Coinpocalypse Begins, Bear Market for Stocks

In September: Crypto Selling Resumes, Monster Topping Pattern on Ethereum, Watch Out FANGs

Finally, cryptocurrencies were the bleeding edge of speculative activity. The breaking of topping patterns in majors such as Bitcion and Ethereum will be a signal that stocks, particularly the FANGs, are on thin ice. Here's Alibaba (BABA), for example, sporting a topping pattern similar to Ethereum. Not as massive a topping pattern or with as low a target, but it will cause far more losses. Ethereum has a $20 billion market cap that could go back to $1 or $2 billion, an $18 or $19 billion loss. Alibaba's market cap is $417 billion. A measured move off its topping pattern would cause $117 billion in losses.

In August: The Coinpocalypse

Finally, this is a classic collapse of a speculative bubble. It might benefit stocks in the near-term, but it strikes me as bearish, and not only because the stock market was tracking with cryptocurrencies earlier this year. Consider a stock such as Nvidia (NVDA) that sold the GPUs used by cryptocurrency miners...

NVDA lost 20 percent on Thursday last week and 12 percent on Monday, and down another 6 percent this morning in pre-market trading. It is down 53 percent off its high in about 6 weeks.

There is very little support for alt-coins and even some that appear to have support levels, such as Monero (XMR) will probably be pulled lower by the undertow. The targets for Ethereum (ETH) and Litecoin (LTC) are in the single digits, if not below $1.

As for stocks such as NVDA, well the pain may have only begun. Support for NVDA is below $50. Initial support is 77 percent below the current price. If this is a bear market and not a deep correction, there is a lot of selling to come.

Crypto Selling Resumes, Monster Topping Pattern on Ethereum, Watch Out FANGs

Most cryptocurrencies are not at new lows, but if they hold current levels (as of this post) they will "close" at new lows. The center of attention right now is Ethereum. It is tracing out a massive topping pattern. If this pattern breaks, a return to the $10 range looks very likely. There's a little support around current levels, but if the selling resumes, I don't see a lot of support between here and $10.

Bitcoin remains above the kep $6,000 level. If Ethereum breaks below here, I expect Bitcoin will lose $6,000 and the plug will be pulled on many altcoins. There are topping patterns in many charts as I've shown. One altcoin that remains a reliable indicator is Decred. As long as it's out of its channel, the cryptocurrency market is at higher risk of disorderly selling (crash).

Finally, cryptocurrencies were the bleeding edge of speculative activity. The breaking of topping patterns in majors such as Bitcion and Ethereum will be a signal that stocks, particularly the FANGs, are on thin ice. Here's Alibaba (BABA), for example, sporting a topping pattern similar to Ethereum. Not as massive a topping pattern or with as low a target, but it will cause far more losses. Ethereum has a $20 billion market cap that could go back to $1 or $2 billion, an $18 or $19 billion loss. Alibaba's market cap is $417 billion. A measured move off its topping pattern would cause $117 billion in losses.

Coinpocalypse Lies Ahead

About three weeks ago I posted The Coinpocalypse.

There might be another stick save for the cryptocurrency market because every time it seems like Bitcoin will make the final backbreaking drop, someone steps in to prop it up. That said, with Bitcoin losing $6000 again and many charts already turning ugly, it looks like the "shitcoin" apocalypse is underway. Previously, many alt-coins would also hold above key support levels, but this time some alt-coins are in full collapse.

There was another stick save in Bitcoin and over the past two days it shed more than $1,000 and is headed back for a test of the $6,000 area. Bitcoin is important because it's the engine pulling the train. If Bitcoin loses $6,000 the bottom will drop out of everything. Technical analysis works because it based on human psychology. It works best in emotional markets filled with amateurs. Below the $6,000 level, everyone buying Bitcoin in the last 11 months will be underwater.

Ethereum is the weakest right now. It has a massive topping pattern and broke to a new 52-week low.

Ripple looks like it's ready for a waterfall decline.

A lot of cryptos look like Litecoin, off their lows but still in clear downtrends. They haven't broken to new lows yet, but if Bitcoin loses $6,000, there are going to be major losses of 50 percent or more in a lot of coins. Bitcoin might still rebound, and of course I could be wrong and it breaks out. But since technical analysis has been working well thus far, I suspect Bitcoin has at most 2 months before it gives up $6k.

Litecoin Plunges Through $100 Line in Sand, Bitcoin Tumbles

The breakdown in Monero and Decred was the warning. Bitcoin tumbled to fresh lows although it is still above the February 6 low of $5968. Litecoin broke through the $100 line in the sand though. After that there is some support around the $50 to $60 area where it traded from June to October 2017, but after that support is around $5. That isn't to say it couldn't stabilize somewhere in between, but for now there is major downside risk if this move holds.

Looking at support levels for major cryptocurrencies, the next key level (if this dip holds) is Ethereum's support line about 11 percent below the current price. Bitcoin is 8 percent above support.

Crypto Massacre, Nasdaq Next: Bitcoin Crashes Through Support

Bitcoin has taken out a major support level. It briefly traded below $6000 in February, but that was quickly reversed. This move needs to reverse or it is a major bearish signal. Quick take: sell Decred if bearish, buy Monero if bullish on this price plunge. I remain intermediate-term bearish and expect Bitcoin will eventually trade below $5000.

Intraday and long-term chart of Bitcoin:

Decred holding up well as expected, but if Bitcoin doesn't rebound, there's a lot of room to drop.

Ethereum still well above support, but it's an 18 percent drop to support.

This bear move will escalate if Litecoin falls below $100.

Omisego

Monero is ugly. The next support is the psychological $100 level, the the prior basing pattern around $85, then the prior breakout/support level at $60.

Crypto Breakdown Looms Again

Bitcoin, Litecoin, Omisego and Decred are all near important support levels. Monero has already broken below support and remains the weakest of the group. Ethereum is farthest above support.

Bitcoin is still the most important cryptocurrency and is the engine pulling the train. Decred is the strongest of the group and is also the most "reliable" in its behavior. A break down along with Bitcoin would be an important signal.

A breakdown will have bearish implications for the stock market.

Crypto Breakdown Looms Once Again, Bearish for Stocks

Bitcoin is approaching major support at $7000. Other major cryptocurrencies are already at or through important support levels. Monero has broken through major support to the downside. Litecoin and Omisego broke back below support ) former, now once again resistance. Decred, which has been as close to a Swiss timepiece when it comes to hitting highs and lows in its channels, is threatening to break below. Ehthereum is above support, in a similar position as Bitcoin. A break lower in Bitcoin opens up a drop to a 4-handle or roughly ~30 percent. As goes crypto, so goes the stock market.

Bitcoin Support at $7k, Monero Weakest, Decred Strongest

Monero major support at $155, could be a major break coming up here. Decred adding privacy to compete with Monero may be playing a role because Monero's weakness is out of step with rest of cryptos. Litecoin and OmiseGo have similar charts. Bitcoin is the key, support at $7000.

Litecoin, Decred, Ethereum, Omisego Blast Off

Still waiting on a Monero breakout. This is probably the most bullish sign for the Nasdaq right now, that speculative fever in cryptos isn't dead yet.