Bitcoin’s Market Dominance Nears 50% for the First Time in Five Months

Fibo Quantum

The counter-trend rally continued in earnest in the cryptocurrency segment in the past 48 hours, with the majors forming yet another short-term swing low and hitting new correction highs. Some of the most oversold coins have been leading the move so far, and the early leaders, such as Litecoin and Ripple remained strong while others joined the strong momentum move, pointing to a more sustained move to the upside after the recent rout in the segment.

That said, the broader downtrend is not in danger in the case of the top coins, and while short-term further gains are still likely, investors should treat their positions as short-term trades, with at least, a retest of the lows still being the most likely scenario in the coming months. For now, our trend model remains on buy and neutral short-term signals, but with sell long-term signals still being in place across the board.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been showing relative weakness so far today, despite trading clearly above the key $4000-$4050 zone, and scoring a new correction high. Despite the short-term weakness, the coin remains on a buy signal in our trend model with regards to the short-term time-frame, while being on a clear sell signal from a long-term perspective.

Targets for the counter-trend rally are still ahead near $4450 and in the $5000-$5050 zone, and short-term traders could still trade on the long side, with the broader picture still being oversold in the wake of the recent rout, with further key support zones found near $3600 and $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum has been leading today’s rally, and the coin got topped the $150 level and got close to the strong $160 resistance level which also coincides with two broader downtrend lines. We don’t expect the coin to sustainably extend the move above the zone of strong resistance zone, and traders should reduce their short-term positions here.

Further strong resistance is head near $180, while support is now found near $130 and $120, and despite the stellar rally, the long-term picture remains clearly bearish.

Rally Remains Broad-Based as Holiday Season Kicks Off

IOTA/USD, 4-Hour Chart Analysis

While several major altcoins got clearly overbought from a short-term perspective, the long-term trends are unharmed by the move, showing the extent of the recent sell-off, which caused historical losses across the segment. With the broader setup in mind, traders should reduce their positions in the most overbought coins. IOTA, which has been among the weakest top coin during the rout surged up to the $0.40 level today, completing a 100% rally.

Despite the extent of the move, the long-term downtrend remains intact, and before a broader pattern of higher highs and higher lows is established, odds will still favor at least a retest of the bear market lows.

LTC/USD, 4-Hour Chart Analysis

Litecoin reached the initial target for the move at $34.50, while becoming overbought from a short-term perspective again. While the counter-trend will likely continue, short-term traders should wait for a pullback before entering a market, and still, the future positions should be treated as short-term traders with strict risk management. Support is still found in the $30-$30.50 zone and near $26, while further resistance is ahead near $38

XRP/USDT, 4-Hour Chart Analysis

Ripple re-entered the key long-term $0.42-$0.46 support/resistance zone, after spiking above $0.40 and similarly to Ethereum and Litecoin, the second largest coin is now also overbought, and traders should wait with entering long positions, even as the rally will likely continue. The long-term sell signal remains intact, with further resistance ahead near $0.51, and with support found at $0.3750 and $0.3550.

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.