While the top cryptocurrencies sold off in a concerted fashion today in early trading, and the relatively weaker coins fell below their short-term support levels, the segment once again avoided a decisive break-down in the low-volume environment. With the bearish momentum still being weak, the immediate outlook is rather neutral, but given the negative long-term trends, and the recent failed break-outs, there is still no good reason for bulls to enter the market here.
ETH/USD, 4-Hour Chart Analysis
Ethereum led the way lower, as we expected following the extended period of relative weakness, but for now, the third largest coin held up above the key $95-$100 support zone, despite hitting a 7-week low below the January swing low. Bitcoin and the major altcoins followed ETH lower, with still no sign of a developing leadership in the market.
Ethereum remains under clear selling pressure, and barring a quick recovery above the primary resistance zone near $112, a dip below $95, towards the prior bear market low near $80 is likely ahead in the coming weeks. ETH’s weakness, together with Ripple’s bearish technicals, is a warning sign for crypto bulls, and the coin faces further strong resistance zones, near $120 and $130, with our trend model being on sell signals on both time-frames.
BTC/USD, 4-Hour Chart Analysis
Bitcoin tested its recent swing low just above the $3300 price level today, but it managed to bounce back without a decisive move toward the $3250 support level. That said, the outlook for the coin remains negative and until, at least, a move above the recent trading range, risks will be heavily skewed to the downside.
With that in mind, traders and investors should still stay away from BTC, as the test of the key long-term support zone near $3000 remains likely, and the prior bear market low is unlikely to stop the current short-term downtrend. The long-term trend is also clearly negative, with further resistance ahead near $3600, $3850, and between $4000 and $4050 and the coin remains on sell signals on both time-frames.
Ripple Breaks Below $0.30 as Litecoin Turns Volatile
XRP/USDT, 4-Hour Chart Analysis
Ripple followed the broader market lower today, falling clearly below the $0.30 support that has been in focus for days now, and although the coin is still holding up above the key $0.28 level, bulls are facing hostile technical conditions.
Last week’s failed rally attempt, combined with the steep long-term downtrend make a break-down very likely, with a possibly quick move towards the August low near $0.26 afterward. The coin remains on sell signals on both time-frames in our trend model, with further strong resistance still ahead near $0.32, $0.3550, and $0.3750
LTC/USD, 4-Hour Chart Analysis
We warned yesterday that Litecoin was vulnerable to a broad sell-off despite its recent relative strength and today, the coin spiked as low as $30.50, the upper boundary of the key $30-$30.50 zone, despite trading above $34 on Tuesday.
LTC remained on sell signals on both time-frames in our trend model, and a move below the primary support zone, towards the $26 level, still seems likely in the coming weeks. Further support is found near $23, at the prior bear market low, while resistance is ahead at $34.50 and near $38, and traders should still not enter new positions here.
Stellar/USDT, 4-Hour Chart Analysis
While the relatively stronger coins failed to show bullish momentum during the recent low-volume, low-volatility period, the bearish leaders continued to suffer, confirming the negative market-wide pressures.
Stellar has been among the weakest coins in recent weeks, and after violating its prior bear market low near $0.09, the coin continued the waterfall decline, hitting fresh new lows today as well. Despite the steep losses investors should stay away from Stellar and the other relatively weak coins, until we see signs of accumulation in the segment.
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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.