Crypto Update: Weekend Spike Fails As BTC Shows Weakness

The cryptocurrency segment experienced a rebound in the second half of the weekend, with several sudden spikes and the relative strength of altcoins dominating the market. LTC made the most technical progress during the move, briefly moving above its prior swing high, but it and all of the other top coins gave back most of their gains today.

The bounce hasn’t changed the broad bearish setup in the segment, but since the majors held up above their prior consolidation zones, it kept the hope of a more sustained counter-trend rally alive. That said, BTC is still showing clear signs of weakness and even though it might resume its rally attempt, odds favor another test of the October low. That’s especially true, as there is still no leadership present even considering this weekend’s price action, so traders should remain defensive here.

BTC/USD, 4-Hour Chart Analysis

BTC failed to recapture the $9,200 price level despite the late-weekend spike, and today, the coin hit its lowest level since the short squeeze in October. The coin continues to hold up above its prior trading range, but due to its relative weakness, it will likely re-enter that zone in the coming days, which could set up a test of the key $7,600-$7,800 support zone and the October low.

The coin is now on sell signals on both time-frames in our trend model, with support zones found near $8,650, $8,400, and $8,200, and with resistance ahead near $9,200 and $10,000.

ETH/USD, 4-Hour Chart Analysis

ETH has been relatively stable amid the weekend bounce and today’s sell-off in the segment, staying well below last week’s swing high and the lower boundary of the key $180-$185 support/resistance zone. The low volatility in the coin’s market is not enough for a bullish shift in its outlook, but should ETH managed to build up relative strength, the whole segment could get a major boost. For now, downside risks remain high, and we still expect the downtrend to resume.

Our trend model is still on sell signals on both time-frames, with further support zones now found near $160, $145, and $130, and with resistance zones ahead near $200 and $230.

XRP Still Under Pressure As LTC’s Breakout Fails

XRP/USD, 4-Hour Chart Analysis

XRP had a bearish weekend, in a relative sense, as despite its relatively large losses during last week’s sell-off it failed to bounce back significantly. The weakness could mean that the coin’s brief period of strength is already over, and it’s ready to lead the way lower for the segment, in line with its bearish long-term technicals.

XRP is still on sell signals on both time-frames in our trend model, with support zones now found near $0.26, and $0.2475, and with resistance zones ahead near $0.28, $0.30, and $0.32.

LTC/USD, 4-Hour Chart Analysis

LTC has been the strongest major from a short-term technical perspective for a week now, but the $64 level continues to limit the coin’s counter-trend move. Despite its current strength, the coin is still weak from a long-term standpoint, and just as it was the case with XRP, we expect its relative strength to be temporary.

LTC remains on sell signals on both time-frames in our trend model, with further resistance zones found near $56, $51, and $44 and with the next major resistance zone ahead near $75.

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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.

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.