Crypto Update: Coins Suffer Pullback as Ripple Leads the Way Lower

The major cryptocurrencies are all significantly lower in U.S. trading with several negative catalysts triggering a Ripple-led sell-off in the segment. The continued regulatory concerns regarding Facebook’s Libra are weighing sentiment, but technical factors are likely behind the bulk of today’s losses. While Bitcoin remains much stronger than most of its peers, but the significant divergences that we have been observing in recent days already eased.

Some of the relatively weaker coins already violated their recent swing lows, such as XRP, LTC, EOS, IOTA, and Dash, but even the stronger coins are suffering, with only BTC holding on to its short-term buy signal in our trend model in the early stages of the sell-off. Now, even the most valuable coin triggered a sell signal, and traders and investors should remain defensive, as downside risks remain prominent, and a broader topping formation is likely developing.

That said, with both BTC and ETH trading well above their respective swing lows, a major technical breakdown is not yet confirmed, so bulls can still hope for a recovery, but until we see signs of broad technical strength among the majors, a new downtrend remains the most likely scenario.

BTC/USD, 4-Hour Chart Analysis

Bitcoin tested the key $13,000 level several times in the past 24 hours, and although it reached as high as $13,200, it failed to sustainably stay above $13,000. The coin fell together with the broader market in U.S. trading, and even though it remains well clear of the $11,300 support, downside risks are mounting due to the segment-wide pressures, and the long-term technical setup.

Odds continue to favor the continuation of the late June sell-off, similarly to today’s dip n the relatively weaker coins, and in the case of a move below $11,300 support resistance level. Below that, further strong zones are found near $10,000, $9400, and $9200, and $8400, with resistance above $13,000 ahead near the prior swing high just below $14,000.

ETH/USD, 4-Hour Chart Analysis

Ethereum turned lower off the previously dominant rising trendline and violated the $300 support as well. Despite the strong momentum of the move, the coin is still in safe distance from the $275 level, but with the breadth of today’s sell-off in mind, a move below the key support zone is likely in the coming days.

Our trend model is now on sell signals on both time-frames, and although a recovery is still possible, traders should stay away from entering new positions even in light of the recent breakout attempt. A move below $275 could unleash a strong wave of selling, so downside risks remain high. Further support levels are found near $260, $230, and 4200, while above the initial resistance zone near $300, further zones are ahead near $330 and $360.

Ripple Violates Key Support Levels as LTC Nears $100

LTC/USD, 4-Hour Chart Analysis

Litecoin hit a one-month low due to today’s plunge, and after failing several times near $125 the coin confirmed a fresh downtrend. Barring a quick recovery, the $100 level could fall soon, and that would likely lead to a major sell-off in the coin’s market. With that in mind, traders shouldn’t enter new positions here, especially below the $110-$112 zone.

LTC remains on sell signals on both time-frames, and due to its current relative weakness, traders should wait for a broad recovery before considering reentering its market. Further support zones are still found near $100, between $85 and $90, and near $75, while above $125 key long-term resistance zones are ahead near $140 and $150.

XRP/USD, 4-Hour Chart Analysis

Ripple once again proved that it’s the weakest among the top coins, as it not just fell below the $0.7750 level and its previous swing low, but it also dipped below $0.3550, hitting its lowest level since mid-June. The coin is still on clear sell signals on both time-frames in our trend model, and even though the $0.30 level is in a safe distance, for now, we still expect the bear market to resume soon, especially should BTC and ETH start a new downtrend as well.

While a broad recovery could still revive the counter-trend move, odds favor a move towards the prior bear market low in the coming weeks, and traders should still focus on the relatively stronger coins even in the case of another swing higher. Below $0.3550 further support zones are found just above $0.33 and near $0.32, while resistance levels are now ahead near $0.40, 0.42, $0.46, and $0.51.

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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.