The major cryptocurrencies experienced a low-volume dip in the second half of the weekend that concluded a generally bullish week. The pullback didn’t cause major technical damage, with the important support levels holding up, and now the coins are likely headed for a test of last week’s highs. The stock market sell-off that has been influencing trading last week seems to have paused for now, but another surge in volatility could still cause turmoil in the crypto sector as well.
That said, price action remains encouraging with the positive signs that emerged last week still being present, although a new uptrend is still not established, and the down sloping trend channels remain intact in most cases.
BTC/USD, 4-Hour Chart Analysis
Looking at Bitcoin’s chart, the two main levels of interest are still the $7650 support, which hasn’t been in danger during the weekend, and the $9000-$9200 resistance zone that capped the advance last week. A clear move above resistance would confirm a pattern of higher swing highs and higher swing lows, which together with the positive volume patterns and the declining volatility and correlations in the segment would reinforce the bullish picture.
A weaker resistance level is found at $9500, with further levels at $10,000 and $11,300 ahead, while support below $7650 is between $6750 and $7000.
ETH/USD, 4-Hour Chart Analysis
Ethereum is in a similar short-term pattern, despite a slight outperformance compared to BTC from a technical standpoint since the Monday low, with the $740 support corresponding to the $7650 level in Bitcoin, and the weaker $900 level serving as primary resistance currently.
The largest altcoin is still in a downtrend as well, and although the final cycle low is likely already in, short-term traders should still expect volatile swings and sharp pullbacks as the bottoming process concludes. That said, investors could still use the dips to accumulate the token, with further support levels at $625 and $575, while resistance ahead at $1000 and $1175.
Ethereum Classic Pushing Higher Again
ETC/USD, 4-Hour Chart Analysis
ETC continues to lead altcoins, already breaching last week’s highs today in early trading. While the coin is also in a dominant downtrend, it’s close to confirming a trend change, while the previously strong Ripple is slightly weaker today after the correction.
The ongoing rotation between the coins is a healthy sign, and an increase in correlations would warn of a down swing in the bottoming process. Dash, Monero, Cardano, Stellar, and IOTA are among the relatively weaker coins today, while Litecoin and NEO are performing well in the mixed market. We expect the coins to diverge even more in the coming period, as the bullish cycle is established.
Stay tuned for our detailed technical analysis later on today.