Crypto Update: Coins Hit New Lows But Bearish Momentum Weakens

The cryptocurrency segment continues to be in control of sellers, with the major coins hitting multi-week lows over the weekend. On a positive note, the momentum of the latest sell-off has been weak, and although several top coins violated key support levels, like Bitcoin, Litecoin, and Ethereum, the breakdown didn’t lead to severe losses.

That said, the short-term downtrend remains dominant and given the still bearish long-term picture, traders and investors still shouldn’t enter positions here, but a failed breakdown pattern could mean that the counter-trend rally is still intact. Correlations remain very high in the segment, confirming the bearish environment, and we would need more technical strength to consider new positions in the top coins.

ETH/USD, 4-Hour Chart Analysis

Ethereum plunged below the $120 support as well, continuing the short-term downtrend, and the previously leading coin still struggles to retain its relative strength. While failed break-out pattern remains a possibility here, bearish risks are still high, and test of the bear market lows still seems likely in the coming months.

Bulls should be looking for a quick recovery above the $130 level, but barring that, the coin will remain on sell signals on both time-frames in our trend model. Further support below $120 is found between $95 and $100, while resistance is ahead at $160 and near $180.

BTC/USD, 4-Hour Chart Analysis

Bitcoin broke below the key $3600 level amid the broad dip, but the coin didn’t gather bearish momentum, and it remains within striking distance of the resistance zone. BTC is still on a neutral short-term signal thanks to its relative stability, and a recovery above $3850 would be a positive sign for bulls that could re-trigger a buy short-term buy signal.

For now, traders and investors still shouldn’t enter positions here, considering the hostile long-term setup, with a test of the bear market lows still being likely. Key long-term support is found near the $3000 level, with further another weaker zone near $3250, and with resistance ahead between $4000 and $4050, and $4450.

Altcoins Testing Key Levels

LTC/USD, 4-Hour Chart Analysis

Litecoin violated the $30-$30.50 support zone, but it remains close to the lower end of that range and the momentum of the move hasn’t been disastrous. That said, the coin is still on clear sell signals on both time-frames, but further signs of strength could mean that the broader counter-trend move will resume. The $30-$30.50 zone remains in the center of attention, with strong resistance ahead near $34.50, $38, and $44 and with further support found near $26 and $23.

XRP/USDT, 4-Hour Chart Analysis

Despite its recent technical weakness and the fact that it fell below the $0.32 support level, Ripple held up well since yesterday’s plunge, and that is a positive sign for the whole segment, even though the coin is in downtrends on all time-frames. The $0.30 support and the $0.3550 resistance levels could be in play in the coming week, but for now, traders and investors should still stay away from XRP, with further resistance ahead near $0.3750 and in the key long-term zone between $0.42 and $0.46.

IOT/USD, 4-Hour Chart Analysis

IOTA, which has been one of the leaders of the counter-trend move also failed to hold up above the $0.3150 and $0.30 levels, and until we see signs of technical strength, the coin remains on sell signals on all time-frames in our trend model. A move to the support zone near $0.24 could be ahead, while a quick recovery above $0.3150 could lead to the formation of a bear-trap pattern. Further resistance is ahead near $0.35, while key support is found near $0.20.

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.