Crypto Update: Coins Remain Under Pressure as Bitcoin Suffers Blow

After a quiet and slightly bearish session on Monday, today, the cryptocurrency segment was more active and the selling pressure intensified, dragging all of the majors lower. The easing trade tensions caused a sell-off in global risk assets following the recent heavy inflows into gold, U.S. Treasuries, the Yen, and BTC, and the recently weaker cryptocurrency took out a key support zone due to the dip.

The breakdown from the short-term pattern triggered a downgrade in our trend model, and now all of the majors are back to sell signals on both time-frames, as the top altcoins still haven’t shown any sign of technical strength. That said, a clear move to new lows has been avoided, so far, and although the outlook got even more bearish today, we still can’t rule out a broader rally attempt even though downside risks are very high.

Until we see significant technical improvements in the segment, our defensive stance won’t change, and even in the case of yet another rally attempt, traders should only consider short-term positions in the strongest coins. Strict risk management rules should also be applied, as in the case of a concerted support break, the likely downswing could turn violent.

BTC/USD, 4-Hour Chart Analysis

Bitcoin got hit hard today following days of low-volatility consolidation, and the coin violated the key $11,300 level before founding support near the rising short-term trendline. With the segment-wide trends in mind, traders shouldn’t hold on to their positions here, as BTC could be caught in a volatile downswing, despite its recent relative strength compared to the other major coins. Although today’s dip is worrying for bulls, BTC is still in the best technical position in the segment.

That said, our trend model is now back on sell signals on both time-frames and barring a quick recovery, a bearish continuation is likely. Initial support is now found near $10,000, with further zones found near $9,200, $8,400, and $8,200, while resistance zones are ahead near $11,300, $13,000, and at the prior rally high near $14,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum got close to testing the $200 support today, yet again, and while the coin managed to stay above the key support zone and its prior swing low, it continues to show clear signs of selling pressure. The coin is stuck in a short-term downtrend, and following the lengthy consolidation period, a move below support could now be ahead as soon as in the coming days.

Our trend model is still on clear sell signals on both time-frames, and as the $230 level still seems too strong to tackle, at least in the short-term, an upgrade is unlikely in the coming weeks. Below $200 further support zones are found near $180, and $160, while above $230, resistance levels are ahead near $260 and $275, and traders should avoid entering new positions below the $230 level.

Ripple Dips Below $0.30 Again as Litecoin Holds $85

XRP/USD, 4-Hour Chart Analysis

While some of the major altcoins have been showing relative stability today, XRP remains very week on all time-frames, and now it’s close to violating its prior swing low again. Given the lack of bullish developments, we remain bearish on XRP, and the test of the $0.28 level seems very likely, with a move to new bear market lows being the most likely outcome.

With that in mind, XRP is still on clear sell signals on both time-frames in our trend model, and downside risks remain very high. Below $0.28, strong support is found near $$0.26, while resistance is ahead near $0.32, just above $0.33, and near $0.3550 and $0.3750, and even in the case of another rally attempt in the segment, traders and investors should stay away from XRP.

LTC/USD, 4-Hour Chart Analysis

LTC managed to hold up above the key $85 support level today, in the face of the sell-off in the segment, but despite the fact that the short-term trading range is intact, the outlook for the coin remains negative. The $85-$90 zone is still at the center of attention, but in the case of a breakdown, it’s unlikely that the coin will find support above the prior swing low just above the key $75 support level, and a major sell-off would also be in the cards.

Our trend model is still on clear sell signals on both time frames, and especially in light of the recent failed rally attempts downside risks remain prominent even on the short-term time-frame. Below $55, further support is still found near $64, with resistance zones ahead between $110 and $112 and near $125.

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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.

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.