Crypto Update: Key Support Levels in Danger as Coins Re-Plunge

The major cryptocurrencies are all significantly lower, as the weekend started off in a decisively bearish fashion in the segment, with Bitcoin’s short-term relative weakness still weighing on the broader market. While yesterday, we saw a weak rally attempt led by Ripple, today altcoins are also under severe selling pressure, and the top coins are threatening with key technical breakdowns and bulls would need a quick recovery to keep the hopes of an upswing intact.

While the trading ranges that developed following last week’s plunge are intact in most cases and the prior swing lows are not in immediate danger, BTC already got close to its respective swing low, and the coin looks ready to move below the key $9200 level, which would be a bearish sign for the whole segment. The $200 level in ETH’s market, the $85 price level in Liteocin’s market, and the $0.30 level in XRP’s market will likely be in focus this weekend, and downside risks remain very high here.

Our trend model is on sell signals on both time frames, and with today’s sell-off, the coin’s are far away from being upgraded in the model, and barring a broad recovery rally, traders shouldn’t risk new positions. A concerted move below the prior swing lows could unleash another wave of selling, and volatility could spike higher in the coming days.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is approaching the key long-term support zone near $9200, and while the relatively weak, from a short-term perspective, coin found support above that zone. That said, technicals remain bearish, and the coin is very likely to continue last week’s sell-off, especially given the failed altcoin rally.

The coin is now well below the $10,000 level that it has been struggling with in recent days, and a renewed buy signal in our trend model now seems unlikely. As a major technical breakdown is likely ahead, traders should avoid entering new positions here, as our trend model is also on sell signals on both time-frames. Key support levels are found near $9,400, $9200, and near $8,400 and $8200, with resistance zones above $10,000 ahead near $11,300 and $13,000.

 ETH/USD, 4-Hour Chart Analysis

Ethereum is still trading within the bearish consolidation pattern that formed this week, but in the wake of today’s plunge, the coin is now in a very dangerous technical situation. ETH is now also well below the key $230 resistance level, and although it’s holding up relatively well compared to BTC, another leg lower in the declining trend is more and more likely.

Our trend model remains on sell signals on both time-frames, and even though the $200 level provides strong initial support, we expect new lows in the coming weeks. Below $200, further strong support zones are found near $180, and $160, while above $230, further zones are ahead near $260 and $275.

Ripple and Litecoin Fail to Show Strength

XRP/USD, 4-Hour Chart Analysis

Despite Ripple’s recent spike higher, which carried the coin above its steepest declining trendline, the coin remains under clear selling pressure. Due to today’s sell-off, the $0.30 level is now in immediate danger again, and the bear market is likely to resume soon. XRP continues to show relative weakness, and traders and investors should still avoid entering its market.

Our trend model remains on clear sell signals on both time-frames, and even in the case of a strong segment-wide rally, traders should focus on the relatively stronger coins. The coin faces strong resistance near$0.32 and just above $0.33, with further resistance ahead near $0.3550 and $0.3750, while support below $0.30 is found near $0.28 and $0.26.

LTC/USD, 4-Hour Chart Analysis

While Litecoin experienced brief periods of relative strength during the current consolidation, it failed to build up momentum. Although the coin is still inside its short-term trading range, it broke below a weak rising trendline today. That fact makes a bearish move likely in the coming days, especially in light of the segment-wide trends.

The coin is hovering just above the lower boundary of the key $85-$90 support zone, and it is still in a safe distance from its prior swing low, despite today’s steep decline. While the he consolidation could continue, our trend model is still on sell signals on both time-frames, and downside risks remain very high. Below the initial support zone, further zones are found near $75 and $64, while above the initial $100 level, resistance zones are still 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.

Author:
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.