After almost two days of sideways price action, the major cryptocurrencies spiked lower following the US open, led by Bitcoin, but buyers quickly stepped in below the short-term support levels, saving the market from another breakdown. The top coins bounced back strongly and climbed above the upper boundary of the short-term range in the process, and should the bullish move hold, it would be a very positive sign for the coming weeks.
Despite the volatile session and the move out of the range, in both directions, the broader technical setup is unchanged and bearish, and until further evidence of strength, traders and investors should still not enter new positions here even in the technically stronger coins. On a negative note, the coins haven’t shown signs of bullish follow-through either, but the next 24 hours could provide valuable information on the underlying strength of the segment.
LTC/USD, 4-Hour Chart Analysis
Looking at the bearish leadership of the market, it’s hard to find positive even in today’s price action, as the most important laggards are still stuck below key resistance levels, with the long-term downtrends being clearly intact as well.
LTC, for example, is still well below the $51 level which marked this week’s breakdown level, and bulls would need strong evidence of buying power before entering the markets of Litecoin, Ethereum, EOS, IOTA, and the other relatively weak coins.
While Bitcoin was in the epicenter of today’s move, it barely left the vicinity of the $6275 support/resistance level, and it remains the most stable major coin. The short-term sell signal and the neutral long-term signal in our trend model both remain in place and traders should still not open positions here. Support levels are still found at $6000 and $5850 while strong resistance is ahead at $6500, $6750, and $7000.
Still No Sign of Bullish Momentum Among Major Altcoins
XRP/USD, 4-Hour Chart Analysis
Ripple barely budged during today’s spike lower, and the coin is currently trading near the upper boundary of the key long-term support zone between $0.42 and $0.46. Despite the short-term stability, the sell signal in our tend model is in place, and we still remain suspicious about the long-term outlook, given the segment-wide trends.
For now, our trend model remains on a neutral long-term signal, and a move below $0.42 is still more likely with further support levels found near $0.375 and $0.355, and strong resistance zones near $0.51, $0.54, and $0.57.
ETH/USD, 4-Hour Chart Analysis
Ethereum is also trading higher after today’s volatile period, but the second largest coin is still stuck below the key $200 level, and in a declining long-term trend. With our trend model being on sell signals on all time-frames, traders and investors should stay away from the coin, and a move towards the $180 support level and the bear market low near $170 remains likely in the coming weeks. Further support is found at $160 while resistance is ahead at $235 and $260.
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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.
Featured image courtesy of Shutterstock.