Technical Analysis: Coins Explode Higher but Segment Remains in Downtrend

The sea of red in the cryptocurrency sector quickly turned green today, as all of the major coins surged off the crash lows, gaining from 25% to 100% in less than a day after BTC plunged below the$10,000 level. The rally was fueled by reports from South Korea about the rumored exchange ban that suggests severe technical problems with the execution.

Despite the bullish news, the move was largely technical in nature, and the major coins followed support/resistance levels and trendlines very closely. Now, the short-term picture remains neutral, as the dominant trend is still bearish, but the oversold momentum readings suggest further choppy consolidation.

Bitcoin reached up to $12,000 during the bounce, and the coin is still oversold, so more sideways price action is likely, and even a spike up to $13,000 is possible. That said, we still expect at least a test of the lows and a possibly lengthy bottoming phase before a durable rally. Strong support is found at $11,300, $10,000, $9000, $8200, and $7650.

BTC/USD, 4-Hour Chart Analysis

Altcoins scored lofty gains as well, with Ethereum topping $1000, Ripple reaching above $1.50, while Litecoin climbing back to $200. Ethereum has been among the leaders in the past few weeks, but now it likely entered a broad correction that could end later than Bitcoin’s, and most of the majors move lower so traders and investors should stay away from new positions here. Key support levels are still found at $850, $740 and at $625.

ETH/USD, 4-Hour Chart Analysis

Ripple doubled off the crash lows near $0.85, after the coin got decimated following the recent exponential break-out. While the correction in the coin will likely last longer, we still advise investors to accumulate XRP near the main support levels at $1.25 and $0.85, although a longer consolidation is likely ahead.

XRP/USDT, 4-Hour Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is among the coins in the later phase of their correction, and the coin might be close to hitting a final bottom. That said, LTC could still re-test the $100 level before a durable rally but investors could accumulate the coin on the short-term sell-offs near $125 and $100. Strong resistance is found at $200 and between $250 and $260.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is still relatively weak compared to the other major coins, although it already got back to the key target zone for the correction between $600 and $650. Below that, further support is found at $500, $470, and near $410, while the $825 level is in focus after the bounce. We still expect the correction to continue, but investors could already look for entry points near the main support levels.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is relatively strong from a technical perspective, as it only briefly dropped below the key $23 level, and recovered quickly above $30 during the bounce. Despite the strength, the correction will likely continue, even if the final low might already be in, and traders should be aware of further volatile drops. Investors could add to their holdings on the short-term sell-off near $25 and $23, with primary resistance ahead at $34.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero recovered to the $330 resistance level after the crash and it remains among the stronger coins, as it stayed within the range of the mini-crash n December. As the long-term momentum is still slightly in overbought territory after the stellar rally at the end of last year, the correction will likely continue, and a test of the $200 level is still before a durable rally.  Further support is found at $300, $240, $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO got back to its strong short-term uptrend following the crash and the test of the $100 level, but the coin will likely break the trend in the coming period and enter a longer correction after its recent surge to new all-time highs. Both traders and investors should wait for a better long-term setup before entering new positions. Key support levels below $100 are found at $80, $64, and $56.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is still showing early signs of technical strength, although the key $3 level sopped the bounce for now. As the broad correction in the segment runs its course, the currency might be in for more volatile trading, but investors could already accumulate the coin on the short-term sell-offs. Support zones are found between 2.25$ and $2.35 and at $1.5, with a short-term zone just below $2.

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.