Bulls were only in control for a short period during the weekend, as the declining short-term trend continued in the cryptocurrency segment. Most of the majors hit marginal new lows today in early trading, and small caps are also under pressure, as correlations between the coins spiked higher again. Bitcoin is holding up relatively well amid the selloff, trading right at last week lows, after breaching the weekend trading range this morning.
Given the weakening bearish momentum and the favorable long-term setups, a failed breakdown and a quick recovery could point to a durable bottom here. That said, until further signs of strength, short-term traders should still stay away from new positions in case of most of the coins. While BTC gathered relative strength, and Ripple, IOTA, and Bitcoin Cash also held up, Ethereum has been leading the way lower, with Monero and Dash also lagging the broader market.
BTC/USD, 4-Hour Chart Analysis
BTC broke below the $7350 level, exiting the weekend range, but the coin remained stable, and the momentum of the move is weak so far, while the MACD is still showing a positive divergence. Despite that, the declining trend is clearly intact and with the strong resistance zone between $7650 and $7800 still ahead, traders should still wait before entering new positions. Above that further resistance is found at $8400 and $8700 and between $9000 and $9200, while support is at $7000 and $6750.
ETH/USD, 4-Hour Chart Analysis
Ethereum is trading on a new low after the overnight plunge, and it is relatively weak from a short-term perspective, although compared to the April low the coin is still among the stronger majors. ETH fell below the $555-$575 support zone today, and could be headed for a test of the next major level at $500. The currency is now nearing oversold levels with regards to the long-term momentum indicators, so investors could already add to their holdings, while traders should wait for a trend change before entering the market, with further resistance ahead $between $625 and $645.
Ripple Finds Support Again
XRP/USD, 4-Hour Chart Analysis
Ripple followed the broader market lower today in early trading, but it remains near last week’s low as it only briefly broke below the key $0.5750 support level. The coin is showing a positive momentum divergence, but for now, the short-term trend is clearly negative. While we expect a durable bottom to form soon, traders should still not enter new positions here, but Ripple will likely be among of the leaders of the next leg higher.
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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.