Technical Analysis: Altcoins Lead Markets Lower as Bitcoin Still Looks Strong
All of the largest digital currencies are in the red today, following heavy overnight selling, a bounce in European trading, and another round of losses around the US market open. Ethereum is still in the worst short-term shape among the giants of the segment, and that’s in line with the slightly delayed cycle of the coin that we have been monitoring.
The technical divergence between the leaders of the market and the laggards yesterday is still dominant with the 6 coins that spearhead the rally, BTC, LTC, NEO, Dash, Monero, and ETC, are still in much more bullish setups than the rest of the majors.
Bitcoin is also well below its recent rally highs after breaking down under the key $11,300 level, and a test of the $10,000 support now looks likely, while a move to the $9000-$9200 zone would still keep the rising trend intact.
The overbought short-term momentum readings are being cleared, and despite the slightly bearish volume patterns, we expect the coin to continue its new bullish cycle after the correction, with targets above $11,300 ahead at $13,000 and $14,250.
ETH/USD, 4-Hour Chart Analysis
Ethereum is now trading below the key $845 level as the correction continues, as we expected, and the coin remains stuck in the dominant declining trend, for now. We still expect a breakout in the coming weeks, but a test of the $740 level is possible before another rally. Further support below that is at $625 and $575 and we don’t expect a new low in the coin, so investors could still accumulate the coin near the main levels.
LTC/USD, Daily Chart Analysis
Litecoin’s break-out above the prior rally high got interrupted by the broad sell-off in the segment, but the coin remains in a strong technical position. Although further downside is possible, with a test of the $180 level in the cards, we expect the currency to resume its uptrend after the correction, with resistance levels ahead at $225, $250, and $300, and further support at $170 and $150.
DASH/USD, 4-Hour Chart Analysis
Dash is showing short-term relative strength today, holding up above primary support and the prior declining trend. Even if the coin continues lower, we remain long-term bullish, and investors should add to their holdings, while traders could also be looking for entry points near the main levels. Support is now found at $650, $600, and $500, while resistance zones are ahead near $700, around $825, $950, and $1000.
XRP/USD, 4-Hour Chart Analysis
Ripple has broken below the $1 support level during today’s sell-off, but it remains inside the trading range that developed after the initial post-crash surge. We still expect the correction to end soon, with a possible test of the $0.85 level before that. Further support is at $0.68, while targets are ahead at $1.25 and $1.50.
ETC/USD, 4-Hour Chart Analysis
ETC is testing the $32-$34 support zone following the sell-off, and the coin continues to trade in a clear short-term uptrend. As the coin is ahead in the cycle compared to the rest of the majors, investors should avoid new positions here, although traders could still look for reversals near the main support levels. Major levels are found near $30 and $27, while resistance is ahead near $37 and $43.
XMR/USD, 4-Hour Chart Analysis
Monero is still showing relative strength compared to the other altcoins, trading in a short-term consolidation pattern between $280 and $330. The coin will likely resume its uptrend after the correction and a rally towards $400 is in the cards in the coming weeks, with further support found at $240.
NEO/USDT, 4-Hour Chart Analysis
NEO followed the broader market lower, as expected, despite the relative strength it showed before. The currency failed to break above the dominant declining trendline, and we expect the correction to continue, similarly to Ethereum. That said, we don’t expect new lows in this cycle and investors should still accumulate the currency, with key support around $100, and $80, and resistance ahead between $120 and $130, just above $150, and near the all-time high at $190.
IOTA/USD, 4-Hour Chart Analysis
IOTA fell below primary support today, still showing weakness compared to the leaders of the rally, as it failed to break-out above the key resistance zone between $2.2 and $2.35 before. We still expect the rally to continue after the correction and investors could still add to their holdings. Support is now found at $1.5, while primary resistance is near $1.9.
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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.