Crypto Update: Another Steep Selloff Drags Majors to New Lows

The cryptocurrency segment got hit had yet again this weekend, as the mid-week bounce faded and the recent panic lows failed to hold up the top coins. The negative long-term market forces took hold of the segment again, and despite the deeply oversold momentum readings, the majors plunged to new lows. Bitcoin briefly violated the next major support zone near $3600, while Ethereum spiked below $100, and Ripple took out both the $0.375 and $0.355 support levels amid the rout.

While the breakdown is less violent than the recent bearish moves, in most cases, it triggered a downgrade in our trend model with regards to the short-term time-frame. The top coins are still trading below their lows from last week, despite an initial bounce of today’s minimum levels, but a quick recovery above the breakdown levels would be a bullish short-term.

The long-term setup remains overwhelmingly bearish in the segment, and long positions should still be only considered as ultra-short-term trades, even as a larger bounce is still likely in the coming period, especially as the bearish momentum continues to weaken.

BTC/USD, 4-Hour Chart Analysis

Bitcoin fell below the $3600 support today in early trading before the rebound and it continues to trade below the $4000-$4050 zone that stopped the selloff earlier this week. The most valuable coin failed to show meaningful strength ever since the break below the key long-term $5850 support, and the steep short-term downtrend remains intact, with the broad declining trend also being dominant.

A quick rally back above $4050, could set up a failed break-down pattern, but for now, traders and investors should still stay away from the coin, and long positions should only be considered as ultra-short-term trades. Further resistance levels ahead near $4450, and between $5000 and $5100, while a crucial long-term support zone is found near $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum confirmed its relative weakness that we observed in recent days, and it plunged below the $100 level before a strong bounce. Despite the rebound, ETH is stuck below the $118 level that served as support this week, and selling pressure is still apparent in the market of the third largest coin. Traders and investors should still not enter positions here, with primary support still found in the $95-$100 zone, and with further resistance ahead near $130.

Ripple Violates Multiple Support Levels As Panic Spreads

XRP/USDT, 4-Hour Chart Analysis

The recently strong Ripple failed to show bullish momentum during the midweek bounce, and this weekend it confirmed its short-term weakness and the sell signal in our trend model, plunging below the $0.375 and $0.355 levels. That said, form a long-term standpoint, the scion is still the strongest major, and it remains well above its prior bear market low.

Traders and investors still shouldn’t enter positions here, despite the now deeply oversold short-term momentum readings, with support levels now found at $0.32, and $0.30, and with further resistance ahead between $0.42 and $0.46.

Litecoin/USD, 4-Hour Chart Analysis

While the momentum of the selloff in Litecoin, one of the bearish leaders, is weakening, the declining short- and long-term trends are clearly intact, and today, the coin hit a new low near $26, while staying below the previous low near $30 during the bounce.

XMR/USDT, 4-Hour Chart Analysis

While we continue to expect a larger bounce in the segment in the coming weeks, long positions should still only be considered as ultra-short-term trades in Litecoin and the other relatively weak altcoins such as Monero, Dash, NEO, and IOTA as well. There is still no sign of a developing bullish leadership in the segment, adn sellers clearly remain in control of the market.

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.