Crypto Update: Coins Dump & Pump As Correction Triggers Stop-Loss Orders

The major cryptocurrencies had a very volatile Wednesday as the correction reached a panicky phase. The top coins all fell below key support levels, triggering a large number of stop-loss orders in the process. The segment experienced a sudden spike lower in the wake of the support breaks, which could have marked the end of the corrective phase, even though the technical damage is quite significant in some cases, putting the long-term trend shift in to question.

While yesterday’s lows could be sustained, our trend model remains bearish on the short-term time-frames, and traders would need evidence of broad technical strength before reentering the market in earnest. The coming days could still see volatile trading and possibly even new lows, but the bullish sentiment has been reset in the segment, and the odds of a sustained rally are rising.

BTC/USD, 4-Hour Chart Analysis

BTC has been leading the way lower in the past 24 hours, and it not just violated the $9,200 support level, but also briefly dipped below $8,600 before bouncing back. The coin remains relatively weak from a technical perspective, and even though the long-term trend shift is still in no danger, the corrective short-term pattern is clearly intact.

BTC is on a short-term sell signal while still being on a long-term buy signal in our trend model, with support zones now found near $8,600, $8,400, and $8,200, and with resistance ahead near $9,200, $10,000, $11,300, and $13,000.

 

ETH/USD, 4-Hour Chart Analysis

ETH dipped below the $230 level yesterday in late trading and it also fell below the broadest rising short-term trendline in the process. The coin continues to be relatively strong from a technical perspective, but below $230, bears remain in control of its market. While a final correction low could already be in, volatility could remain high in the coming days.

Our trend model is still on a short-term sell signal while being on a long-term buy signal, with major support zones found near $200 and between $180 and $185, and with resistance zones ahead near $230, $260, $275, $290, and $300.

XRP Dips Below Long-Term Trendline As LTC Eyes $64

XRP/USD, 4-Hour Chart Analysis

XRP is still very weak form a technical perspective and it remains below its declining long-term trendline as well, despite recovering above the $0.23 support. The coin is trading in a steeply declining corrective short-term trend, and while a segment-wide recovery could propel it higher again, traders should continue to focus their attention on the relatively stronger coins.

Our trend model is on a short-term sell signal while still being on a long-term buy signal with support zones found near $0.23 and $0.21, and with resistance zones ahead near $0.2475, $0.26, $0.28 and $0.30.

LTC/USD, 4-Hour Chart Analysis

LTC spiked below $64 and got very close $56 support level amid the segment-wide selloff, and even though it managed bounce back somewhat, the short-term chart remains wounded. The long-term trend shift is in no danger, but the coin violated its broadest short-term trendline, meaning that traders still shouldn’t enter new positions here.

LTC is on a short-term sell signal while still being on a long-term buy signal in our trend model, with support zones now found near $56, and $51, and with resistance zones ahead near $64, $72.50, $75, $85, and $90.

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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.

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.