Crypto Update: Pullback Deepens as Majors Test Support Levels
Yesterday’s technically triggered dip continued today in early trading, with losses across the board among the majors. The failure of the two largest coins to break-out of their respective broad declining trend was behind the widespread selling, but the damage is limited so far, and the recovery that started exactly one month ago is still intact.
BTC/USD, 4-Hour Chart Analysis
That said, the short-term picture remained bearish in Bitcoin and the major altcoins, with Bitcoin dipping below the initial $10,500 support today before bouncing back slightly in the European session. The continued Chinese crackdown on the segment weighs on BTC besides the technical pressure, but the largest coin is still well above both the $10,000 and the crucial $9000-$9200 support, with plenty of space for the correction to run its course.
ETH/USD, 4-Hour Chart Analysis
Ethereum performed similarly to BTC since the trendline fail, and the coin is now back to $780 with another level at $740 providing further support below the initial zone. The longer-term picture remains positive and the momentum and the volume pattern of the decline are in line with ongoing recovery scenario. Resistance is now ahead at $845, $910, and $1000
All Majors in the Red, Ripple Back Below $1
LTC/USD, 4-Hour Chart Analysis
Litecoin is also following the largest coins lower, breaking below the $200 level again, but no real technical damage has been done so far, and above the $170-$180 support zone, the picture in one of the early leaders of the rally remains clearly bullish.
ETC remains under strong selling pressure among the other early leaders of the recovery, while Monero is still holding up well above its recent breakout level, but still trading in a short-term correction. The recent laggards continued to drift lower together with the segment, and the lack of rotation means that the pullback will likely continue.
The increased correlation between the majors is the only real red flag here, but we expect the major support zones to hold during the dip and the uptrend to resume afterward. Short-term traders should remain defensive until more signs of relative strength emerge, but long-term investors could still add to their holdings in the case of most of the majors, according to our trend model.
Stay tuned for our detailed technical analysis coming out later on today.
Featured image from Shutterstock