Over the last few hours, a number of cryptocurrencies experienced an attempted breakdown below support and a rapid reversal.
However, this (somewhat) clear manipulation attempt didn’t change the overall technical scene. The top cryptos are back to where they were, stuck in their dormant trading ranges, and the short and long-term downtrends are exactly the same. While the recovery might be a sign of an impending bottom (too soon?), there is no technical evidence of a sustained rally, and traders and investors should still go back into the market with extreme care.
Although volatility and trading activity are low, the lack of any bullish momentum – or volume for that matter – continues to point to an ongoing bear cycle. The majority of altcoins followed Bitcoin’s minor breakout, especially the rest of the top-10 cryptos. However, with still no sign of bullish leadership developing, odds continue to favour a move towards bear market lows in the coming weeks.
Bitcoin is still stuck below the key $3,600 support level following the failed breakdown attempt and quick recovery, and although the king continues to be relatively stable, the overall setup remains bearish.
Barring a move above primary resistance, I expect a test of the $3,250 level and likely the $3,000 support as well in the coming weeks.
What about the altcoins?
Ethereum (ETH) also recovered from a sudden dip below the short-term $112 support level, but it continues to trade below $120 despite the recovery. ETH continues to be relatively weak compared to its peers, and I still expect a move towards the key support zone between $95 and $100.
Litecoin (LTC) is showing relative strength since the failed breakdown, especially as the short-term trading range is also intact. With that in mind, LTC support is still found at the $30 level.
Finally, Ripple (XRP) continues to be the weakest among the top coins from a technical perspective, trading on the key $0.32 level and failing to show signs of bullish momentum after a failed breakdown. A move below $0.30 looks very likely.