Major cryptocurrencies kept declining last week after a failed bullish try to recover. Sellers were dominating in the crypto market with the largest volume noticed during the weekend. Litecoin was the weakest cryptocurrency with -7.1% weekly result, while other major coins’ performance was seen at a slower pace on the downside. Bitcoin struggled to consolidate, losing -4.3% of its value, while Etherium, Bitcoin Cash and EOS were hit hard with 7-days change of -6.0%, -5.5% and -5.4%, respectively. Ripple managed to limit the losses with only -3.4% decline. Tether kept surprising in the scope of market cap, holding the second place with 24% of the trading volume in the last 24 hours, while Etherium (16%) was the third largest coin to trade on, right after Bitcoin (32%). The technical outlook remains negative for most of the cryptocurrencies and here is why.
Bitcoin failed to hold gains after the upside consolidation last week. The test of $3900.0 level failed as sellers stepped in with heavy volume. BTC/USD remained in the descending channel, sliding below the simple moving average with 50-bars period. Moreover, the recent bearish price action pushed Bitcoin price towards the bottom line of the channel, signalling further weakness in the nearest future. THe four-hours chart below represents a bearish continuation formation with lower lows and lower highs sequence. The best trading strategy would be sell-highs approach with key resistance levels to be monitored: SMA50 slightly below $3700.0 and static horizontal line around $3771.0 (the lowest price on December 31. That range is attractive for short positions targeting lows around $3215.2. On the other hand, strong technical resistance is currently placed at $3900.0 and, if breached, we might see more gains for BTC/USD. However, such a bullish scenario is less likely as long as prices stay under the selling pressure.
Ripple remained offered despite the upside spike last Saturday. The intraday H4 chart shows oscillators in the negative territory, pointing to continuous bearish momentum in play. Willams %R is rather oversold though. However, slower RSI oscillator is comparatively far from the oversold zone, leaving the room for more bearish achievements. The lack of any signs for reversal divergences confirms the negative technical sentiment for XRP/USD. The current price stays in the upper range of consolidation range seen in December, so a bullish bounce is possible before breaking the support around 0.3200. But we do not expect such a whipsaw to be deep, limiting possible gains around 0.3250 where we would consider selling Ripple in the short-term perspective.
Etherium has rather mixed technical outlook intraday. Slow MACD indicator shows uncertainty on the one-hour timeframe with its histogram hovering around zero levels. MACD lines have some preliminary signs of a bullish divergence, however, it’s not confirmed by the fast RSI oscillator. Such a mixed picture points to further consolidation rather than the bullish reversal. Moreover, the latest whipsaw towards $108 support indicates that the market players are trying the water below the current price in order to find where defensive buy-orders are placed. That usually means the market’s intentions to push the asset lower. On the other hand, the rapid bounce from the range of $108/112 showed the Etherium bulls' strength and the fight would not be easy for both sides. We expect ETH/USD to retrace towards 34-hours simple moving average before going further South. So, the range of $120.0/121.5 would be attractive for fresh short positions.
In contrast to Etherium, Litecoin charted a bearish divergence on the H1 timeframe. The double-top reversal pattern with consecutive higher close prices at $33.599 and $33.697 was confirmed by the bearish divergence on MACD and RSI (green lines). That strong technical signal indicated bulls’ weakness and bears did not hesitate to push Litecoin lower to $30.0 bottom. The recent price action is aimed to consolidate some of the previous losses, as well as reload technical indicators before charting new lows once the bearish momentum gain strength. The sell-end-hold trading strategy is preferable with tight targets though, as the support level of $30.0 does not look like an easy nut to crack for the bears yet.
EOS is still in the consolidation phase despite the lack of any bullish achievements. Ichimoku Cloud trend indicator has a mixed sentiment on the H4 chart below. Its both lines are inside the span, signalling uncertainty. The latest bullish retracement failed to test the upper range of the cloud, being limited around 2.6000 round figure. However, there are no lower lows on the medium-term outlook, so the next bearish performance might be short-lived. At the same time, buying EOS would be a too early decision as the larger technical picture has to complete the reversal pattern before going North. So, we would recommend using a wait-and-see approach for EOS/USD.