Bitcoin Price: Risk of Reversal Fades as Market Stabilizes Near $7,000

The cryptocurrency segment was a sea of red on Thursday, with all of the majors sporting losses continuing yesterday’s dip. The leaders of the recent rally were all under pressure, losing around 10% compared to the swing highs. Bitcoin got back under $7000 as well, but for now, the most valuable coin and the major altcoins are all holding up above their initial support levels.

The previously week Ethereum and Litecoin also followed the broader market lower, and this week’s move continues to resemble a counter-trend move, so traders should remain cautious, as the broader declining trends remain intact. That said, the short-term outlook is still mixed, as despite the pullback several coins are still on buy signals, even as our trend model is flashing red with regards of the long-term outlook.

BTC/USD, 4-Hour Chart Analysis

Bitcoin fell as low as $6800 during yesterday’s pullback, but now, the coin is testing the $7000 level again, and the rising short-term trend is still intact. BTC is on a short-term buy signal despite the dip, but several strong resistance levels are ahead, and the long-term picture is still only neutral.

Traders could enter new short-term positions here, but given the bearish environment in the segment, risks remain elevated. Key support is found near $6750, with further levels at $6500 and $6275, while resistance is ahead between $7200 and $7300 and between $7650 and $7800.

ETH/USD, 4-Hour Chart Analysis

Ethereum tested the $275-$280 zone during the selloff, and although it managed to hold above the key price range, it remains the most important laggard of the segment. The coin is clearly in a declining broader trend, with the dominant trendline being far above the current price levels. The short-term sell signal remains intact, and the long-term outlook is also still bearish. Strong support is found near the recent $260 swing low, with resistance ahead at $300, $335, and near $360.

Altcoins Showing Promising Signs

XMR/USDT, 4-Hour Chart Analysis

On a positive note, the leaders of the rally continued to show strength amid the dip, and Monero already hit a new rally high, while Dash, EOS, and IOTA are also recovering quickly. That said, the broader downtrends are still dominant even in the case of the strongest altcoins, and traders should only enter short-term positions here. XMR is facing resistance at $108, $120, and $125, while key support is found at $100 and $80.

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to trade between the $0.32 and $0.35 levels, as it still failed to retain bullish momentum. The coin is relatively weak from a short-term perspective, and while our trend model is on a short-term buy signal, new positions are risky, especially given the dominant long-term downtrend. Further support levels are found at $0.3130, $0.30, and $0.26, while short-term resistance is ahead at $0.38.

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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.

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