Crypto Update: Coins Hit New Lows as Dead Cat Bounce Fizzles Out
Heavy selling hit the cryptocurrency segment after the US close following an already slightly bearish session, and the majors are now trading below their recent lows. Ethereum is trading at the lowest level since November, Ripple hit levels not seen since December, while the still relatively strong Bitcoin, is trading near $6000 for the first time since late-June.
The strong negative short-term trend is clearly intact in the segment, with the recent break-downs in some of the largest coins further fueling it. The bearish leaders such as Litecoin, Monero, NEO, and Dash are still very weak, and they are all continuing their structural bear market. Litecoin is now below $60, NEO plunged below $20, while Monero and Dash are testing the $90 and $170 levels respectively.
LTC/USD, 4-Hour Chart Analysis
As we previously noted, given the negative sentiment in the segment and the oversold momentum readings, a durable bottom could be close in time, but there are still no signs of even a short-term reversal so traders shouldn’t enter positions here.
BTC/USD, 4-Hour Chart Analysis
Bitcoin is now getting closer and closer to the key $5850 level after violating the recent swing low, and the relative strength of the coin is quickly fading away. A clear break below that support zone would be another bearish sign for the whole segment, with the long-term picture already being overwhelmingly negative.
A successful test or a failed break-down could still cave the secular bull market, but for now, traders should still stay away from entering new positions even in BTC. Resistance is now ahead at $6275, $6500, $$6750, and $7000 while the next major support zone below $5850 is found between $5000 and $5100.
Still No Signs of Strength Among Altcoins
ETH/USD, 4-Hour Chart Analysis
Ethereum broke below $360 today in late trading after the very weak bounce that followed the crash below $400, and the coin is now already testing the next major level at $335, confirming the recent long-term sell signal. Below the current level the next support zone is near $300, and although the coin is already deeply oversold, a move towards that zone is possible as soon as this weekend.
XRP/USDT, 4-Hour Chart Analysis
Ripple violated the $0.32 level as it followed the rest of the market today, and it is now testing the crucial $0.30-$0.32 zone, as selling pressure remains very strong. XRP could form a durable bottom near the key zone, but for now, the short-term trend is still intact. XRP confirmed the long-term break-down, and despite the likely counter-trend moves, from a technical perspective, Ripple should continue to hit new lows after those. Short-term resistance formed near $0.35, with a strong zone found near $0.42, while further support is found near $0.2750 and $0.26.
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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.