The major coins are broadly lower today as the altcoin weakness that we have been seeing for several days now led to a major sell-off in the cryptocurrency segment. While we haven’t seen key support breaks in BTC and ETH just yet, the relatively weak Ripple broke below $0.30, the previously leading EOS violated the $5 level, while Litecoin also fell below its primary support zone.
EOS/USD, 4-Hour Chart
Bitcoin remains relatively strong from a technical perspective, holding on to its recent break-out to new 5-month highs, but given the broad weakness in the segment, that strength alone is unlikely to sustain the counter-trend move that started in February. With that in mind, the bearish long-term outlook is unchanged for the majors, even though the short-term rally might still resume.
Our trend model remains on sell signals on both time-frame for the overwhelming majority of the coins, and although BTC is still, barely, on a short-term buy signal, traders should still only consider short-term positions while using strict risk management rules. As we emphasized throughout the recent consolidation, even a broad upswing would keep the long-term bear market intact and investors should remain defensive towards the segment.
XRP/USDT, 4-Hour Chart Analysis
Ripple once again confirmed the apparent selling pressure in its market, leading today’s sell-off and plunging below the key $0.30 level following a period of bearish consolidation near $0.32. The relatively weak coin is now likely headed for a test of the $0.28 level, and a move to $0.26, which marks the August low, might also be ahead in the coming weeks.
A quick recovery could prevent an imminent bearish move, but given the hostile long-term technicals and today’s broad move in the segment, downside risks remain very high, and traders should still avoid entering positions in the coin. In the case of an unlikely recovery, resistance is also ahead near $0.33 and $0.3550, and our trend model remains firmly on sell signals on both time-frames.
BTC/USD, 4-Hour Chart Analysis
Bitcoin is still the most bullish top coin, and although it joined the broad sell-off today, it hasn’t confirmed a failed break-out, leaving the bullish short-term trend intact. That said, given the broad weakness in the segment, trades should be aware of a possible failed move, even though the structurally important $5850 level is still within striking distance.
Even the test of that level wouldn’t change our bearish long-term view, and a sustained move below the prior swing high near $5400 could lead to a quick drop to $5050. Below that further support is found near $4800, $4450, $4200, and in the $4000-$4050 zone, while above $5850, resistance is ahead near $6000 and $6100.
Ethereum Tests $160 as Litecoin Hits 3-Week Low
ETH/USD, 4-Hour Chart
Ethereum lost almost 10% compared to yesterday’s intraday high, which was just below the key $180 resistance, and now the coin is trading near the $160 support. While ETH hasn’t tested its recent pullback low, it broke below the rising short-term trendline, and it’s threatening to resume the bear market.
Below $160 the next major support zone is found near $145, and barring a quick recovery, the coin could soon test that zone as well. Ethereum continues to show relative weakness form a broader perspective, but as the short-term trading range remains intact, the counter-trend move might still resume. Our trend model remains on sell signals on both time-frames, with further support zones found near $130 and $112.
LTC/USD, 4-Hour Chart Analysis
While LTC remained relatively stable during today’s sell-off, it violated the initial support zone between $72.50 and $75, falling below its recent pullback low and hitting its lowest level since early April. The coin is trading right at a key rising short-term trendline, and bulls would need a quick recovery to keep the hopes of another leg higher in the counter-trend move alive.
Our tend model remains on sell signals on both time-frames, despite the coin’s leadership in the recent move, and until we see signs of relative strength in the coin’s market, traders shouldn’t enter new positions here. Further support zones are found near $64 and $56, while above the strong resistance zone between $85 and $90, another zone is ahead just above the $100 price level.
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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.