Crypto Update: Top Coins Break Support as Consolidation Period Ends

The bearish trend in the cryptocurrency segment proved its strength yet again, as following a lengthy period of consolidation, most of the majors broke below key support levels today, hitting new 1-month lows in the process. While there are a few positive signs that could give hope to bulls here, especially the relative stability of Bitcoin, the continued drag of Ripple and Ethereum is seems to be damaging for the whole market.

The long-term downtrend remains clearly dominant in the market, and with the break-down, a new short-term downswing is also likely underway, so our trend model remains on firm sell signals on both time-frames in case of the overwhelming majority of the majors. Traders and investors should still stay away from entering new positions, as now, the test of the bear market lows looks even more likely for the top coins.

ETH/USD, 4-Hour Chart Analysis

ETH is still well above its respective bear market low, but XRP got very close to hitting a new low already, as after the moves below the $112 and $0.30 support levels, bulls failed to step in and buy the dip this time around. With the two coins leading the way lower, investors should pay special attention to them in the coming days, and Ethereum’s test of the $95-$100 zone now looks imminent.

That’s the last line of defense for bulls ahead of the bear market low near $80, and for now, a move below the key support zone seems likely. ETH is still on sell signals on both time-frames in our trend model, with further resistance ahead near $120, $130, and $145.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin broke below short-term support near $3450, falling together with the broader market, it remains well above the next, short-term, support zone found at $3250, and the key long-term zone near $3000 is still in no danger here. This relative stability could help the whole segment in avoiding another dip to new bear market lows, but the coming weeks will crucial for BTC and the rest of the majors as well.

Traders and investors should still not enter positions here, despite the coin’s stability, and our trend model remains on sell signals on both time-frames, with further resistance zones ahead near $3850 and between $4000 and $4050.

Altcoins All in the Red Despite Pockets of Strength

XRP/USDT, 4-Hour Chart Analysis

Ripple got close to testing its prior bear market low near $0.28 as we expected following an extended period of relative weakness, and XRP still looks ready to hit new bear market lows in the coming period. Of course, a failed break-down and a subsequent recovery is possible here, but until we see signs of technical strength bearish risks are very high.

XRP faces strong resistance near $0.30, $0.32, and $0.3550, while the next major support zone is found near the $0.26 price level, and our trend model is on clear short- and long-term sell signals here.

EOS/USD, 4-Hour Chart Analysis

Most of the other major altcoins also fell sharply today, while the few relatively stronger currencies, such as Litecoin, Tron, and Binance Coin, also got under pressure, and although they are holding up above their respective primary support levels, traders shouldn’t enter new positions here, given the market-wide pressures.

LTC/USD, 4-Hour Chart Analysis

That said, should the strength in those coins persist, together with BTC’s stability, they could serve as the basis of a developing bullish leadership for a coming upswing. Litecoin, for example, is still holding up in the $30-$30.50 zone, but for now, there is no sign of bullish momentum and the bearish long- and short-term trends remain intact, so traders should avoid LTC as well. Further support is found near $26 and at the bear market low near $23, while resistance zones are ahead near $34.50 and $38.

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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.