chart Analysis

Bitcoin failed to recapture the $11,300 resistance level despite the weekend rally attempt and its renewed short-term buy signal in our trend model, as the segment-wide pressures dragged the most valuable coin lower today. On a positive note, the momentum of the move is relatively weak, and BTC’s prior swing low is no immediate danger, but should the altcoin weakness persist, a re-test of the lows is possible in the coming days.

While the relatively strong coin is still on a buy signal in our trend model, traders should still use strict risk management rules, and we would need to sings of broader technical strength to take a more constructive stance even towards the strongest coins. Initial support is still found near $10,000 with further levels at $9,400, $9200, and near $8,400, while resistance above $11,300 is ahead near $13,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum failed at the $230 support/resistance level yet again, despite briefly topping the key zone, and the oversold rally might already be over in the coin’s market. ETH is well above the $200 level that it violated last week, and the bounce might still continue, but the short-term downtrend is clearly intact, and traders shouldn’t enter new positions here.  Our trend model is still on sell signals on both time-frames, and the coin’s weakness could remain a major drag on the whole segment.

Should ETH move below $200, the test of the $180 level would be all but assured, and even considering BTC’s strength, downside risks remain apparent in the segment. Below the key long-term zone near $180, further support is found near $160, while above the initial resistance zone, strong zones are also ahead near $260 and $275.

Litecoin Plunges Below $100 as Ripple Fails at Trendline

XRP/USD, 4-Hour Chart Analysis

While XRP managed to recapture both the $0.32 and $0.33 level, with the latter being in focus throughout the weekend, it remains very weak from a broader technical perspective, and we continue to expect a sustained dip below the key long-term $0.30 level soon. The coin would need a broad recovery rally in the segment even for a more meaningful counter-trend rally, but for now, the steeply declining short-term trend remains intact.

Our trend model is also on sell signals on both time-frames, and while today’s bearish move hasn’t picked up momentum yet and the correction might continue, traders should avoid entering positions in the relatively weak XRP. Above $0.33, the next levels of resistance are still ahead near $0.3550, and at $0.3750, while further support zones are found near $0.28 and $0.26.

LTC/USD, 4-Hour Chart Analysis

While Litecoin spiked above the key $100 several times during the correction, it failed to stay above it in a sustained fashion. LTC has been relatively weak today, but it’s still holding on to most of its gains, and the rally could still resume in the coming days. Should the coin retain its relative strength and score a new swing high, a renewed short-term buy signal is still possible, which would be a great sign for BTC and the other top coins as well.

The coming days will be crucial for LTC, and all eyes are once again on the crucial long-term support/resistance zone between $85 and $90, as the coin should hold above that to avoid another test of the previous swing low near $75. Below $75, support is found $64, while above the initial zone resistance is now ahead between $110 and $112 and near $125.

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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.