Crypto Update: Another Violent Sell-Off in Crypto-Land

After several days of very quiet trading, the cryptocurrency segment saw a sudden and broad sell-off today during the U.S. session, and a lot of the top coins hit fresh multi-month lows. The plunge was triggered by the major altcoins, with the recently weak Litecoin leading the way lower as we expected, but BTC also followed its peers lower, falling well below the $10,000 level, while ETH and XRP also took out important support levels.

The sell-off took its toll among the smaller coins as well, and for now, all signs point to another downswing in the ongoing downtrend, even though BTC continues to show relative strength in the face of the broad weakness in the segment. The total value of the market fell briefly below the $250,000 billion threshold again, but thanks to BTC’s stability, the lows set in late-2018 are still not in danger, despite the steep losses of the recent months.

While the sudden drop could be followed by a bear-trap pattern, the fact that we haven’t seen signs of accumulation in the segment means that a successful technical breakdown is much more likely, and traders shouldn’t enter new positions here. Downside risks remain high, and our trend model is still on sell signals on both time-frames, and barring a quick and decisive reversal, a volatile and bearish period is likely ahead.

BTC/USD, 4-Hour Chart Analysis

Even though BTC fell by more than 5%, it remains above its July and August swing lows, while also holding up within its broader triangle consolidation pattern and we still cannot rule out the resumption of the larger scale rally. BTC is well above the key support zone near $9200, but below the recent consolidation zone bears are clearly in control, and traders shouldn’t enter new positions.

Our trend model is still on sell signals on both time-frames even, and while BTC is still in the most promising technical positions among the top coins, it’s now far away from even a short-term upgrade. Below the initial zone near $9,200, further support zones are found near $8,400 and $8,200, while resistance zones are now ahead near $10,000, $11,300, and $13,000.

 ETH/USD, 4-Hour Chart Analysis

ETH clearly took out its recent swing low after plunging below the previously dominant short-term trading range, and the coin fell below the $175 price level for the first time since early-May. ETH remains above the more important $160 level, but the fact that the $180-$185 zone fell could have serious consequences for the whole segment, unless we are in for a quick recovery above the key zone.

ETH is still firmly on sell signals on both time-frames in our trend model, especially following today’s move, and the short-term downtrend has once again been confirmed. Initial support is now found near $160 with the next major level at $145, while above the $180-$185 zone, resistance levels are ahead near $200 and $230.

LTC Leads Sell-Off as Ripple Violates $0.26 Support

XRP/USD, 4-Hour Chart Analysis

While Ripple is holding up above its recent panicky low, it fell back below the prior bear market low and the key $0.26 price level today. The coin is still clearly the weakest major from a long-term technical standpoint, and new bear market lows are likely ahead in the coming weeks, with a possibly damaging downswing already being underway.

XRP is still on sell signals on both time-frames in our trend model, and although a recovery above $0.26 is in the cards, and a more sustained consolidation could be ahead after months of relative weakness, traders should still stay away from the coin. Initial support is now found near $0.23, while above $0.26, strong resistance zones are ahead near $0.28, $0.30, and $0.32.

LTC/USD, 4-Hour Chart Analysis

After just hanging on above its recent marginal new low for days, LTC confirmed its relative weakness today, plunging by more than 10% in a matter of minutes. The coin quickly got close to its next major support zone just above $64 due to the broad sell-off, and even though that zone halted the drop, the short-term downtrend is clearly intact, and an even deeper dip is likely in the coming weeks.

Our trend model is firmly on sell signals on both time frames, and today’s confirmation means that sellers are still in control of the coin’s market despite the steep losses of the past couple of months. The coin is still likely to lead the way lower, with support levels found near $64 and $56, and with resistance ahead near $75, in the $85-$90 zone, and near $100.

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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.

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.