Crypto Update: Correction Continues but Uptrend Not in Danger
The major cryptocurrencies are consolidating in a choppy range today following yesterday’s sharp pullback, with the total value of the market stabilizing near the $400 billion level. All of the largest coins found support above key support levels, keeping the bullish trend intact, as the overbought readings are being cleared.
While the correction will likely continue and our trend model is still only neutral from a short-term perspective in the case of most of the coins, the underlying trend is positive, and we expect the recovery to resume after the dip.
BTC/USD, 4-Hour Chart Analysis
Bitcoin fell below the $9000-$9200 support/resistance zone during the pullback, but it remained above the $8400 level that marks the previous swing high. The MACD indicator is still showing a downswing, but it is now in neutral territory, and the coin could already be ready to resume the uptrend and aggressive traders could enter new positions, using the overnight low as a stop loss level. Below $8400, further support is found near the $7650 level, while targets are ahead at $10,000 and $10,500.
ETH/USD, 4-Hour Chart Analysis
Ethereum found support just below the $600 level and moved back to the vicinity of the $625 support level holding within the steep short-term uptrend. A break below the trendline is still likely, and a test of the $555 to $575 zone is possible after the strong rally. That said, ETH, one of the leaders of the upswing is expected to resume the recovery after the correction, and long-term investors should hold on to their coins despite the move. Further support is at $500, with targets still ahead near $735, $780, and $845.
EOS Holding Up Well Amid Broad Correction
EOS/USD, 4-Hour Chart Analysis
EOS has been spearheading the broad rally in the segment, and the coin got close to the prior all-time high before the current correction, being the largest coin to do so since January. Although the currency retreated somewhat from the highs, it remains from a short-term perspective and traders should use tight stop losses or reduce their positions as correction risk is high here.
IOTA is the closest to giving a short-term buy signal among the majors, as it began the correction earlier and found strong support near the previous swing high, while there are no negative outliers that would hint on a failed rally off the recent multi-month lows. With that in mind, long-term investors could still use the current correction to boost their altcoin holdings.
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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.