Crypto Update: Coins Drop Sharply as Ethereum Flash-Crashes, Ripple Tests $0.30
The cryptocurrency segment had a bloody Sunday, with all of the majors shedding more than 5%, and with several coins falling by double digits again. Altcoins remain very weak, and although Bitcoin is still holding up well, the market continues to be bearish. Ethereum suffered a flash crash on the Bitstamp exchange, spiking briefly below $200, which also added to the fragility of the market. While ETH is now trading above the key $230 level, the coming days will be vital for bulls, as the sell-off could even accelerate, should further key levels fall.
The other top coins have also been today, with LTC dropping below $100 and with Ripple revisiting the key long-term $0.30 level. The decline also carried smaller coins lower, and besides BTC, only Monero is showing signs of short-term relative strength, stating above its recent swing low as well. The outlook for the segment remains bearish even regarding the coming days, and although oversold bounces can occur anytime, our trend model remains on sell signals on both time-frames for all of the top coins.
Given the broad technical weakness and the newly formed short-term downtrends, bulls need a quick and sharp recovery to avoid further, possibly severe damage in the coming weeks. Bitcoin’s stability is still the most promising trend, and the most valuable coin has to maintain that to keep bullish hopes alive.
BTC/USD, 4-Hour Chart Analysis
Bitcoin left the vicinity of the $11.300 support level due to today’s plunge and now, the swing low formed earlier this month is in danger. The coin looks ready to test $10,000, and below that, BTC could quickly move towards the support zone near the $9200 price level, as the prior swing low is unlikely to provide meaningful support.
The coin now broke all of the rising short-term trendlines, and it’s threatening to join the major altcoins in the newly formed downtrend. While the technical setups is still relatively stable in BTC’s market, bulls would need more coins to show strength to avoid further technical damage. Below $9200 the next major support zone is found near $8400, with resistance above $11,300 ahead near $13,000
XRP/USD, 4-Hour Chart Analysis
While percentage-wise, Ripple is among the relatively stronger coins, technically speaking the coin is still in horrible shape, and it already gave back practically all of its gains since May. XRP turned higher off the key $0.30 level today but it remains below all of the support levels that it violated in recent days. We continue to expect the coin to resume its bear market soon, and even in the case of a larger-scale bounce, traders should avoid entering even short-term positions in the coin, due to the downside risks.
Our trend model remains on sell signals on both time-frames, and a move below $0.30 would likely trigger a test of the $0.28 and $0.26 supports. In case of an unlikely recovery rally, initial resistance is now ahead near $0.3200, with further zones near $0.33, $0.3550, and $0.3750.
Ethereum Tries to Hold $230 After Flash Crash as LTC Slips Below $90
ETH/USD, 4-Hour Chart Analysis
Ethereum got hit hard even excluding the flash crash on Bitstamp, and the coin remains worryingly weak from a technical perspective. After violating $260, the coin quickly fell to $230 as we expected, and in light of the strong momentum of the decline, ETH could soon be threatening the $200 level. The coin is still in a clear short-term downtrend, and it remains on sell signals on sell signals on both time-frames in our trend model.
Should the $2000 level fall as well, the key long-term zone near $180 might be reached, although the coin is getting stretched on the downside according to the short-term momentum indicators. Below $180 further support levels are found near $160 and $45, while resistances zones are ahead near $260, $275, and $300.
LTC/USD, 4-Hour Chart Analysis
Litecoin followed the broader market sharply lower, and it is now testing the key $85-$90 support zone after plunging below $100 to levels not seen since late-May. The previously leading coin is under a lot of technical pressure, and the steep short-term trend has the potential to inflict serious damage in the coming weeks.
Our trend model is still on clear sell signals on both time-frames, and while Bitcoin’s strength is keeping the hope alive for a recovery, and Litecoin is still holding on to most of its gains since last year’s bottom, downside risks are very high here. Below the initial support zone, further zones are found near $75 and $64, while resistance above $100 is ahead between $110 and $112, and near $125 and $140.
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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.