Crypto Update: Ethereum Nears $300, Ripple Plunges Below $0.30 as Selloff Deepens
The bloodbath in the cryptocurrency segment continued today in early trading, with the major altcoins getting smacked lower yet again. Bitcoin is still providing bulls something to cheer about as the coin not just avoided a test of the $5850 level, but it also stayed above $6000 amid the broad selloff. The total value of the market is just above $200 billion, thanks to the relative stability of the most valuable coin, but the technical setup in the segment remains overwhelmingly bearish.
Altcoin broke below key support levels yet again, and remained below those too, confirming this week’s break-down, and keeping the strong short-term downtrend intact. Ethereum and Ripple are particularly weak, and they weigh heavily on the whole market with ETH plunging by 25% since triggering a long-term sell signal, and with Ripple dipping below the key long-term support zone between $0.30 and $0.32.
Given the deeply oversold short-term momentum readings, traders shoring altcoins should exit their positions here, as the odds of a violent counter-trend are high now. That said, we still not recommend entering new bullish positions in the coins, as there are no signs of a bottom or bullish momentum among the top coins.
ETH/USD, 4-Hour Chart Analysis
Ethereum continues to show profound weakness, and it didn’t even pause near the $335 support level on the way to $300 following yesterday late-day break-down. The second largest coin looks set to test the key level in ht coming days, and that could unleash another wave of stop-loss orders, leading to a volatile spike lower.
Bulls should be looking for a quick recovery above support, as a sign of the exhaustion of the current trend, but for now, the bearish setup is intact. The next major support zone is between $275 and $280, while further resistance is ahead near $360.
BTC/USD, 4-Hour Chart Analysis
Bitcoin managed to retain its relative strength despite yesterday’s ugly selloff, but the coin is still trading below the $6275 support/resistance level, and alone BTC won’t be enough to stop the rout. A test of the $5850 level still seems likely, and the short-term sell signal still stands in our trend model, but the current strength of the coin is encouraging, and the structural break-down might still be avoided. Resistance is still ahead at $6275, $6500, $$6750, and $7000 while the next major support zone below $5850 is found between $5000 and $5100.
Bearish Leaders Still Under Pressure
DASH/USD, 4-Hour Chart Analysis
We continue to keep a close eye on the relatively weak coins from a long-term perspective, such as Litecoin, Monero, NEO, and Dash, as they correctly predicted the recent segment-wide moves. All of the above coins are still under apparent selling pressure, and they failed to retain major resistance levels during the recent weak bounces. Dash is now below the recent low at $170, and now a test of the key long-term support near $150 is likely before a major reversal, so traders should stay away from opening new positions.
XRP/USDT, 4-Hour Chart Analysis
Ripple couldn’t hold up above the $0.30 level, despite the deeply oversold momentum reading and the strong support in the $0.30-$0.32 zone, and until a recovery above support, the short-term trend remains intact. Traders should still stay away from the coin even as a violent counter-trend move is likely in the coming days.
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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.