Analysis: Cryptocurrencies Test Supports as Regulatory and Hard Fork Risks Loom

The major coins are still in short-term correction mode after last week’s strong rally, as BTC dipped by more than 10% off its highs. The most valuable coin dipped below $2450 but rebounded of the strong support zone near that level, while the short-term MACD indicator is headed towards oversold territory already. With the long-term picture still supporting more upside, this is likely a good entry point for traders, while the $2300-$2350 zone provides a relatively narrow stop loss opportunity.

BTC/USD, 4-Hour Chart Analysis

The other majors are also lower but Dash is still showing strength, while Litecoin, Ripple, Monero, Ethereum Classic, and Monero are holding above or near strong support zones.  The correction was partly triggered by a wave of regulatory news coming from the SEC and China, and although smaller coins were more affected by the announcements, the whole segment got under pressure.

BTC also sold off on the news regarding a fork attempt, Bitcoin Cash, but so far, the losses are limited compared to the recent gains, and break-out from the declining trend remains intact, despite the continued fears regarding the 1st of August. With the most important majors trading at critical levels, let’s see how the charts are shaping up.

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum fell back to the key $200 level, as it got dragged lower by the broad weakness in the sector. The token continues to trade in a declining trend, lagging BTC and the relatively stronger coins. Strong support is found near $170, but a move back to test the $235-$250 resistance zone is more likely, with the long-term picture being constructive after the deep correction.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin tested the $40 level during the current dip, while remaining in the trading range that developed after the strong rally in June. The coin still looks neutral regarding the long-term picture and that could mean further sideways trading before a likely move to the %58-$60 zone. Crucial support below $40 is still found near the $38 level.

Dash

 

DASH/USD, 4-Hour Chart Analysis

Dash continues to trade around the $200 level, and yesterday’s correction increased volatility in the coin, with wild moves in both direction today as well. The currency remains the strongest major coin regarding technicals, with $220 primary resistance still being in focus here, and our long-term target still found just above $250.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple is still well inside the declining trend that dominated the coin for more than two months, as it is trading today near the key $0.1750 level, after bouncing lower off $0.20. The coin showed strength during the weekend, and a recovery above $0.20 could point to a trend change, but for now, we still advise short-term traders to be careful with new positions.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

ETC is trading in a range above the primary support level near $14, after a period of relative weakness compared to the other majors. Resistance levels are ahead at $16 and $18. The technical position of the coin unchanged, as it is still in the long-term buy-zone with the MACD still being in oversold territory.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero followed the market lower after hitting strong resistance at $46, as we expected, and fell back to the upper boundary of the long-term base pattern at $37. The short-term MACD is back to neutral already, and although we expect more corrective action, the coin might be stay above $37, and get back abvoe the declining trendline that it brok last week.

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Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.