Crypto Update: Coins Hit Six-Month Lows As Sell-Off Accelerates

The cryptocurrency segment is experiencing a mini-panic event today, as the current downswing entered an accelerating phase. Volatility skyrocketed as the majors approached their prior lows, and the top coins got hit hard for the second day in a row. A lot of key support levels fell easily today, and while the market stabilized, the technical damage is significant, and bulls need a quick recovery rally above the prior lows to keep their hopes alive.

Our trend model continues to be overwhelmingly bearish and the broad downtrends are still intact in the segment. Traders should remain defensive here, as there is currently no sign of a failed breakdown, and the fact that the whole short-covering rally has been erased adds to the worries. With no sign of developing leadership, the downtrend will likely continue, even though the current panicky sentiment could lead to violent counter-trend moves.

BTC/USD, 4-Hour Chart Analysis

BTC easily fell below its prior low, hitting its lowest level since May, spiking down to the $6750 support before the broad oversold bounce.  The coin is not far off its prior low, meaning that a failed breakdown pattern could still form, but for now also sings point lower in BTC’s market. The coin once again confirmed the ongoing downtrend, and it remains relatively weak from a short-term perspective.

The coin is still on sell signals on both time-frames in our trend model, with support zones now found near $7,000, $6,750, and $6500, and with resistance ahead near $7,400, $7,600, $7,800, and $8,200.

ETH/USD, 4-Hour Chart Analysis

ETH also violated its prior panic lows after dropping below the key $160 support and it even spiked below the $145 level as the sell-off accelerated. The coin is now clearly oversold from a short-term perspective, but that alone is not a reason to jump into a position, as downside risks remain high due to the failed counter-trend move.

Our trend remains on sell signals on both time-frames, with support zones now found near $145 and $130, and with resistance zones ahead near $160, between $180 and $185, and near $200.

XRP Finds Support Near $0.23 as LTC Gets Slaughtered

XRP/USD, 4-Hour Chart Analysis

XRP spiked below its prior low and the $0.23 level, but it recovered above that amid the broad bounce, and it remains relatively stable compared to the other top coins from a short-term perspective. Looking at its long-term setup, the coin is still very weak, and even in light of its current stability, its bear market could resume as soon as in the coming days.

XRP is still on sell signals on both time-frames in our trend model, with support zones now 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 hit an intraday low below the key $44 level after quickly covering the distance between the $51 and the $44 support zones. The coin is trading below its low from October, and while a quick reversal could save the coin from a confirmed new downswing, the outlook remains clearly bearish. With its long-term weakness in mind, the coin could soon drop below $44 and it might retest last year’s lows in the coming months.

LTC remains on sell signals on both time-frames in our trend model, with support zones now found near $44 and $38, and with resistance zones ahead near $51, $56, and $64.

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.