Cryptocurrency Market Notches Three-Week High as Majors Lead the Rally

The last couple of days saw a distinct bullish short-term change in the cryptocurrency segment, which lifted the total value of the market to over $215 billion. The move has been led in particular by Ripple, Bitcoin Cash, EOS, and Stellar, but on a positive note, the rally is much broader than the recent bullish waves.

Stellar/USD, 4-Hour Chart Analysis

While the segment-wide technicals didn’t improve too much yet, with most of the majors still stuck in downtrends and below structurally important resistance levels, the current move finally has the potential to form a bullish leadership.

That said caution is still warranted especially given the muted inflows into Ethereum’s and Bitcoin’s markets. Our trend model is still overwhelmingly bearish with regards to the long-term signals, but the rally already triggered short-term upgrades.

Should the majors establish a pattern of higher highs and higher lows following the recent lengthy consolidation period, a major bullish base formation could be formed. We will take a look at that possibility in our long-term cryptocurrency analysis in the coming days.

BTC/USD, 4-Hour Chart Analysis

After Bitcoin avoided a test of the $6275 level, it returned to its previous narrow trading range, but the most valuable coin failed to join the rally so far, being stuck well below the $6500 level. With that in mind, traders still shouldn’t enter new positions, as although the long-term technical setup is still neutral, the short-term selling pressure remains apparent. The coin faces further strong resistance, at $6750 and $7000, while support levels are found at $6000 and $5850.

Ripple Eyes New Upswing as Ethereum Fights With Resistance

XRP/USD, 4-Hour Chart Analysis

Ripple regained its relative strength after a brief bearish period, and the third largest coin managed to top the $0.51 resistance level, hitting its highest level since early October, and giving bulls hope that the September break-out is still alive. XRP avoided a long-term sell signal despite the lengthy consolidation, and now even a renewed buy signal is a possibility, should the coin durably move above the $0.54 resistance.

For now, XRP is on a short-term buy signal in our trend model, and should the coin form a higher swing high, a new uptrend would be established. Ripple still faces strong resistance near $0.57, with targets above that ahead at $0.64 and $0.75 while the $0.42-$0.46 zone provides long-term support.

ETH/USD, 4-Hour Chart Analysis

Ethereum rose well above the key $200 level thanks to the broad rally, and the coin is testing the short-term resistance zone near $215, while also being close to a key long-term declining trendline. Given the stiff resistance just ahead of the coin, the $235 price level and another declining trendline, traders should still not enter positions here at least until a pattern of higher highs and higher lows forms.

Above $235, the next level of interest is at $260, with support levels found at $180 and $170, and the long-term setup is still clearly bearish, despite the current recovery attempt.

EOS/USD, 4-Hour Chart Analysis

EOS established a short-term pattern of higher highs and higher lows, triggering a buy signal in our trend model, but as the long-term trading range remains intact, the long-term sell signal is still in place.

The position of EOS well describes the current duality in the segment, and, as especially following the extended period of low volatility, the current move could already seem like a game changer, even though the long-term technical patterns are little changed. EOS faces strong resistance at $6 and $6.5, while support levels are found near $5.35, $5, and $4.55.

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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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