Crypto Update: Coins Drop Again As Risk Assets Turn Lower

While we saw an encouraging bounce in the crypto segment and across financial markets yesterday, as global governments and central banks went all-in on emergency stimulus packages to tackle the COVID-19 crisis, the rally was short-lived. The major coins are relatively stable compared to the other key asset classes, holding up well above last week’s crash lows, but today, they gave back some of yesterday’s rally too, and the coming day could bring further volatile swings and even new lows.

Our trend model remains on sell signals on both time-frames due to the steep short-term downtrends and the recent long-term trendline breaks, but given the extent of last week’s crash, we might already be in the middle of a bottoming process. That said, traders still shouldn’t enter new positions here, as market conditions continue to be extreme globally, and short-term downside risks remain high.

BTC/USD, 4-Hour Chart Analysis

BTC continues to show encouraging stability, from a technical standpoint, holding up above the $5,050 level despite the selling pressure. The coin is also holding up well above its crash low as well, and as it decoupled somewhat from the moves in global risk assets, the liquidations in its market are likely over, for now. That said downside risks remain high from a short-term perspective, and traders should stay defensive.

BTC is on sell signals on both time-frames in our trend model, with support now found near $5,050, $4,400, and $3,850, and with resistance zones ahead near $5350, $5850, between $6,000 and $6,100, and near $6,500 and $6,750.

ETH/USD, 4-Hour Chart Analysis

ETH turned lower of the $120 level again, showing relative weakness compared to its closest peers, but in light of the trends in global risk assets, today’s performance is not disastrous. The coin is still trading within a steeply declining downtrend, but the $95-$100 zone and its crash remains safe, and a sustained low might already be in, even considering its relative weakness.

ETH is on sell signals on both time-frames in our trend model, with major support zones found near between $95 and $100 and between $73 and $75, and with resistance zones ahead near $120, between $130 and $135 and near $145 and $160.

XRP And LTC Back under Key Levels

XRP/USD, 4-Hour Chart Analysis

XRP continues to trade in the close vicinity of the key $0.15 support/resistance level, despite today’s dip, and while it failed to build up bullish momentum after showing relative strength during the crash, it continues to perform in line with the broader market. With that, bulls can still hope that we already saw the bottom of the coin’s bear market, but traders should still not enter new positions here.

Our trend model is still on sell signals on both time-frames, with support zones found near $0.13 and $0.11, and with resistance zones ahead near $0.15, $0.1650, $0.1750, $0.19, and $0.20.

LTC/USD, 4-Hour Chart Analysis

LTC is trading below the key $34.50 support/resistance level due to today’s early dip, but it remains above Monday’s lows, despite failing at the short-term trendline yesterday. The coin is still not far from its previously dominant long-term trendline, but despite that, downside risks remain high, and volatility might spike higher again, so short-term trading is still very risky.

LTC is still on sell signals on both time-frames in our trend model, with support zones found near $30, and $26.50, and with resistance zones ahead near $34.50, $38, $44, and $51.

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.