Technical Analysis: Selling Resumes in Bitcoin but Trading Remains Thin

As traditional markets came back to life after the Christmas break, the correction in crypto assets that started last week seems to be resuming. Bitcoin hit an intraday high near the $16,500 level before turning sharply lower in the second half of the session, currently trading around 10% below the highs. Altcoins are also lower, although the correlation between the major coins is less apparent than at the end of last week, and all of the largest currencies are still well above their mini-crash lows.

BTC, which has been clearly showing the way for the market in the past week, took the driving seat today as well, and the coin remains in a bearish long-term setup, following the recent stellar run-up. We still expect the coin to breach the correction low and trade below $10,000 before the end of the cycle, with key support levels found at $13,000, $11,300, $10,000, and $9000, with stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

Litecoin dipped lower together with Bitcoin today after lagging behind during yesterday’s rally. The coin also cleared the oversold short-term readings thanks to the bounce, and the continuation of the correction is likely in the coming days. Crucial support levels are still just below the current price between $250 and $260, at $125 and $100, with a weaker zone at near the $170 level.

LTC/USD, 4-Hour Chart Analysis

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum drifted higher in early trading today, retaining its relative strength among altcoins, but the coin fell back below the $750 later on as the broad selling pressure affected the coin. The technical setup is still much better than BTC’s for the second largest digital currency, and thanks to the less stretched long-term picture, we expect a milder correction in ETH. Initial support is still around the current price, while key levels are now found at $575, between $480 and $500, and near the prior all-time high at $400.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is still relatively weak regarding the short-term picture, and as we expect the broad correction to continue in the segment, the coin will likely hit new correction lows in the coming week. That said, as the long-term picture will likely get much more constructive, investors could be adding to their positions soon. Major support levels found are still found at $1000, $800, $650, and $600.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple remains the strongest major coin from a short-term perspective, as it is trading just below its all-time high near $1.25. While traders could still play the short-term trend, investors should remain patient and wait for the next correction before adding to their holdings after the recent almost 500% rally. Support levels are found at $1, $0.85, $0.68, $0.4250 and in the $0.30-$0.32 range.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is trading back under the $30 level following the sell-off in the second half of the session, and the coin remains in a bearish long-term setup as well. The short-term momentum is now in a neutral territory, and we expect the correction to continue, with key support levels still at $25, $23, and $18, while resistance ahead above $30 at $32 and $40.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero took a bearish short-term turn today, as we expected, despite its resilience in the recent period, and the coin is now close to breaking below its dominant rising trendline. With the long-term momentum still being extremely overbought, a deeper correction is likely, and investors should still wait before adding to their positions. Primary support is at $300 with further important levels found at $240, $200, $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO continued to be one of the most active majors, although trading volume remained low in the coin’s market. The currency briefly moved above the short-term correction pattern that has been dominating trading recently, but the broad dip pulled the coin lower, and the consolidation will likely continue, despite the encouraging long-term setup. Key support zones are still found near $56, $50, and around $40, while resistance is ahead at $64 and $80.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA has been flirting with the previously broken rising trendline today, but the coin turned lower together with the rest of the market after spiking above the $4 level in early trading. The currency remains suspect of further corrective price action, despite the previous deep sell-off, and we expect a drop below $3 in the coming period. Strong support levels are 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.
Comments
  • Hi. Thanks for your daily analysis on thisl. If BTC drops like you think it will, do you think it will rise again sharply? Do you think it would get back to 14-15k quickly (if at all)? Thank you.

Leave a Reply