Long-Term Cryptocurrency Analysis: Bear Market Continues With Major Technical Breakdown

After months of choppy consolidation, yesterday, we saw the largest move in the cryptocurrency segment since April, which took the majors below key technical levels. Bitcoin’s drop is the most important event, since the most valuable coin violated a structurally important base support for the first time since its historic bull run to $20,000 started.

As we warned repeatedly, the market didn’t show signs of healing during the sideways drift, since no leadership developed, and the coins failed to show follow-through following the, sometimes explosive rally attempts, so our trend model remained overwhelmingly bearish throughout the consolidation.

The top altcoins completed their structural breakdowns well ahead of BTC, and the stability of Bitcoin was the most encouraging sign for crypto-bulls, so now, the broad selloff confirmed the next lower in the bear market.

BTC/USD, Daily Chart Analysis

After violating the primary support at $6275, Bitcoin’s selloff accelerated below the weaker $6000 level and the key zone near $5850 wasn’t enough to support the coin. The structural breakdown will likely lead to a test of the $5000-$5100 zone, while an unlikely recovery would be a very positive development. Primary resistance is now ahead near $5850, while further major support zones are found near $4500 and $3600, and traders and investors still shouldn’t enter new positions here.

ETH/USD, Daily Chart Analysis

Ethereum fell to a marginal new bear market low, outperforming Bitcoin from a short-term technical perspective, but that’s not enough to warrant optimism with regards to the long-term setup. ETH is still in a clear long-term downtrend despite the lengthy consolidation phase, and a test of the $160 level is likely in the coming period.

The coin is still on sell signals on both time-frames in our trend model, and traders and investors should stay away from new positions, with further support found near $130 and with resistance levels ahead near $200 and $235.

Ripple

XRP/USD, 4-Hour Chart Analysis

While Ripple is still the most bullish top coin from a technical perspective, it also got dragged lower by the broad selloff. XRP break the rising short-term trendline but it managed to hold the crucial long-term support zone between $0.42-$0.46, avoiding a long-term sell signal in our trend model.

That said, given the segment-wide trend caution is still warranted, and traders and investors shouldn’t enter positions here. Below the key long-term zone, strong support is now found at $0.355, $0.32, and $0.26, while resistance is ahead at $0.51 and $0.64.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to be among the weakest majors from a long-term perspective, and it fell clearly below its previous bear market low near $47, as expected. The coin also violated the next major support zone near $44, likely setting up a test of the $38 support.

LTC is still on sells signals on all time-frames, with the steep declining trendline clearly being intact, and traders and investors shouldn’t enter new positions here.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is currently testing its previous bear market low, showing some relative strength to the bearish leaders of the market, but the long-term picture remains clearly negative and new lows are very likely in the coming days.

The coin is on sell signals on both time frames in our trend model, and traders and investors should stay away from entering positions here. Below $130, further support levels are found near $115 and $105, while resistance is ahead near $150 and $170.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to lead the way lower, together with Litecoin, and it fell to a new bear market low yesterday. The coin is now testing the $7.5 support, after spiking below it yesterday, and the long-term picture continues to be bearish, so traders and investors should still not enter positions here. The next major support zone is found near $5.5, while resistance is head near $9.30 and $11.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is among the strongest coins from a short-term perspective, clearly trading above its bear market low despite yesterday’s broad breakdown. That said, the bearish move triggered a downgrade in our trend model, and although the coin will likely be a leader in the coming rallies, traders and investors shouldn’t enter positions here.

The long-term downtrend is clearly intact in the coin, with resistance levels ahead at $100, $108, and $125, while key support is found near $80.

NEO

NEO/USDT, 4-Hour Chart Analysis

Despite the brief periods of relative strength, NEO continues to be among the weakest majors, and the coin fell to a new bear market low below the key support zone in the $13-$13.75 area. The coin is on clear sell signals on all time-frames in our trend model, and further new lows are likely in the coming period. Strong resistance levels are ahead near $16.50, and between $21 and $22, and traders shouldn’t enter new positions in the coin.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA also hit new bear market lows during yesterday’s plunge, briefly falling back to the key $0.35 level. Now, the coin is hovering around the $0.40 level, and the sell signals are intact on both time-frames in our trend model.

IOTA is relatively weak compared to the broader market, especially from a long-term perspective, and traders and investors should wait until, at least, a short-term trend change before considering new positions in the coin, with strong resistance now ahead in the $0.45-$0.48 and near $0.57.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS confirmed its recent weakness yesterday as it plunged lower together with the broader market, and it traded below the key $4.5 level for the first time since August. That said, the coin is still above its bear market low, and bulls can still hope for a successful test, although odds favor a breakdown to new lows. The next major support level is found at $3.5, while resistance is ahead at $5 and near $5.35.

Stellar

Stellar/USDT, 4-Hour Chart Analysis

Stellar has been one of the strongest coins in recent months, and it is still trading well above its bear market low, similarly to its close peer Ripple. Stellar breached the key support/resistance zone surrounding the $0.24 level again, and the possible failed break-out above the declining long-term trendline is threatening with a test of the structurally important $0.1775-$0.195 zone. For now, the long-term picture is neutral, but traders and investors shouldn’t enter positions here.

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.

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