Volatility and trading volumes have been trending lower in the cryptocurrency segment in recent days, with most of the major coins staying dangerously close to their recent lows. While some of the oversold coins experienced stronger bounces, the previously stronger currencies have been underperforming, and this bearish rotation points to further troubles, at least short-term. The majors sold off in a concentrated fashion following the end of the Wall Street session, and a test of the lows is already underway.
The long-term outlook remains mixed, with a bearish bias for the top coins, as the weakest coins are trading below structural support, confirming their recent breakdown, while the rest of the majors are hovering near or just above their respective support levels.
Although there were a few positive outliers in recent days, there is clearly not enough momentum to support a broad rally, and traders should remain cautious with new positions until the coins show meaningful short-term strength.
BTC/USD, 4-Hour Chart Analysis
Bitcoin turned sharply lower in late trading, tumbling below $6000, and although it bounced off the crucial $5850 support level yet again, the most valuable coin is still in a precarious technical situation. The long-term trend signal is close to turning negative, and a meaningful move lower here, would be a bearish sign for the whole segment. Support below $5850 is found between $5400 and $5500 and at $5000, while resistance is ahead at near $6275, $6500, and $6750.
Ethereum Struggling to Hold Ground as Monero’s Rally Attempt Fails
ETH/USD, 4-Hour Chart Analysis
Ethereum is back at the $420 level which corresponds with last week’s low, and the coin’s short-term weakness is still apparent. ETH failed to gain momentum after the weekend bounce and now a move towards $400 is likely, with the coin still being on a short-term sell signal, even as the long-term bullish setup is intact. Further support below $400 is found at $380 and $360, while resistance is ahead at $450 and $500.
XMR/USDT, 4-Hour Chart Analysis
While some of the currencies in the weakest long-term setups experienced sharp bounces, the relatively strong rally in Litecoin failed, and Monero’s strength is also quickly fading, and now, there is no major coin showing bullish signs from a short-term perspective.
XRP/USDT, 4-Hour Chart Analysis
The previously stronger coins, Ripple, IOTA, and EOS are under pressure too, as correlations are near record levels among the top coins, and all of the majors are on short-term sell signals according to our trend model.
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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.