Crypto Update: Weekend Rally Fades as Coins Lack Momentum

While the major cryptocurrencies had a bullish Saturday following a hectic week, with Litecoin pulling its weight again, the segment continues to be controlled by sellers. We still haven’t seen meaningful technical progress in the top coins, with even the short-term resistance levels proving too strong in the quiet and illiquid environment. Today, the majors have been drifting lower despite an overnight spike higher, which was led by LTC and EOS, and most of the coins are now unchanged for the weekend.

With the long-term picture still being overwhelmingly bearish, and given the failed rally attempts this week, another downswing towards the prior bear market lows is likely in the coming weeks. Our trend model remains on sell signals on both time-frames in most cases and traders and investors should remain defensive until we see evidence of short-term technical strength in the market.

XRP/USDT, 4-Hour Chart Analysis

Ripple has been relatively weak during the weekend, and since the mid-week rally attempt the coin failed to show bullish momentum, and the $0.30 level is yet again in danger. We still expect a move below the $0.28 price level, with a likely test of the August low near $0.26, and the lack of follow-through following spike higher is a negative sign for the whole segment.

The coin remained on sell signals on both time-frames in our trend despite the rally attempt and trader and investors should stay away from entering new positions here, with strong resistance ahead near $0.32, $0.3550, and $0.3750.

BTC/USD, 4-Hour Chart Analysis

Bitcoin tested its primary resistance zone just above the $3450 price level, but it failed to re-enter its prior trading range, and the rally attempts still lack momentum, despite the coin’s relative stability. While the prior bear market low remains safe, for now, the short- and long-term downtrends are intact and the price action continues to indicate strong selling pressure.

Above the primary zone, further resistance is ahead near $3600, $3850, and between $4000 and $4050, while support is found near $3250 and $3000, and traders still shouldn’t enter positions here.

Litecoin Tests Key Resistance but Altcoins Remain Weak

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to outperform its most important peers this weekend, and the coin made it to the upper boundary of its short-term range, testing the $34.50 resistance level.  The coin failed to break-out above the range, for now, and left our trend model on sell signals on both time-frames despite the strength of the past few days.

A sustained move above the range would indicate a short-term trend change, but until we see further evidence of a bullish move, traders shouldn’t enter positions especially in light of the segment-wide trends. Key support is found between $30-$30.50 and near $26, while further resistance is ahead near $38.

DASH/USD, 4-Hour Chart Analysis

Most of the other major altcoins are showing weakness, and although volatility is relatively low, correlations remain elevated in the segment, and that confirms the continuation of the bear market. The technical setup in Dash describes the selling pressure in the market, with most of the majors failing to recapture even short-term resistance levels.

ETH/USD, 4-Hour Chart Analysis

Ethereum is also showing similar relative weakness, and although it got close to the $112 level this yesterday, it is still vulnerable from a technical perspective, and a dip below the key $95-$100 level is likely ahead. A bearish move could lead to an imminent test of the prior bear market low, and the strong declining trends are intact in ETH’s market. Above $112 further strong resistance is ahead near $120 and $130, and traders still shouldn’t enter positions here.

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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.