Short Positions on Ethereum Reach All-Time High on Bitfinex

The major cryptocurrencies have been trading in narrow ranges so far this weekend, especially compared to the volatile plunge of the recent days. While the lows set on Thursday are still holding up the market, and Bitcoin is showing encouraging stability again, the bearish long-term forces are still clearly dominant.

The major altcoins are all under heavy selling pressure, and especially Ethereum is looking weak on all time-frames, weighing heavily on the segment. While volatility declined considerably today, correlations remain very high, and despite the fact that most of the majors are trading above their August lows, odds still favor another leg lower in the broad downtrend.

With that in mind, traders shouldn’t enter new positions even in the relatively stronger coins until at least a short-term trend change, with our trend model also being on a short-term sell signal across the board. We will take a closer look at the long-term patterns once again, in our long-term cryptocurrency analysis coming out later this weekend.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still below the broken short-term trendline while trading above the key $6275 support level. The August lows are well below the current price levels in BTC’s market, and coupled with the fact that the largest coin held up above the crucial long-term zone near $5850, bulls still have the hope that the market is in a broader bottoming pattern, and BTC will lead a more durable rally in the coming months. For now, BTC is on a short-term sell signal while still being neutral from a longer-term perspective. Further support is found at $6000 while resistance levels are ahead at $6500, $6750, and near the $7000 level.

ETH/USD, 4-Hour Chart Analysis

The relatively weak Ethereum is barely holding up above this week’s low, still threatening with a breakdown towards the $205 and $180 levels, with the structural bearish trend clearly being intact. Our trend model is on sell signals on both time frames, and ETH is facing strong resistance at $235 and $260, so traders still shouldn’t enter new positions here.

Bulls Trying to Hold Their Ground Above August Lows

IOTA/USD, 4-Hour Chart Analysis

Most of the smaller altcoins managed to avoid a breakdown to new long-term lows together with Ripple, but given the weak bounce of this week’s minimum levels, a test of the lows seems likely in case of the majority of the top coins.  EOS and IOTA are both among the weaker currencies even as IOTA is well above the August low, as the coins failed to get close to their structural break-down levels during the recent rally.

EOS/USD, 4-Hour Chart Analysis

EOS seems to be ready to test the lows in the coming weeks, showing relative weakness compared to the rest of the market, and turning lower off the short-term resistance line near $5.40 on Friday. Above the low near $4.20 another weaker support level is found at $4.55, but traders shouldn’t enter the market here, as a drop to $4 is likely in the coming weeks.

XRP/USDT, 4-Hour Chart Analysis

Ripple is once again among the weaker coins from a short-term perspective failing stay above the $0.30 level following the recent bounce. The currency is drifting sideways together with the broader market today, but a move towards the $0.26 support and the August lows seems inevitable. Further resistance is ahead at $0.3130 and $0.32, while the next major support zone is found near $0.23.

Featured image from Shutterstock

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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