Cryptocurrencies Bounce Back after Quick Correction
The major coins experienced a swift and deep correction after rallying hard on the first two days of the week, with Ethereum dipping below $200 after almost doubling to reach $250 previously. The correction was likely triggered by a security breach in the Parity Wallet that resulted in more than $30 million worth of ETH being stolen.
ETH/USD, 4-Hour Chart Analysis
The token hit $185 before rebounding, and now it’s trying to form a higher low which would be an important step in the long-term bottoming process. The other majors are also up from yesterday’s lows, with Bitcoin regaining almost all of its lost ground, as the optimistic sentiment regarding the scaling debate persists.
Dash is showing relative strength once again, while Ripple and Litecoin are among the weaker coins short-term. The total value of the crypto-market is stable around $80 billion, as the capital flight seems to have stopped. Let’s see how the charts shape up today.
BTC/USD, 4-Hour Chart Analysis
Bitcoin only fell slightly during yesterday’s pull-back, and it bounced off the $2250 level that we have been monitoring previously. The declining long-term trendline is still intact, with strong resistance ahead at $2450, but a higher low seems to be forming on the 4-hour chart, and that could provide a short-term buy signal soon, with the long-term picture still showing oversold readings in momentum.
LTC/USD, 4-Hour Chart Analysis
Litecoin is still in a different rhythm than the other majors, as it just broke below the long-term trendline, entering a consolidation phase, with the short-term declining trend still being intact. The $44 level remains the primary resistance, while support is found at $40 and $38. We expect more sideways action in the short-term, but a move towards $50 should follow in the coming period especially if the other majors enter uptrends.
DASH/USD, 4-Hour Chart Analysis
Dash broke out to new weekly highs this morning, being the first major to form a higher low and provide a short-term buy signal after respecting support at $150 during the pull-back. The coin still faces resistance at $190 and $200, but a test of the prior highs near $220 is likely in the coming weeks with our long-term target still being just above the $250 level.
XRP/USD, 4-Hour Chart Analysis
Ripple remains relatively weak compared to the other majors, but it might be forming an inverse head and shoulders pattern of its own on the 4-hour chart. A rally above 0.20 would be needed to confirm the pattern and provide a short-term buy signal, but for now, traders are still advised to wait with new positions, with the long-term declining trend still clearly being intact.
ETC/USD, 4-Hour Chart Analysis
ETC failed to close above the $16 level, and entered a short-term volatility compression pattern, trading just above the $14.50 level. The coin held above the crucial support zone during yesterday’s correction, but it remains neutral and short-term traders should wait for a move above the $16 level before entering new positions.
XMR/USD, 4-Hour Chart Analysis
Monero is finally showing signs of short-term strength, as it held up well during yesterday’s sell-off and it is trading near the weekly highs at $37. The coin is still inside the forming long-term base pattern between $32 and $37, with the declining long-term trend still being well above the current rate at $42. Short-term traders are advised to wait for confirmation of a trend change before entering new positions.
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