Technical Analysis: A Durable Low Might be in as Bitcoin Hits $7650

Cryptocurrencies got slaughtered in the first two days of February, with this morning’s sell-off closely resembling a wash-out liquidation event. While a confirmed trend change is far away, given the technical damage that the coins suffered, today’s panic low could be a significant bottom or the start of a more complex bottoming process.

With all that in mind, short-term trades should still expect wild swings and high volatility, but long-term investors could add to their holdings in the already oversold coins on the short-term sell-offs.

Bitcoin turned higher during today’s bounce almost perfectly form the $7650 level that we have been monitoring as a possible target, but as the downtrend is still intact, another test of that level or a spike below it is not out of the question.

That said, the long-term picture is now clearly oversold, and the short-term setup suggests a durable bounce too. Resistance is ahead at between $9000 and $9200, and at $10,000, while primary support below the lows is in the $6750-$7000 zone.

BTC/USD, 4-Hour Chart Analysis

Ripple plunged all the way to the $0.68 support during the crash, and now it is hovering around the prior low near $0.85. The coin is oversold from both short- and long-term perspectives, and we expect a durable rally in the coin soon, with resistance levels ahead at $1, $1.25, and $1.5. Below $0.68, the only significant support is found at $0.42.

XRP/USDT, 4-Hour Chart Analysis


ETH/USD, 4-Hour Chart Analysis

Ethereum only re-tested the previous low today, hitting a marginal new low below it, bringing the long-term momentum indicators close to neutral territory. That said, we expect the correction to continue in the coin, as it is in an earlier phase of its cycle than the rest of the market. Primary support is just below the current price level at $850, while further support levels are found at $625 and $575, with resistance ahead at $1000.


LTC/USD, Daily Chart Analysis

Litecoin tested the $100 level during the crash as we speculated, after plunging below the $125 level in early trading. The long-term picture is now oversold, and the final low might be in. Long-term investors could still add to their holdings on the short-term sell-offs, and aggressive traders could also open speculative positions near the main support levels, with resistance ahead at $140 and between $170 and $180.


DASH/USD, 4-Hour Chart Analysis

Dash spiked below the $500 support level and the long-term rising trendline today, but it recovered quickly together with the broader market, and the low might have marked the end of the correction. That said, a longer bottoming process could be ahead, and a test of the low is still possible. Resistance is ahead between $600 and $650 and around the $825 level.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic hit the primary support level below the prior all-time high near $18 during the crash before recovering to the $23 level. The coin likely hit a durable bottom today, but the downtrend is still clearly intact, and traders should wait for a trend change before entering full positions here, while investors could add to their holdings.


XMR/USD, 4-Hour Chart Analysis

Monero tested the $200 level as we expected, and hit a low near $190 during the crash, and bounced back to the prior low at $240 following the bottom. While the cycle low might already be in, a longer bottoming process could be ahead, with key resistance ahead at $280, $300, and $330 and further support near $175.


NEO/USDT, 4-Hour Chart Analysis

NEO is still in a similar position as Ethereum, being in an earlier phase of its correction, although the coin did breach the $100 level already as we expected. Despite the already deep correction we expect the move to continue, and traders and investors should stay away from entering new positions, with further support levels found at $80, $64, and $56, and key resistance ahead just above $150.


IOTA/USD, 4-Hour Chart Analysis

IOTA turned almost precisely at the $1.5 level that we have been pointing out for weeks, and the coin might hit the final bottom of the cycle today. While a longer bottoming process is possible, long-term investors could add to their positions on the short-term sell-offs, as the currency is now oversold from an investment standpoint. Support below $1.5 is at $1.1, while resistance is ahead near $1.9, $2.20, and $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.

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.