Technical Analysis: Coins Suffer Blow on Chaotic Session, Ethereum and NEO Hold Their Ground

It has been a controversial session in the cryptocurrency segment as the day seemed like the replay of the pre-Christmas mini-crash, and most of the majors traded sharply lower compared to Sunday’s prices. While the news regarding a hardline approach towards crypto-trading was what started the decline, and the picture turned from bad to worse later on.

Apparently, a significant change in the pricing methodology of the widely used Coinmarketcap website played an important role, as it triggered a wave of panic-selling after signaling a sudden move lower in several of the largest coins. (*our analysis haven’t been relying on price data from the website, but the whole market was affected by the reaction)

That said, the initial sell-off ended in a bounce, but most of the majors didn’t recover the losses, and the technical setup remains in line with the continuation of the broad correction. Bitcoin spiked below the $14,000 level during the move, and it recovered above $15,000 later on, but the digital currency remains under pressure. Key support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

Ethereum, on the other hand, continues to show relative strength, as it recovered most of its losses and it is trading near its all-time highs that were set in the morning. The coin is still within a short-term uptrend, but the overbought momentum readings point to a coming pull-back soon, with the long-term picture also being stretched. That said, short-term gains still possible, but investors shouldn’t enter new positions here. Key support levels below $1000 are found at $850, $740, $625, and near $575.

ETH/USD, 4-Hour Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is among the weaker majors following the turmoil, as it is still trading in the key zone between the $250 and $260 levels. As the long-term setup remains bearish, we expect further downside in the coming period, with a likely test of the lows from the mini-crash near $180. Key support levels are found at $125 and $100, with a weaker zone around $170, and primary resistance is near the current price range.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is also trading well below the weekend levels, near $1100, and it remains far off the record highs of mid-December. Given the still negative outlook after the run-up to the all-time high, the correction will likely continue, and the currency is expected to drop below the previous low just above $850. The primary support zone is still found at $1000 and further important levels are still are near $600, at $500, $470, and near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple has been in the epicenter of today’s market anomaly, as the coin traded with the largest premium on the South Korean exchanges. The currency briefly dropped below the $2 level thanks to the domino-effect of the sell-off and although it recovered back to the levels before the flash crash, it remains well shy of the recent highs, as the correction is still ongoing. The dominant trendline of the previous advance is now broken, and support levels are still found at $2.10, and  $1.50, and with further levels at $1.8, $1.25, $0.85, $0.68, and $0.42.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is still trading near the key $34 level, as the coin is among the stronger majors since the early sell-off.  That said, we expect another leg lower in this cycle, with a likely dip below the previous all-time high at $23. We still Strong support levels are still found at $30, $23, and $28, while resistance is at $34 and $40.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is back above $400 after the brief dip, and the coin is even stronger relatively speaking than Ethereum, trading on an almost 3-week high after the bounce. The coin is still likely to continue the broad correction, as the long-term picture remains overbought, but the short-term strength could signal another test of the December high. That said, investors should remain patient and wait for the overbought readings to get cleared before entering new positions. Support levels are still found at $300,  $240, $200, $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO fell almost to the dominant rising trendline today, but the coin recovered well, and it is testing the all-time highs yet again. While the long-term picture is now not favorable for new investment positions, traders could still play the short-term trend with smaller positions, with support now found at $100, $80, $64, and $56.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA also spiked lower together with the broader market, and although the coin bounced back heavily, it remains stuck in a broader correction pattern. While the continues to trade ahead of the rest of majors in the cycle, investors should still stay away from opening new positions, as volatility is expected to remain high. Strong support levels are still found at $3 and $1.5, with a Fibonacci support between those at $2.35.

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.