Crypto Update: Prior Lows In Danger As Coins Plunge Across The Board

The cryptocurrency segment is having its worst day since late-September, as after weeks of persistent selling, volatility exploded higher today in early trading. Despite the global weakness in risk assets, even the safe-haven BTC remained under pressure yesterday, and the broad weakness warned of a likely retest of the October low, which is already happening in the case of several majors.  All of the top coins are in dangerous short-term technical setups, and downside risks remain very high even in the wake of today’s losses.

Our trend model is also still firmly bearish, and should the majors erase their late-October spike, a significant downswing might soon unfold. With none of the majors showing meaningful relative strength, traders should remain defensive here, as, even in the proximity of key support zones, odds are heavily against bulls.

BTC/USD, 4-Hour Chart Analysis

BTC violated both t eh $7,800 and $7,600 support levels today, getting close to the prior low from October, as we expected. The coin remains relatively weak from a short-term technical perspective and while a new has been avoided so far, the downtrend is still likely to resume soon. Bulls need a small miracle to hold the prior low, as selling pressure remains apparent segment-wide.

The coin is still on sell signals on both time-frames in our trend model, with a weak support zone found at the prior low at $7,400, and a stronger one near $7,000, and with resistance ahead near $7,600, $7,800, $8,200, and $8,400, $8,650.

ETH/USD, 4-Hour Chart Analysis

ETH plunged lower together with the broader market, quickly getting close to and dipping below the key long-term support zone near $160. While ETH also avoided a key break below its prior low, the outlook remains dim, and the previously stronger coin is looking ready to continue the damaging long-term downtrend.

Our trend remains 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 Show Relative Stability As LTC Crashes Below $51

XRP/USD, 4-Hour Chart Analysis

While XRP has been the weakest link in the segment recently, its prior bear market lows are providing, likely temporary, relative stability to the coin. XRP remains well below the key $0.26 level, but the $0.2475 level is not unreachable thanks to the coin’s smaller-than-average losses. Despite its current strength, the coin is still likely to hit a new bear market low and continue its downtrend.

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

LTC is sporting the largest daily loss today, percentage-wise, and the coin clearly violated the $51 support level and got close to its prior low. LTC remains in a relatively weak technical position, from a long-term perspective, and since its short-term setup is also very weak, traders should avoid entering new positions here.

LTC remains on sell signals on both time-frames in our trend model, with the next major support zone now found near $44, and with further resistance zone ahead near $56, $64, and $75.

Featured image from Shutterstock

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.