Analysis: The Last Hurray in Bitcoin Before the Hangover?

The cryptocurrency market might have experienced a classic blow-off top today, with the help of the historic rally in Bitcoin that carried it past the $10,000 (and the $11,000) level before turning sharply lower during the second half of the session.

We warned of a nearby top in recent days, and altcoins also showed signs of overheating with almost all of the majors reaching overbought territory on all time-frames. BTC has no major support levels until $8200, and a quick move to that zone would be normal after the monster rally. Further support levels are still found at $7700, $7000, and $6700, and a move towards the previous major break-out level at $5000 is still not out of the question.

BTC/USD, 4-Hour Chart Analysis

Ethereum Classic has been one of the leaders of the surge, until getting severely overbought on all time-frames yesterday. The coin already plunged back to the first major support zone at the prior high near $23, and we expect further corrective price action, given the stretched long-term picture, with major support levels at $18, $16, and $14.50.

ETC/USD, 4-Hour Chart Analysis

All of the majors got caught in the wave of selling, and the state of the market is changing very quickly, but we advise traders to wait with entering new positions even during the likely bounces in the coming days, as the overbought readings should be cleared before a durable rally. Let’s see the crucial short-term charts in detail.

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum almost reached $500 amid the early rally, but it fell significantly together with BTC and it’s already looking to test the $400 level after the initial break-down. We expect the coin to outperform Bitcoin in a correction, but the test of the $380 and $350 levels is possible before another move above the $500 mark.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin breached the prior all-time high and the $100 level as we expected before turning sharply lower together with the broader market. Although, the coin didn’t reach the extreme overbought levels of Bitcoin and some of the altcoins, but we still expect it trade in a volatile manner in the coming period. Key support levels at are found at $82.50, $75, and $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash spiked above $750 during the initial rally today, but the coin quickly fell back to the range of the previous days. That said, the short-term uptrend is still intact, and the currency remains one of the strongest majors regarding the long-term picture. We still advise traders and investors to wait for a deeper correction before entering new positions, with support levels at $500, $470, and near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple crawled up to $0.28 in the bullish sentiment but the broad selling pressure pushed the coins sharply lower, despite the more encouraging long-term picture. The coin remains on a long-term buy signal, but volatility is expected to pick up amid the correction in the segment with further support levels found at $0.2250, near $0.20, and at $0.18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero hit our final target for the current leg higher near $200 before falling back to the $160 level that has been in focus in the previous week. The coin remains in a short-term uptrend but the long-term picture is now severely overbought and we expect a deeper correction in the coming weeks, with support further support at $150 and $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO didn’t follow the other majors higher in the past few days, showing considerable relative weakness after the bounce to the $40 level, but the long-term picture remains encouraging. Strong support levels are found at $30 and $27 with primary resistance at $34, and targets at $40 and $50.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA surged past the previous all-time high at $1.1 amid the euphoric sentiment, but the coin remains extremely stretched regarding the long-term momentum, and now the short-term risk/reward ratio is also unfavorable. Investors and traders should now wait for the next deeper correction before entering new positions. Support below $1.1 is found at $1, $0.75, $0.64, and $0.56.

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.

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.