*** Please note the analysis below is not investment advice. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of U.Today. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Bitcoin breaks all the important support levels
The image above shows that the market is full of panic, again! Bitcoin moved downwards $370 within two hours, and altcoins are obviously in the deep red confirming that move: -8 percent to -10 percent on an average. The volume was pretty high: the last time when there was that kind of volume was on Sept. 5; then BTC dropped down from $7,400 to $6,300.
The BTC price made a very strong downwards breakouts from patterns and price levels:
* Break below the curve support;
* Breakout from the “Triangle”;
* Break below the round number at $6,500 which has held us nicely through the time but currently is like a warm knife through the butter;
* Break below from strong support area at $6,460, the same story as at $6,500;
* Break below from the major counter trendline;
* The price structure has made a new lower low (LL on the chart).
So, all the important levels are cracked and the four-hour candle close confirms that move.
Currently, the price almost touched the next strong support area at $6,250 and this ‘almost’ is a bad sign because, at the moment, the bounce came from almost nowhere, and what we need now is a good and clear support level. So, despite a small bounce upwards, we think we will see another leg downwards to at least $6,000, and if it is not a bear trap, then probably even lower. What can save us from a catastrophe if it is a bear trap is the bulls — bullish market makers, not us, retail traders — being able to push the price back up today or tomorrow.
Our recommendation is to stay away from the market since it is definitely risky to invest somewhere now because the down pressure is very high and even if it is a bear trap, nobody can forecast it. Let things settle down, be cautious and remain a neutral observer.
Ethereum (ETH/USD) hanging above the round number
The market is full of panic and so is Ethereum. ETH had a more than 11 percent drop and currently, it has found a support from the crossing area which consists of ‘longer and smoother trendline’ and the round number $200.
Ethereum trades again below the short-term counter trendline. The price structure has changed, several previous higher lows are history, and we have a new lower low on the chart.
If Bitcoin starts to make another leg down, ETH is in a big trouble, and if the next support level at $193 doesn’t hold us then we go and retest the 2018 low level at $167. Before that, it does not have any significant supports to stop that price, so watch what BTC does.
RIPPLE (XRP/USD) can make a big drop
As you might know from our previous post, there was a red box which confirms bearishness if we got a candle close below that area, and so did we and after the market drop, we came down pretty heavily.
Currently, the price has stopped on the counter trendline which is pulled from the peak. It is not a confirmation since this trendline is too sharp but still. It has made a new lower low and is approaching the round number $0.4.
As we’ve mentioned earlier, the $0.4 area is quite a significant level: the round number itself has to work as a support and from the peak Ripple has dropped around 50 percent. This 50 percent is usually a good bounce level but currently, we can’t say that we get a bounce from there: probably BTC has another leg down ahead and this move may drop XRP pretty heavily to the bottom. Recently, Ripple has made highest gains, and now it can make the highest drop, so watch it and Bitcoin closely: if the latter shows move upwards from supports then XRP has a good bounce area at $0.4.
If the $0.4 level breaks then the next support would be the major down-trendline since Feb. 17, 2018, at $0.35. It is not a very strong support, definitely it could go lower, but currently, it’s very hard to tell where the Ripple lands. So, one more time, please be cautious and stay away from the market.