Crypto Update: Coins Spike Lower as Another Bounce Fails

For the better part of the day, the top cryptocurrencies continued to trade in limbo, as although the lows hit during Sunday’s plunge held up, none of the majors managed to bounce back significantly. The second half of the day was decisively bearish and near the US close the market sold-off sharply in a concerted fashion.

EOS/USD, 4-Hour Chart Analysis

Bitcoin and Ethereum took out their weekend lows, with ETH clearly leading the way lower. While bulls are holding their ground near the prior swing lows, for now, the coming days will be crucial for avoiding another test of the bear market lows. On a positive note, some of the other leaders of the recent counter-trend move, such as Litecoin and EOS, are relatively strong, but that’s not enough to warrant a bullish approach here.

Ripple also continues to lag the broader market, so the overwhelming majority of the market, in terms of capitalization, is still weak. In light of that and the clearly bearish long-term technicals, traders and investors shouldn’t enter new positions here.

BTC/USD, 4-Hour Chart Analysis

Bitcoin fell below the rising short-term trendline and briefly the Sunday low today, and although the momentum of the sell-off was strong, the most valuable coin hasn’t confirmed the break-down and bulls still have the chance for a quick recovery.

The strong $3850 level is ahead as initial resistance, while the $3600, $3450, and $3250 levels provide support here, and our trend model remains on sell signals on both time-frames. Below the $4000-$4050 zone, sellers remain control of the market, and traders should wait for signs of technical strength before entering even short-term positions.

ETH/USD, 4-Hour Chart Analysis

Ethereum briefly spiked below the key $130 level and the Sunday low, on high volume, after showing relative weakness yesterday. ETH continues to show the way to the whole segment and a sustained move below $130 would be a strong bearish signal.

As the coin is still stuck below the previously dominant rising short-term trendline and the $145 level, our trend model is on a sell signal even on the short-term time frame, even though the counter-trend move might still resume. Key support below $130 is found at $112 and $95-$100 zone, while above $145, strong resistance is still ahead near $160 and $180.

Litecoin Defends $44 Level as Ripple Continues to Struggle

XRP/USDT, 4-Hour Chart Analysis

Although Ripple managed to remain above the $0.30 level during the late-day spike lower, it remains very weak from a broader perspective. In light of the several failed rally attempts in XRP’s market, with the latest occurring just 2 days ago, the coin will likely head lower in the coming weeks, testing the $0.28 and $0.26 levels.

Several strong resistance levels are ahead for Ripple, with the $0.32, the recently developed short-term $0.3330-$0.34 zone, and the long-term $0.3550 and $0.3750 levels all stopping the coin’s rally attempts in recent months.

LTC/USD, 4-Hour Chart Analysis

Litecoin failed to make technical progress today in early trading despite yesterday’s stability, but the coin successfully defended the $44 level amid the late-day sell-off. Should the coin remain above the key level, it could lead a possible recovery in the segment, but given the bearish long-term setup, our trend model remains on sell signals on both time-frames.

While the early signs of relative strength are encouraging, the coin is clearly below the previously dominant rising trendline, and until a new swing low forms, the bearish risks are too high here. Initial resistance is ahead near $48, with another strong zone found near $51, while support below $44 is at $38 and $34.50.

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.