Crypto Update: Key Support Levels Fall as Altcoins Crash
The cryptocurrency segment is a sea of red today, with all of the major coins sporting significant losses in the wake of a concerted move below the key support levels that we have been monitoring for weeks. After a lengthy bearish consolidation period, the broad downtrend is likely to resume now, and although a failed breakdown is possible here, we still expect the downswing to continue Traders should now focus on the bearish leaders, such as XRP and ETH to judge the strength of the selling pressure, but for now, downside risks remain elevated despite today’s already sizable plunge.
Bitcoin is also under pressure after triggering a sell signal in our trend model yesterday, and although the most valuable coin is still in a far superior technical position compared to the top altcoins, it’s already threatening with a move below $10,000. The prior swing low could also be in danger very soon, and should the breakdown remain intact in the major altcoins’ markets, the sell-off in BTC might even accelerate in the coming days.
Our trend model remains on sell signals on both time-frames, and in light of the price action in recent weeks, odds favor a sustained move below support. Barring a quick and decisive breakdown, traders shouldn’t consider entering new positions even in the strongest coins here, as bearish pressures remain dominant.
BTC/USD, 4-Hour Chart Analysis
Bitcoin continued lower following yesterday’s downgrade, and while percentage-wise it is holding up well in comparison to its most important peers, short-term technicals are bearish, and a dip below $10,000 now seems very likely. The coming days will be crucial for the relatively strong coin and the segment as a whole, as without a quick recovery, bulls could be in for a lot of trouble.
Our trend model is on sell signals on both time-frames, and while a recovery rally above the short-term trendline, and the $11,300 level could trigger a renewed buy signal, the segment-wide trends make that unlikely. Initial support is found near $10,000, with further zones near $9,200, $8,400, and $8,200, while resistance zones are ahead near $13,000, and at the prior rally high near $14,000.
ETH/USD, 4-Hour Chart Analysis
After violating the $200 support, Ethereum quickly fell all the way to the crucial $180-$185, taking out its prior swing low in the process. Despite the momentum of the plunge, the coin found support in the key zone, and it is trading near its prior low, giving hope to bulls that it will form a failed breakdown pattern. That said, the selling pressure that we observed during the multi-week-long consolidation points to a sustained breakdown, with downside risk being very high here.
Our trend model is still on clear sell signals on both time-frames, and following today’s move traders shouldn’t consider new positions until we see signs of technical strength in ETH’s market. Below $180 further support zones are found near $160, and $145, while above $200, resistance levels are now ahead near $230 and $265.
Ripple Hits 20-Month Low as Litecoin Touches $75 Level
XRP/USD, 4-Hour Chart Analysis
After showing clear signs of relative weakness for months, Ripple led today’s plunge as expected taking out not just the $0.28 level but also the prior bear market low near $0.26 for a brief period. XRP hit its lowest level since late-2017, and while a failed breakdown is in the cards here, we expect the sell-off to continue to sustained new lows.
XRP is still on clear sell signals on both time-frames in our trend model, and traders should stay away from the coin, even in the case of a bounce. Below $0.26, the next zone of support is found near $0.26, while above the initial resistance zone near $0.28 strong zones are also ahead near $0.30, $0.32, and just above $0.33.
LTC/USD, 4-Hour Chart Analysis
Following the recent failed breakout attempts, LTC confirmed the bearish pressures in its market, taking out the lower boundary of the $85-$90 support zone and its prior swing low in the course of a few hours. The coin found support near $75 as expected but the lengthy consolidation period and the momentum of today’s decline hints at a sustained move below support, and traders should remain defensive towards the coin.
Our trend model is also on clear sell signals on both time frames, despite today’s deep sell-off, and below $85 odds clearly favor a bearish continuation and a move below $75. Below $75, further support is still found near $64, with further resistance zones above $90 ahead between $110 and $112 and near $125.
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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.