Crypto Update: Bitcoin Violates Support, Plunges Below $7000

Bitcoin has been in the center of attention so far this weekend, as after a period of relative strength the most valuable coin got smacked below key short-term support yesterday. BTC joined the rest of the market, as the move triggered a short-term sell signal in our trend model. Now, the short-term picture is overwhelmingly bearish, although the top 3 coins are still above the structurally important long-term levels that now have been in focus for months.

While short-term, most of the coins are slightly oversold, and altcoins haven’t followed BTC lower today, traders should remain defensive here, even as a stronger bounce is possible in the coming days. With Ethereum and Ripple still testing key levels, and with the relatively weak coins avoiding a breakdown so far, we expect trading activity to be very high in the coming days. Stop loss orders will likely be triggered, while sudden spikes and a general increase in volatility are also likely to occur.

BTC/USD, 4-Hour Chart Analysis

Bitcoin failed to trigger a renewed short-term buy signal following its recent surge and the subsequent correction, and now the coin is close to forming a failed break-out pattern, which would point to another test of the $5850 support.

Traders shouldn’t enter positions here despite the short-term oversold readings, with the weakness of altcoins also being a negative sign.  Primary support is now found at $7000, with further levels at $6750, $6500, and $6275, while resistance is ahead between $7250 and $7350, and at $7650 and $7800.

Altcoins Holding Up but Supports Look Vulnerable

ETH/USD, 4-Hour Chart Analysis

After the strong momentum move lower, the major altcoins got oversold form a short-term perspective and that led to a choppy consolidation phase this weekend. Ethereum has been testing the $400-$420 support zone for days now, and while the lower boundary of that zone is still holding up, the coin couldn’t leave the danger zone despite the rally attempts.

With the short-term trend clearly being negative, and the coin being on a sell signal in our trend model, traders shouldn’t enter positions here. Below $400, support levels are found at $380 and $360, with the latter representing the April low as well, while primary resistance is ahead at $450 and further zones are near $475 and $500.

XRP/USDT, 4-Hour Chart Analysis

Ripple has been stuck in very narrow range this weekend, holding up just above the key support zone near $0.42, and although BTC didn’t drag the coin lower during its selloff, the short-term trend is clearly negative and the support zone remains in danger. A break below that zone could trigger a long-term sell signal, and volatility could explode in the coming days. Primary resistance is ahead near $0.45, while further support is found between $0.30 and $0.32.

LTC/USD, 4-Hour Chart Analysis

Litecoin is trading below the $75 level but it managed to hold the previous cycle low, even as it remains among the weakest coins on all time-fames. LTC is still likely to enter another lower in its downtrend, although a failed breakdown and a strong reversal could kick off a counter-trend move. The next major support zone is found near $64, while strong resistance is ahead near $85 and $90.

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.