Crypto Update: Consolidation Ends With a Bang

The extended period of low volatility and light trading activity ended today in Asian trading in the cryptocurrency segment. In line with the long-term trends, the major coins fell below key short-term support levels in a concerted fashion, as yesterday’s crash in stock markets spread to Asia, leading to liquidations across asset classes. Given the long consolidation, lots of energy built up in the market that could lead to an outsized move in the coming weeks.

The selloff hit all of the top and small-cap coins, with 5-10% losses across the board and with no significant bounce so far. Traders and investors still shouldn’t enter positions here, even as the bear market lows are still holding up in most cases, and especially Bitcoin should be closely monitored in the coming period, since a break below the $5850 support could lead to another fact wave of technical selling.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is now trading below $6275 again, and by plunging below the lower boundary of the broad triangle pattern, the coin triggered a short-term sell signal in our trend model, which is an important change in the technical setup of the whole segment. A move below $6000 would likely lead to a test the key long-term support zone, but for now, BTC is still neutral from a long-term perspective, together with Monero.

As the majority of coins are on sell signals on both time-frames, traders and investors should avoid new positions here. The next major support zone below $5850 found between $5000 and $5100, while resistance is ahead at $6500 and $6750.

Ripple’s Plunges Through Support Zone as ETH Violates $200

XRP/USDT, 4-Hour Chart Analysis

Ripple continued its decline after triggering a short-term sell signal last week, and it fell below the $0.42-$0.46 without showing any sign of stability. While the long-term trend signal is still only neutral, the broader bearish pressures in the segment will likely push the coin lower as well.

An unlikely quick recovery could still lead to a break-out from the triangle consolidation pattern, but odds favor a negative move out of the formation. Above the primary resistance zone, further levels are ahead at $0.51, $0.54, and $0.57, while support zones are found near $0.375 and $0.35.

ETH/USD, 4-Hour Chart Analysis

Ethereum is now back to sell signals on both time-frames, with the coin declining below primary support, as the bearish long-term trend took control of the market again. After violating the $200 level, the coin is now likely to test $180 and possibly the bear market low near $170, but given the deeply negative sentiment towards the coin, as a successful test could lead to a more durable bottom.

Despite that possibility, traders and investors should still stay away from the coin, with the next major support zone found near $160 and with strong resistance ahead $235, near $260, and between $275 and $280.

LTC/USD, 4-Hour Chart Analysis

Litecoin fell below the $56 support after showing relative weakness this week, and the coin quickly dropped to the $51 level, as we expected. LTC is still clearly in a long-term downtrend and with now a re-test of the lows near $47 is likely, barring a quick reversal. Traders and investors should still not enter new positions here, with further support found near $44 and with resistance zones ahead near $59 and $64.

XMR/USDT, 4-Hour Chart Analysis

While Monero is still among the stronger majors form a longer-term perspective, it also triggered a short-term sell signal, and a move below $100 would be a strongly negative sign for bulls, and would likely signal a test of the bear market low near $80.

XMR fell below primary support at $108 after consolidating below the strong $120-$125 resistance zone for an extended period, and sellers are now in control of the market from a short-term perspective, so traders should stay away from the coin.

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.

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.