The cryptocurrency segment settled down following the Bitfinex-induced plunge, with the majors all holding up above their weekly lows. While the current stability, and especially BTC’s relative strength is encouraging, we haven’t seen signs of bullish momentum that would warrant a constructive stance towards the top digital currencies.
With long-term technicals still being clearly bearish and the short-term trends also being overwhelmingly negative traders should remain defensive towards the segment, and our trend model remains on sell signals on both time-frames for all of the majors. We continue to pay close attention to Ethereum as the second largest coin has been a good indicator of the overall direction in the segment, even in the face of BTC’s relative strength.
While the weekend might remain quiet, the majors remain in a peculiar short-term technical position, and a move below the initial support levels could trigger another steep sell-off, so downside risks remain dominant in the market.
ETH/USD, 4-Hour Chart
Ethereum is holding up well above the $145 support thanks to today’s drift higher, but the coin is still way below the line-in-the-sand $160 resistance, leaving are trend model firmly on sell signals on both time-frames. ETH saw a steep drop in trading volumes following the sharp sell-off, and for now the hope of another leg higher in the counter-trend move is still alive.
That said, the bear market is likely to continue, despite the strength of Bitcoin and the current stability in altcoins, and even in the case of a recovery, only short-term positions should be considered. Above $160 further strong resistance is ahead near $180, while below the initial zone support zones are found near $130 and $112.
BTC/USD, 4-Hour Chart Analysis
Bitcoin is still trading below its previous swing high near $5400, but it remains among the strongest coins from a short-term technical perspective, with the $5050 level being in no danger here. While the…