Crypto Update: Majors Hit Three-Week Lows As Selling Intensifies

The cryptocurrency segment continues to be under strong selling pressure, despite the weekend bounce, and after turning lower yesterday in early trading, the top coins all dropped below key support levels. Even the relatively stronger ETH has been losing ground this week, breaking below a key support zone and thus making the outlook for the majors even bleaker even on the short-term time-frame.

On another negative note, BTC and XRP remain very weak from a technical standpoint, and since we don’t see sing of significant strength among the smaller coins, traders should remain defensive here. Our trend model is also confirming the broad weakness, and since the majors are approaching their October lows, another possibly violent downswing could be ahead following the failed counter-trend rally.

BTC/USD, 4-Hour Chart Analysis

BTC is getting closer to the lower boundary of its prior consolidation zone in the wake of yesterday’s breakdown, and the most valuable coin could soon be ready to test its late-October low, barring a quick reversal. The failed China-spike could lead to a significant wave of selling especially in light of the segment-wide trends and the bearish long-term setup in the coin’s market.

The coin is still on sell signals on both time-frames in our trend model, with support zones now found between $7,600 and $7.800 and near $7,000, and with resistance ahead near $8,200, $8,400, $8,650, and $9,200.

ETH/USD, 4-Hour Chart Analysis

ETH hit its lowest level in almost a month yesterday, and today it dipped below the $175 level as well after leaving the vicinity of the key $180-$185 support/resistance zone. With that, bulls are losing their best hope for a sustained rally, as there is still no leadership present in the segment. The coin now looks ready to test the $160 level, even though a broad turnaround could still save the coin from a damaging breakdown.

Our trend model is still on sell signals on both time-frames, with support zones now found near $160, $145, and $130, and with resistance zones ahead between $180 and $185 and near $200 and $230.

XRP Breaks Key Support As LTC Fails At $56

XRP/USD, 4-Hour Chart Analysis

XRP continues to trade in tandem with BTC as one of the weakest majors from a short-term standpoint. Since the coin is approaching its prior bear market low, it might lead the way lower in the coming weeks. The coin violated the $0.2475 support just after breaking clearly below $0.26, and sellers continue to be clearly in control of its market.

XRP is still on sell signals on both time-frames in our trend model, with support zones now found near $0.23 and $0.21, and with resistance zones ahead near $0.2475, $0.26, $0.28, and $0.30.

LTC/USD, 4-Hour Chart Analysis

While the sell-off paused in LTC’s market near the $56 level yesterday, the coin moved clearly below that level today in early trading, warnings of further losses ahead. LTC is still in a safe distance of its prior bear market low, but as it failed to show relative strength recently, its long-term weakness could be ready to dominate again, which would be a strong warning sign for the whole segment.

LTC remains on sell signals on both time-frames in our trend model, with support zones no found near $51 and $44 and with further resistance zone ahead near $64 and $75.

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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.