Crypto Update: Sell-Off Loses Steam but Majors Not Out of the Woods

While the major coins got hit hard yesterday in late trading, the cryptocurrency segment settled down today, and bulls avoided a major breakdown yet again. That said today’s bounce is far from being convincing, and with the top coins still being stuck below key support levels, even the immediate outlook remains bearish.

Last week’s lows are still safe, in most cases, with only Ripple falling below its respective low, hitting an almost one-month low. BTC continues to hover around $11,300, while ETH and LTC are also trading between strong support and resistance levels, adding to the choppiness of the price action in the segment. In light of last week’s high-momentum sell-off, bulls should remain cautious here the move is still more likely to continue soon.

Our trend model remains on sell signals on both time-frames concerning all of the top coins, with even the relatively stronger coins, such as BTC and LTC being well shy of a renewed short-term buy signal. Until we see signs of broad strength in the segment, traders shouldn’t enter new positions, with especially the weaker coins being risky.

BTC/USD, 4-Hour Chart Analysis

Although BTC plunged below $11,000 overnight it got back above the key $11,300 level today in early trading, still hosing sings of relative strength compared to the major altcoins. From a technical standpoint, BTC is still only in a consolidation pattern, and barring a break below $9200, which is still likely from a broader perspective, the uptrend might still resume.

That said, our trend model remains on sell signals on both-time frames and traders should wait for clear signs of technical strength before reentering the market. Initial support is found near $10,000,  while below that, further support zones are found near $9400, $9200, and $8400, with resistance levels above $11,300 ahead near $13,000 and at the prior swing high just below $14,000.

ETH/USD, 4-Hour Chart Analysis

Ethereum bounced back despite yesterday’s scary-looking late-day sell-off, and the relatively weak coin remained well clear of the $275 support zone, even though it is well shy of the $300 resistance level as well. The coin is still likely to move below the ‘no-man’s-land, but a recovery is still not ruled out, despite the broad weakness in the segment.

Our trend model is still on sell signals on both time-frames, and barring a quick recovery a clear break below the previously dominant rising trendline is possible in the coming Initial support is found near $275, with further zones near $260, $230, and $200, while resistance above $300 is ahead near $330, and at the prior swing high near $360.

Ripple Breaks Support As Liteocin Holds Up Near Key Trendline

LTC/USD, 4-Hour Chart Analysis

Litecoin is virtually unchanged today as although the coin sold off together with the broader market yesterday in late trading, it held up well near a crucial trendline, being in safe distance of its recent low. LTC is also north of the $110-$112 support zone, but with the long-term pressures in mind, even the relatively stronger coin is facing significant downside risks here.

The coming days could be crucial for LTC and the whole segment and a clear move below $110 would likely confirm a major top in the coin’s market. Below $110, further support levels are still found near $100, between $85 and $90 and near $75, while above the initial $125 level, resistance is ahead near $140 and $150.

XRP/USD, 4-Hour Chart Analysis

Ripple confirmed its notorious relative weakness again, dropping below its prior low and getting very close to the crucial $0.3750 support level in the process. The coin is now in a new short-term uptrend and although a segment-wide rally could save it from a more significant sell-off downside risks are very high here, and traders should continue to avoid XRP, even on the short-term time-frame.

Our trend model is on clear sell signals on both time-frames, and a move below $0.3750 would likely lead to a test of the $0.3550 level, with the key long-term $0.30 price level also likely to be retested in the coming weeks. Below $0.3550, further support zones are found just above $0.33 and near $0.32, while resistance levels above $0.3750, are ahead near $0.40, $0.42, $0.46, and $0.51.

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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.

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.