The cryptocurrency segment is having its most boring period in a long-time, with no significant moves in the majority of the coins since the Sunday dip and the subsequent rebound. The major coins attempted a rally overnight, but last week’s highs proved too strong yet again in the case of most of the currencies. That said, the coins are not far off from the swing highs, and the low-volume, low volatility consolidation still points to the healing of the battered segment.
As the old trading wisdom goes: “Never short a dull market”, and although the bottoming process is definitely not over, odds now favor a re-test of the prior lows as a worst-case scenario, with a lot of coins expected to outperform on the down-swings. While the current environment might be frustrating after the furious price swings of the previous weeks, patience is required to avoid over-trading.
As BTC still hasn’t formed a pattern of higher highs and higher lows, short-term traders should remain cautious with opening new positions, despite the positive long-term outlook, and volatility could surge again before a confirmed uptrend.
BTC/USD, 4-Hour Chart Analysis
The support zone near the $7650 level is still looking strong, while the coin continues to challenge the $9000-$9200 resistance area that coincides with the steepest large-scale declining trend. In the case of a break-out, the next levels to watch are at $10,000 and $11,300, while the short-term dips should still be used by long-term investors to accumulate the coin.
ETC/USD, 4-Hour Chart Analysis
ETC added to yesterday’s gains, breaking above the dominant declining trendline, while entering overbought territory again from a short-term perspective. We expect the rally to pause, as the coin ran into strong resistance between $32 and $34, and another pull-back is now likely, with support at $30, in the $27-$27.50 zone and at $25.
LTC/USD, 4-Hour Chart Analysis
The other altcoins are mixed, with a slight bearish bias in the quiet environment, but the overall picture remains encouraging, as most of the largest digital currencies are trading in bullish consolidation patterns after the strong bounce, similarly to Litecoin. Stay tuned for our detailed technical analysis later on today.
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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.