The counter-trend rally in the cryptocurrency segment continues, and after a period of consolidation, Litecoin has been showing strength today in early trading. Ethereum, the other relatively strong top coin is also higher today, while the likes of Tron and Cardano are also up, but for now, the lagging majors, such as Ripple and Bitcoin still haven’t joined the move, weighing on the segment’s performance.
As we reiterated several times this week, odds continue to favor the continuation of the corrective rally, with correlations and volatility still being relatively low. That said, from a long-term perspective, the majors are still clearly in bear markets, and as the oversold momentum readings are quickly being cleared, a short-term top will likely form in the coming couple of weeks.
Traders and investors could still remain in short-term positions, with strict risk management rules and a focus on the relatively stronger coins, but we would need to see strength in the laggards in order to keep up the bullish momentum in the market.
LTC/USD, 4-Hour Chart Analysis
Litecoin finally exited the volatility compression pattern of the recent days, and the prior leader of the counter-trend move is back near its recent swing high, eyeing a break-out and a rally towards the $38 resistance level.
LTC is still on a clear short-term buy signal in our trend model, despite the bearish long-term setup, with further resistance ahead near $40 and $44, and with support found between $30 and $30.50 and near $26. Above $38, traders should reduce their positions, with a strong declining broader trendline also providing resistance in the $40-$41 area.
ETH/USD, 4-Hour Chart Analysis
Ethereum rallied back above $150 and touched the $160 resistance today, but for now, a clear move above the key long-term level didn’t happen. The coin continues to show relative strength but the lack of momentum is a bit worrying for bulls here. A move to $180 is still likely in the coming weeks, as the short-term uptrend is intact and our trend model is on a clear buy signal.
That said, given the extent of the counter-trend move, the risks are increasing that the bearish long-term trend will resume, so traders should reduce their exposure and use strict risk management strategies, even as the tally will likely continue. Below the initial short-term level near $145, support zones are still found near $130, $120, and between $95 and $100, while further resistance is ahead near $200.
Bitcoin and Ripple Struggling to Find Momentum
BTC/USD, 4-Hour Chart Analysis
Bitcoin got to a standstill in the past few days, with low trading volumes and volatility dominating the market of the most valuable coin. The $4000-$4050 resistance zone and the $3600 support level continues to be in focus, and the short-term momentum indicators are neutral thanks to the lengthy consolidation phase.
Our trend model still on a short-term buy signal, despite BTC’s relative weakness and the bearish long-term setup, but traders should continue to focus on the leaders, until we see bullish momentum in the laggards. Further resistance is ahead near $4450 and between $5000 and $5050, while support below $3600 is found near $3250 and $3000.
XRP/USDT, 4-Hour Chart Analysis
Ripple continues to trade in the close vicinity of the $0.3550 support level, being the weakest among the top coins, severely lagging the leaders of the move. For now, the coin remains on a neutral short-term trend signal, but given the negative long-term outlook and the maturing counter-trend move, traders shouldn’t enter new positions here barring a strong break-out on the upside.
Primary resistance is ahead near $0.3750 with the key long-term resistance still ahead in the $0.42-$0.46 zone, while support is found near $0.32 and $0.30.
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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.