The top cryptocurrencies continue to trade with a bullish short-term bias, and thanks to the two-day rally, the technical picture improved across the board. The odds of a failed breakdown pattern increased in the segment, with Bitcoin clearly recovering above the prior low, joining Litecoin in the move, even as most of the major altcoins continue to trade below the panic lows.
Despite the encouraging short-term shift in the market, given the still overwhelmingly bearish long-term outlook traders should still only consider ultra-short-term positions, as even a short-term trend change is not confirmed yet. That said, we still expect a larger-scale bounce in the coming weeks, in particular after the clear weakening of the bearish momentum following the damaging rout of the past weeks, since sentiment became extremely negative.
BTC/USD, 4-Hour Chart Analysis
Bitcoin is now testing the steeply declining short-term trendline after successfully rallying above the key $4000-$4050 level which marked last week’s initial panic bottom. The coin is now on a short-term buy single in our trend model, but as we pointed out before, the long-term setup still only justifies ultra-short-term long positions in the most valuable coin, with strict management.
The coin already got close to the next, weaker resistance level near $4450, and above the $4000 level, bulls are in control of the market, at least from a short-term perspective. The next major resistance zone is ahead between $5000 and $5100, while support is found at $3600 with a crucial long-term zone near $3000.
ETH/USD, 4-Hour Chart Analysis
Ethereum is still signs of relative weakness despite the fact that the coin managed to recover above the $120 level.