Crypto Update: Coins Avoid Breakdown but Bulls Still Not Out of the Woods

Despite yesterday’s steep drop, and Litecoin’s marginal new low, the major cryptocurrencies managed to hold up above their recent lows. While a major technical breakdown has been avoided, for now, the top coins only managed a small bounce overnight, and the prior lows are still in danger. With the short-term downtrends clearly being intact, odds continue to favor another downswing, with potentially large losses in the case of the relatively weaker coins.

Ripple and Litecoin are still the weakest among the top coins from a technical perspective, and although XRP didn’t get close to its prior low, it remains the prime candidate to lead the way lower in the coming weeks due to its precarious long-term setup. The coming days will be crucial for ETH and BTC as well, and even though BTC is still by far the strongest major, it has been struggling to stay above the $10,000 level in the past 24 hours.

Should the most valuable coin fall below its prior low, the whole segment could be under even more pressure. Our trend model remains on sell signals on both time-frames, and traders should stay away even from the relatively stronger coins until we see clear signs of technical strength.

BTC/USD, 4-Hour Chart Analysis

BTC failed to build up relative strength again after turning sharply lower yesterday, and it looks to be headed for a test of the prior swing low and the $9,200 support in the coming days. From a broader perspective, BTC is still in the best technical shape, and there is still a chance that it could resume the larger-scale rally, even though the segment-wide trends are clearly negative.

Our trend model is still on sell signals on both time-frames, and barring a move above $11,300, the outlook for the coin will remain bearish.  Below $9,200, further support zones are found near $8,400 and $8,200, while resistance zones are ahead near $10,000, $11,300, and $13,000.

 ETH/USD, 4-Hour Chart Analysis

Although the weak overnight bounce failed in ETH’s market, the coin remains above the key $180-$185 support zone, and while a major technical breakdown is still likely, it could still recover above its prior swing low. Ethereum continues to be relatively weak from a broader perspective, and below the $200 level sellers remain clearly in control of its market, especially as the short-term downtrend line is still intact.

ETH is still on clear sell signals on both time-frames in our trend model, and despite today’s stability, a volatile sell-off could still be ahead in the coming days, given the broad weakness in the segment. Below the initial zone between $180 and $185, further support is found near $160, and $145, while above $200, resistance levels are still ahead near $230 and $265.

Ripple Holds Above $0.26 as Litecoin Avoids Major Hit  Hits New Low as Ripple Tests $0.26

XRP/USD, 4-Hour Chart Analysis

Despite days of relative weakness this week, Ripple remains above its prior bear market low and the $0.26 support level, trying to establish a higher swing low, as the recent panic low is in no danger. That said, the coin is in a clear short-term downtrend, and even in the case of a larger-scale rally attempt, it would remain negative from a broader perspective.

The coin is still on sell signals on both time-frames in our trend model, and we still expect the bear market to continue, even in the wake of today’s stability. Below the $0.26 level, further support is found near $0.23, while above the initial $0.28 resistance, strong zones are ahead near $0.30, $0.32, and just above $0.33.

LTC/USD, 4-Hour Chart Analysis

LTC only hit a marginal new low yesterday, and the relatively weak coin avoided a major sell-off thanks to the rather weak overnight bounce. LTC is still dangerously close to its recent low, while being stuck below the key $75 level, so traders should continue to avoid the coin, especially as the short-term downtrend is firmly intact due the coins recent weakness.

Our trend model is on sell signals on both time frames, and a rally above $80 would at least be needed for an upgrade, with the dominant declining trendline also being around that price level currently.  Initial support is found near $64, with another level near $56 while resistance zones above $75 are ahead in the $85-$90 zone, near $100, and between $110 and $112.

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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.