Another oversold bounce faded today, as the whole segment is under pressure once again, as yesterday’s broad rally reversed, with both the majors and the small-cap leaders of the advance taking a sizeable hit. As the downtrend in the segment is clearly intact, there are still no majors on a short-term buy signal in our trend model, although the long-term picture is oversold.
With Ethereum still lagging the rest of the market and Ripple losing its relative strength after a brief period, last week’s technical setup is still dominant even as the coins are trading above the weekend lows. Technicals remain the most important factor in price action, as correlations between the majors continue to be elevated, in line with the trend.
BTC/USD, 4-Hour Chart Analysis
Bitcoin is back in the key long-term support zone between $6750 and $7000, after falling back below the prior swing low near $7300 together with the broader market, with the short-term downtrend being intact. The low from last week is found at $6425, and the coin needs to stay above that to avoid a likely test of the February minimum, with another support level found at $6250.
ETH/USD, 4-Hour Chart Analysis
Ethereum fell back below the $400 level amid the selloff, and the coin’s weakness is still weighing heavily on the market, as it failed to stay above even the weekend bounce highs, confirming the selling pressure. As the downtrend is still strong, the coin remains on a short-term sell signal, with further resistance ahead near $450, $500, $625.
XRP/USDT, 4-Hour Chart Analysis
XRP’s advance was halted by the key resistance zone between $0.54 and $0.58, and the third largest coin failed to hold on to its gains, retreating to the $0.50 level. The leading small-cap coins Verge, Vechain, Binance Coin and Bitshares are all trading below their highs from yesterday while Litecoin, Monero, Stellar, Dash, and Cardano are also following the market lower.
As the probability of a durable rally is getting higher, a successful test of last week’s lows would be a great development for bulls, but until clear signs of short-term strength, traders should remain defensive here.
Stay tuned for our detailed long-term technical analysis coming out later on today.
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