Crypto Update: Coins Rebound as Bitcoin Breaks $8400

The major coins took another beating overnight, as a wave of selling pushed Bitcoin below the key $8400 support. The break of support triggered stop-loss orders which caused a spike lower, but as selling dried up, the segment quickly recovered.

While the rebound is promising, the short-term correction is still intact, and the coins remain on a neutral short-term trend signal. That said, aggressive traders could enter positions here, with stop losses below the overnight lows, as we expect the recovery continues following the correction.

BTC/USD, 4-Hour Chart Analysis

Bitcoin hit a bottom near $8200 before bouncing back into the $8400-$8700 zone, as the short-term momentum indicators reached oversold territory thanks to the selloff. While the news-driven decline could still continue, a quick recovery above $8700 would be a bullish sign for the still relatively weak coin’s market. Above $8700 resistance is in the long-term support/resistance zone between $9000 and $9200, with further targets at $10,000, $10,500, and $11,300.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to outperform Bitcoin from a technical perspective, and the coin found support in the range between $625 and $645. ETH is also oversold short-term, while still being overbought on the daily time-frame. With that in mind, traders should be cautious with short-term positions, while investors shouldn’t add to their holdings yet. Primary resistance is ahead between $735 and $780, with a short-term level at $700, while further support is in the $555-$575 zone.

Altcoins Also Higher as Correlations Still Elevated

IOT/USD, 4-Hour Chart Analysis

The correction dragged all of the majors lower, with small-cap coins following the largest digital currencies as well. Correlations remained high during today’s bounce, as the generally bearish conditions rare still dominant short-term.

The leaders of rally are also still in correction mode, with EOS and IOTA both testing important support levels today. IOTA spiked as low as the $1.7 level before the rebound, as the overbough long-term momentum readings led to a deeper correction.

Despite the correction, we remain bullish on the coin, and the segment, and we expect the rally to resume in the coming weeks.

We will cover the long-term technical outlook for the segment later on rhis weekend.

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.