Crypto Update: Technical Outlook Deteriorates as Selloff Continues

While the major coins are slightly off their lows before the start of the US session, the cryptocurrency segment is having a clearly bearish day so far. Several coins triggered downgrades in our trend model in the past 24 hours, falling below key support levels and trendlines. Most of the top coins are only modestly lower, but Ethereum shed more than 5%, and Ripple, Stellar, and Litecoin are also weaker than average.

XMR/USDT, 4-Hour Chart Analysis

Now, only Ripple and Monero remain on short-term buy signals, and given the widespread weakness, traders should remain cautious even with the stronger coins. The currently stable Bitcoin is also on the verge of a possibly crucial break-down, and with no bullish momentum present among the smaller coins either, sellers are still clearly in control of the market.  That said, volatility is still relatively low, and today’s moves are far from being disastrous following the recent range-contraction in the segment

BTC/USD, 4-Hour Chart Analysis

While Bitcoin broke below the very narrow trading range and the $6500 price level, it is still holding up above the weak rising trendline. With that, the broader triangle pattern is also intact, but the most valuable coin is close to moving below the crucial formation, with all eyes once again on the $6275 support and the key long-term support zone below that near $5850.

The coin is still on neutral short- and long-term signals in our trend model, and traders and investors shouldn’t enter new positions here, with strong support levels ahead at $6750 and $7000, and further weaker support found at $6000.

Ethereum Leading the Way Lower Again

ETH/USD, 4-Hour Chart Analysis

Although Ethereum is also on a neutral short-term trend signal, the weakness of the recent days is a warning sign that the still clearly bearish long-term market forces could push the coin lower again soon. After rejecting the $235 resistance level, ETH is likely headed for the test of the $200 level, and a move below that would trigger a sell signal.

Below the primary support zone, further levels are found at $180, $170, and $160, and traders shouldn’t enter new positions here until sings of technical strength. Further strong resistance zones are ahead near $260 and between $275 and $280, with two strong declining trendlines also converging near that area.

XRP/USDT, 4-Hour Chart Analysis

Ripple now has clearly formed a triangle consolidation pattern, and today the coin only found support near $0.51, following the broader market lower. Despite the selloff, the short- and long-term buys signals are in place, but given the hostile market environment, traders shouldn’t enter full positions here.

XRP is facing strong resistance near $0.54, $0.57, and $0.64, while below $0.51 meaningful support is only found in the key long-term zone between $0.42 and $0.46.

LTC/USD, 4-Hour Chart Analysis

Litecoin continued to show weakness today, breaking below the short-term trendline that it tested yesterday. The relatively strong move triggered a sell signal in our trend model, and which is a bearish sign for the whole segment, as LTC’s strength was among the few encouraging signs in ht epast few weeks. The currency is trading just north of the key $56 level, with further support is still found near $51 and $44, while strong resistance is ahead at $64.

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.