Technical Analysis: Bitcoin Tumbles Below $9000 as Coins Hit New Lows
The new correction lows that we have been expecting in the segment arrived today, as the selling pressure of the Asian and European session remained dominant as US markets opened. The most valuable coin is now more than 50% off its all-time high set in December, and the currency traded on the lowest levels since the end of November.
Most of the altcoins are also sporting heavy losses, with double-digit daily declines across the board. Correlations remain very high in the segment, with Ethereum’s continued relative strength being the only major outlier, while to some extent, NEO, Ethereum Classic, and Stellar are also holding up better than average.
Bitcoin is still not oversold from a short-term momentum perspective, but given the more constructive long-term setup, our trend model shifted from sell to neutral thanks to today’s plunge. Although further losses are still likely, a durable bottom could be close in time, and investors could still accumulate the coin near the main support levels at $8200 and $7650. Traders could enter smaller positions near those levels too, but volatility is expected to remain high, so risk management is still critical, as a “flush-out” liquidation event could happen to end the cycle.
BTC/USD, 4-Hour Chart Analysis
Ripple is showing signs of early relative strength today, as it is holding up well above the crash low near $0.85 following today’s breakdown. A test of that level is still likely, and a spike below the lows could even carry the coin back to the next main support level at $0.68, but the long-term setup points to a durable bottom soon, and investors could add to their positions during the current leg lower.
XRP/USDT, 4-Hour Chart Analysis
ETH/USD, 4-Hour Chart Analysis
Ethereum continues to be the strongest major, holding up above $1000 despite the selling pressure, and the still overbought long-term momentum readings. The coin is expected to continue its correction, and the current relative strength could end soon, with a dip below the $740-$750 zone being likely before the end of the current cycle. Above that zone, primary support is at $850, while further levels are found at $625 and $575, with resistance ahead at $1175.
LTC/USD, Daily Chart Analysis
Litecoin is trading right at the crash low near $140, as the coin followed BTC closely during the move lower, although it managed to avoid a break below the key level, for now. A move to $125 or even $100 is still likely before the end of the current cycle, but investors should be looking for entry points around those levels, as the long-term picture is getting oversold.
DASH/USD, 4-Hour Chart Analysis
Dash is hovering around its prior low as well, close to the $600 level, still being among the relatively weaker coins. A strong convergence zone is developing near the $500 level that could serve as an ideal target for the current cycle, and investors could already accumulate the coin.
ETC/USD, 4-Hour Chart Analysis
Ethereum Classic still trading above the crash low near the prior all-time high of $23, which level could be in focus in the coming days. Below that, the main support level is at $18, but the current relative strength suggests an earlier reversal, and investors could still accumulate the coin near the main support levels, while traders should still wait for a confirmed trend change.
XMR/USD, 4-Hour Chart Analysis
Monero is testing the crash lows, as we expected, and a move towards the $200 level is still likely in the coin, and a spike to $150 could also be in the cards in the case of a flush-out crash. Strong resistance zones are ahead at $280, $300, and $330. Long-term investors could add to their holdings near the main levels during the current leg lower.
NEO/USDT, 4-Hour Chart Analysis
NEO is in an earlier phase of its correction similarly to Ethereum, and the long-term setup remains overbought so traders and investors should stay away from entering positions here. A dip below $100 is very likely before the end of the cycle, with further support levels still found at $80, $64, and $56, while key resistance is ahead just above $150.
IOTA/USD, 4-Hour Chart Analysis
IOTA is the weakest major today, together with Bitcoin, and after plunging below the crash lows, it is likely headed for a test of the $1.5 level. The long-term picture is now oversold but volatility skyrocketed as we expected and traders could be in for a wild ride, even as a durable bottom should be very close. Long-term investors could accumulate the coin, and below $1.5, the currency could find support near $1.1 in the case of a liquidation event.
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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.