Crypto Update: Weakening Bearish Momentum Leads to Another Rally Attempt

The cryptocurrency segment is having its most bullish day in a long while, as despite the failed rally attempt on Monday, the top coins held up above their lows and launched another bounce. While that didn’t change the overwhelmingly bearish overall picture, it confirmed the weakening of the negative momentum, at least in the case of the relatively stronger coins and lifted the total value of the market above $130 billion again.

The major coins are now all above their weekend lows, with most of them trading near their prior panic lows. A broad move above those levels could set up a bear trap formation, which in turn could lead to a larger correction. That said, traders and investors should still only consider ultra-short-term positions, given the still intact short-, and long-term trends.

BTC/USD, 4-Hour Chart Analysis

After successfully testing the lows yesterday, Bitcoin rallied back to the key $4000-$4050 zone, which represents the primary resistance as well, and although the most valuable coin failed to rally above that, it’s in the best short-term technical position ever since its key breakdown below $5850.

The short-term downtrend is still clearly intact, but today’s strength was enough to trigger an upgrade to neutral in our trend model, although the long-term sell signal is still clearly in place. Above the strong resistance in the $4000-$4050 zone, further zones ahead near $4450, and between $5000 and $5100, while support is found at $3600 with a crucial long-term zone near $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to be stuck below the $120 level and it is still showing signs of weakness compared to BTC, and our trend model remains on sell signals on both time-frames. That said, the coin managed to hold up above its Monday low, outperforming most of the smaller altcoins, and a rally above the primary resistance could trigger a larger scale correction in Ethereum as well.

For now, traders and investors should stay away from entering positions in ETH, but should the broad rally in the segment continue, short-term positions might be considered following the rout of the recent weeks. Primary support is still found in the $95-$100 zone with further resistance ahead near $130, $150, and $160.

Altcoins Still Weak but Litecoin Continues to Lead

XRP/USDT, 4-Hour Chart Analysis

Ripple once again recovered above both the $0.355 and $0.375 support/resistance levels, following the broader market higher, and the coin managed to avoid a long-term sell signal in our historic breakdown in the segment. That said, the short-term outlook is still only neutral and traders and investors shouldn’t enter new positions here. Key long-term resistance is ahead in the $0.42-$0.46 zone, with further support levels found at $0.32 and $0.30.

Litecoin/USD, 4-Hour Chart Analysis

After showing early signs of relative strength, LTC was the first major to recover above its prior low after the weekend selloff, triggering a buy signal in our trend model on the short-term time-frame. Despite the upgrade we still lonely recommend ultra-short-term positions in the coin, given the dominant bearish long-term pressures. Strong resistance is still ahead at $34.50 and $38, while support is found near $30 and $26.

XMR/USDT, 4-Hour Chart Analysis

Monero is still struggling to get back clearly above the $60 level despite the broad rally in the segment, as the coin continues to be among the weaker majors, together with EOS, NEO, and Dash. XMR is still in a strong short-term downtrend while also trading well below the prior bear market low near $80. Traders and investors should still not enter positions here until material a technical improvement, even as a segment-wide rally is likely 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.

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.