Technical Analysis: Ethereum Leads Altcoin Rally as Bitcoin Dominance Fades
The first full trading day of the year jump-started the cryptocurrency market, as all of the major coins are higher after a hectic holiday season. Ethereum is the strongest of the most-traded coins, as it built upon its recent relative strength and rallied to test its all-time high today. Most of the altcoins followed ETH higher, although only NEO and Ripple are close to their prior highs.
Ethereum breached its record high thanks to the rally, but it failed to extend the advance to durable new highs for now. The move triggered a short-term buy signal, but with the long-term momentum still being stretched, the long-term setup remains unchanged, and further consolidation is likely, but we still expect the coin to outperform the other majors in the coming period. Traders could still play the short-term move, with support levels found at $740, $625, $575, between $480 and $500, and near the prior all-time high at $400.
ETH/USD, 4-Hour Chart Analysis
Bitcoin lagged the rest of the market until a late rally that carried the most valuable con above the $15,000 level following a period of strong selling pressure. The coin’s dominance is near its all-time low despite the late-day move, and while the short-term picture is now neutral, the long-term chart still suggests another leg lower in the correction. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.
BTC/USD, 4-Hour Chart Analysis
LTC/USD, Daily Chart Analysis
Litecoin is still among the weaker majors despite the recent rally, and it’s hovering near the primary resistance zone between $250 and $260. The coin is neutral from a short-term perspective while still being bearish from an investment standpoint. We expect the correction to continue with a likely re-test of the mini-crash low, and further strong support at $125 and $100.
DASH/USD, 4-Hour Chart Analysis
Dash left the short-term downtrend thanks to the rally in the last couple of days, and although the long-term setup is still negative, the short-term picture is now neutral. The coin is likely headed below the correction lows in the coming weeks, with support levels still found at $1000, slightly above $800, at $650, and near $600.
XRP/USD, 4-Hour Chart Analysis
Ripple is trading inside a short-term correction pattern after its recent exponential break-out, and the coin is still in a rising trend despite the extreme long-term momentum readings. While we expect a deep correction in the coming weeks, traders could still speculate on another leg higher once the short-term overbought readings are cleared. Primary support is now at $1.50 with further levels at $1.25, $0.85, $0.68, and $0.42.
ETC/USD, 4-Hour Chart Analysis
Ethereum Classic is neutral from a short-term perspective after bouncing off the $25 level yet again. The coin remains in a bearish long-term setup and more corrective price action is likely in the coming weeks, with a move below $23 in the process. Major support below $23 is at $18, while resistance levels are ahead at $34 and $40.
XMR/USD, 4-Hour Chart Analysis
Monero is relatively weak in the current rally after exiting its dominant uptrend, as a deeper correction is likely underway. The coin is still severely overbought from a long-term perspective, and traders should also remain cautious following the trend break. Primary support is still found at $300 and further important levels found at $240, $200, $180, and $150.
NEO/USDT, 4-Hour Chart Analysis
NEO built on its encouraging long-term setup and hit a new all-time high, just shy of our long-term target at $100. Now the long-term setup is overbought, but there is still room for further gains, while the short-term trend remains bullish. We expect volatile conditions to persist, given the broad correction in the segment, but the coin remains one of the most encouraging from a technical perspective. Support levels are now found at $80, $64, and $56.
IOTA/USD, 4-Hour Chart Analysis
IOTA bounced higher together with the rest of the majors, although it still shows relative weakness, and the long-term overbought readings are still not yet fully cleared. That said, the coin remains ahead in the cycle compared to the other majors and an earlier bottom is likely, with strong support still at $3 and $1.5, with a Fibonacci support between those at $2.35.
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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.