Cryptocurrency Analysis: Correction Continues as Volatility Surges Across the Board

It’s been a wild session for cryptocurrencies after yesterday’s crazy trading, with most of the major coins registering extreme price swings. The surge in volatility led to record trading volumes and some of the main exchanges experiencing technical difficulties, while the segment’s roller coaster ride continued.

Bitcoin fell as low as $9000 as it took out yesterday’s lows, but the decline was interrupted by wild rallies, with the coin trading in a more than 15% daily range. The digital currency is stuck below the $10,000 level and given the severely overbought long-term picture, the correction will likely reach much lower, although a re-test of the highs is still possible after the initial break-down. Key support levels are still found at $8200, $7700, $7000, and $6700.

BTC/USD, 4-Hour Chart Analysis

Ethereum followed the most valuable coin closely during the current correction, and the price of the ETH token also fell below yesterday’s minimum today, getting close to the prior all-time high at $400, after the prior break-out and rally up to the $500 level. As the short-term momentum is now neutral, a meaningful bounce can happen at any time, but we expect the broad to continue despite the bounces, with a possible test of the $380 and $350 levels in the coming period.

ETH/USD, 4-Hour Chart Analysis

Dash is by far the best-performing cryptocurrency lately, and the coin even hit a marginal new high amid the bounce today, while the rest of the majors suffered meaningful losses, with the total market cap of the segment retreating by around 20% off its recent highs.

Volatility is expected to remain elevated after the stellar rise, and we advise traders to wait until the overbought readings are cleared before entering major positions. Let’s see the detailed short-term outlook for the most traded altcoins.

Litecoin

 

LTC/USD, Daily Chart Analysis

Litecoin suffered major losses after breaching the $100 level yesterday, and it tested the $75 support today, before rebounding back above $80 thanks to the broad rally. The short-term MACD is headed for oversold territory and a meaningful bounce is likely in the coming days, but we expect a durable consolidation phase following the recent rally, with further support below $75 found at $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash rose above $800 surprisingly despite the yesterday’s crash, hitting yet another record high, defying the negative trends in the segment. While we still think that the coin is among the strongest regarding the investment prospects, a deeper correction is very likely in the coming weeks, and better buying opportunities will emerge. Key support levels are found at just above $600, at $500, $470, and near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple remained relatively weak from a long-term technical perspective, as it has been following the segment lower during the correction. That said, the coin remains on a buy signal for investors, with strong support levels around the $0.2250 and $0.20 levels. We expect volatile trading to continue in XRP as well, with targets ahead at $0.26 and $0.30.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to trade in the vicinity of the prior high at $23, after the sharp correction off its recent all-time high. The coin is still overbought regarding the long-term momentum, but the short-term MACD points to a bounce in the coming days. We expect the correction to continue, with strong support levels found at $18l, and $16.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero hit joined the correction in earnest after hitting our final target for the current leg higher near $200, and the coin spiked almost back to the $150 level today, testing the previous all-time high. The long-term picture still suggests further correction, and a move towards the $125 level seems likely before another durable rally.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO fell back to the vicinity of the crucial $30 level, as the volatile crypto-correction dragged the coin lower as well. That said, the encouraging long-term view is unchanged, and we expect the recovery in the currency to continue towards the all-time highs after the broad correction runs its course. Further support is found at $27, while targets are still ahead $40 and $50.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA showed relative strength during today’s secondary sell-off after spiking below the previous all-time high at $1.10 yesterday. Despite the current strength, the coin is still extremely overbought on all time frames, and investors should wait with opening new positions until a deeper correction. Support levels below $1.1 are still found at $1, $0.75, $0.64, and $0.56.

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.