Market update: Bitcoin pulled down by sellers

While the majority of cryptocurrencies had a quite bullish Saturday following a negative week, the market continues to be controlled by sellers.

I still haven’t seen meaningful technical progress in the top-20 coins, with even the short-term resistance levels proving too strong in this illiquid environment. As we start a new week, the top cryptocurrencies have been drifting lower despite an overnight spike higher, which was led by Litecoin and EOS, and most of the coins are now unchanged from the weekend.

With the long-term picture still being overwhelmingly bearish, and given the failed rally attempts this week, another downswing towards the prior bear market lows is likely in the coming weeks.

Still, I’ll remain hopeful. At some point, sellers will exhaust themselves and buyers will take control.

Let’s start our weekly analysis with the king.

Bitcoin

The leading digital currency has made several attempts to climb back above the $3,500 threshold, but has failed to do so in a convincing way. From a technical perspective, Bitcoin must return above $3,550 to avoid another bearish week.

Bitcoin tested its primary resistance zone just above the $3,450 price level, but it failed to re-enter its prior trading range, and the rally attempts still lack momentum despite the coin’s relative stability. While the prior bear market low remains safe (for now), the short and long-term downtrends are intact and the price action continues to indicate strong selling pressure.

Volume remains around $5 billion daily.

Above the primary zone, further resistance is ahead near $3,600, $3,800, and between $4,000 and $4,100, while support is found near $3,250 and $3,000, as shown by the EMA trendlines.

Ethereum

Ethereum is also showing similar relative weakness, and although it got close to the $112 level yesterday, it is still vulnerable from a technical perspective, and a dip below the key $95-$100 level is likely ahead. A bearish move could lead to an imminent test of the prior bear market low, as we saw in December 2018, and the strong declining trends are intact in ETH’s market.

Above $112, further strong resistance is ahead near $120 and $130. If Ethereum rallies, its price can hopefully land in between the 50 and 100-day EMA, so anywhere from $124 to $149.

I would argue, from a fundamentals point of view, the market is still hopeful for the Constantinople update sometime in Q1 2019.

Ripple

XRP declined 1.5% to $0.3028 over the weekend. The so-called ‘cryptocurrency for banks’ enjoyed a sudden burst higher on Wednesday last week after the Swift messaging service announced it was partnering with a blockchain start-up to test a new global payment standard.

Despite this, Ripple performed relatively poorly over the weekend, and since the mid-week rally attempt, the coin failed to show bullish momentum and the $0.30 level is yet again in danger. I still expect a move below the $0.28 price level, with a likely test of the September low near $0.25. The lack of follow-through following the spike higher is a negative sign for the whole segment.

The coin remained on sell signals despite the rally attempt, and there is strong resistance ahead between $0.34 and $0.37.

Litecoin

Litecoin continues to outperform its most important peers after a strong weekend where the coin made it to the upper boundary of its short-term range, testing the $34.50 resistance level. However, the coin failed to break out above the range and sellers seem to have taken control for the time being.

A sustained move above this range would indicate a short-term trend change, but until we see further evidence of a bullish move, traders shouldn’t enter positions, especially in light of the segment-wide trends. Key support is found between $30-$30.50 and near $26, while further resistance is ahead near $38.

Let’s all have a great week ahead!