Crypto Update: Ethereum Crashes to 12-Month Low as Selloff Continues

The steep segment-wide decline that started yesterday continued today, with all of the major cryptocurrencies falling overnight, most of them by double-digits. Ethereum continues to lead the way lower, and the second largest coin hit the lowest level since last September after the expected breakdown.

Bitcoin’s, still relatively strong technical position also deteriorated and now the short-term picture in the segment is overwhelmingly bearish, similarly to the long-term setup, which hasn’t changed despite the recent rally. The leaders of the counter-trend move are also sporting heavy losses, although Dash, Monero, IOTA, and even the weaker Litecoin and Ripple are all above the August lows.

A successful test of the lows by the stronger coins would be a positive long-term sign, while all eyes will be on the key $5850 level in Bitcoin if the selloff continues. For now, traders should still remain defensive, since the dominant bearish long-term is in play again, and another leg lower in the top coins is the most likely scenario for the coming weeks.

BTC/USD, 4-Hour Chart Analysis

Bitcoin clearly broke below the short-term trendline during the second wave of selling, and it also broke violated the key $6750 level in the process, triggering a short-term sell signal in our trend model. The coin remains relatively strong from a short-term perspective, but the failed rally attempts of the recent months are not positive for bulls, and another test of the key zone near $5850 would be a negative sign. BTC bounced of the key $6275 support in early trading, and another weaker zone is found near $6000 while primary resistance is now ahead at $6500.

ETH/USD, 4-Hour Chart Analysis

Ethereum confirmed its severe relative weakness again, breaking below the August low near the $260 level as expected, and it also fell below the next support level at $235 overnight. The coins decline has been a major drag on the whole segment, and the total value of the market got back to $200 billion today in early trading, even as most of the smaller altcoins are above their respective lows. The next major support level is found near $205, with another, stronger zone at $180, and as the steep downtrend is clearly intact, traders should still away from the coin.

No Safe-Haven Among Altcoins

XRP/USDT, 4-Hour Chart Analysis

Ripple continued yesterday’s breakdown overnight, plunging below $0.30, but it remained above the $0.26 low, slightly outperforming the bearish leader ETH. XRP is also in a structural bear market, with our trend model on a sell signal both the short- and long-term, and a test of the lows is very likely in the coming days. The next main support zone is near $0.23, while further resistance is ahead between $0.3130 and $0.32 and near $0.35.

LTC/USD, 4-Hour Chart Analysis

Litecoin erased most of its recent gains after breaking below the short-term uptrend line yesterday, and the coin is now likely headed for the test of the August lows. LTC is back below the key $56 support/résistance level as well, and as the long-term setup remained clearly bearish despite the rally, another leg lower is possible in the coming period. Below the $51levle and the August low, the $44 level provides the next main level of support, while key resistance is ahead at $64.

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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.