The cryptocurrency segment continues to be two-faced, with the relative strength of Bitcoin showing stark contrast compared to the broad weakness in altcoins. Selling pressure is still apparent across the board, with a few smaller coins somewhat defying the dominant trend, and most of the majors are trading near their August lows, as the market is trying to establish a more durable bottom.
Thanks to the divergence, and especially the persistent weakness in Ethereum and Ripple, Bitcoin’s dominance is on a new year-to-date high again, passing the 56% mark for the first time since December. The total value of the market is stuck below the $200 billion mark, despite Bitcoin’s stability, as the restructuring of the market continues. Correlations are still very high between the largest coins, as bearish market conditions persist, and we expect a rise in volatility in the following the relatively calm weekend.
BTC/USD, 4-Hour Chart Analysis
Bitcoin held up above the $6275 support despite the heavy selling in altcoins and it is still well north of the crucial zone near $5850 after the weekend. A test of that zone still seems likely in the coming weeks, even though the stability of the largest digital currency is encouraging here. The coin remained on a short-term sell signal, while still being on a neutral long-term signal in our trend model. Traders should still not enter new positions here, especially given the segment-wide selling pressure, with resistance zones ahead near $6500, $6750, and $7000, and with further, weak support near $6000.
ETH/USD, 4-Hour Chart Analysis
Ethereum fell to the lowest level in 14-month during the weekend, violating the $205 support, and getting very close to another crucial long-term zone near $180. While the second largest coin managed to bounce back to $200, it remains in a steep short-term downtrend, and in a clearly bearish long-term pattern.
The coin is oversold after the recent plunge, but as the market is still controlled by sellers, traders shouldn’t enter new positions here. Our trend model is on sell signals on both time-frames, and the coin faces further strong resistance near $235, while support below $180 is found at between $155 and $160.
Dash Defying Gravity in Hostile Market
XRP/USDT, 4-Hour Chart Analysis
Ripple is still among the weakest coins from a short-term perspective, and it failed to rally in the calmer weekend market. The coin is dangerously close to the August lows near the $0.26 support, and a test of that level is very likely in the coming week. A break below the low would open up the way to $0.23, the next major support level, and traders should still stay away from Ripple. The broad downtrend remains clearly dominant, with resistance still ahead at $0.30, $0.313, and $0.32,
DASH/USD, 4-Hour Chart Analysis
Dash has been showing relative strength in the past few days, drifting higher despite the heavy selling in the segment, and reaching the $200 level again. From a long-term perspective, the coin is still clearly in a declining trend, and the current outperformance wasn’t enough to change the short-term signal in our trend model, but a move above the recent swing high near $220 would confirm a trend change. For now, odds still favor a test of the August lows in the bearish market environment, and traders should wait for further evidence of strength before entering the market.
LTC/USD, 4-Hour Chart Analysis
While Litecoin avoided the test of the August lows so far, despite last week’s steep selloff, the coin remained weak during the weekend, and a move towards $50 is very likely in the coming days. The weak rally attempts all failed in LTC, and although a successful test could still set up a durable bottom, sellers are still in control of the market, and traders shouldn’t enter new positions.
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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.