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Analysis: Bitcoin and Ethereum Shine as Market Hits $160 Billion

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The two largest coins are on the move today, as Ethereum finally cleared the $350 mark after a period of gradually increasing prices, while Bitcoin is now at a new all-time high above the $4500 level. With the two behemoths increasing their market capitalization and BTC crossing $75 Billion for the first time, the total value of the segment got a boost as well, hitting $160 billion today. While Bitcoin is overbought regarding the long-term picture, the current rally could still carry the currency somewhat higher, although the odds of a bull trap are much higher than before, so only short-term traders should ride the wave, while investors should wait for a deeper correction to jump back in.

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BTC/USD, 4-Hour Chart Analysis

On the negative side, Monero and NEO are well below yesterday’s levels, and Litecoin is also lower than its break-out highs from the first session of the week. Dash, NEM, ETC, and Ripple are little changed, although XRP continues to be volatile, as bulls and bears battle for control near the $0.22 level. As the current leg higher in the sector is in its mature phase, risks are higher for investors, with only a few majors being clearly bullish and not overbought. Let’s see the detailed short-term analysis of the coins.

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Ethereum

ETH/USD, 4-Hour Chart Analysis

ETH is closing in on the $380 target level after today’s 5% rise, as the rising short-term trend remains intact. The all-time highs of the token are also within 10% now and a test of the $400 mark is in the cards in the coming days. The coin still has room to rally according to long-term momentum readings, so investors could still hold on to their positions for a possible break-out to new highs. Support levels are found at $330, $300, and $285.

Litecoin

LTC/USD, 4-Hour Chart Analysis

LTC is consolidating above the $60 level after its recent break-out. The coin hit a new high near $65, finally topping our long-term range projection target. With the long-term picture still being encouraging, a move towards $70 is still possible, and investors could still hold on to, at least part of their positions. Support is now found near the prior high at $56, near $51 and around the $46 level.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is trading in a narrow range today after retreating off the $400 level, back to the prior break-out high. The coin broke the short-term rising trendline, and although that doesn’t mean that a decline is imminent, the picture is risky for long-term investors, given the overbought momentum readings after the huge rally.  Strong support is found at $300, and near $266, and we expect a correction towards $300 in the coming weeks.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple is experiencing elevated volatility since its break-out from the prior long-term consolidation pattern, with the support/resistance zone around the $0.22 level still being in focus. The coin completed a short-term correction after the initial surge and a move above the declining trendline would open up the way towards the $0.30 again. Key support is found near the $0.20 level and at $0.18.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is drifting sideways today, still being stuck below the $16 level, as the current weak uptrend is in danger now. The coin remains the weakest major in the current leg of the bull market, and that could point ot further consolidation before a move back towards its prior highs. Resistance is ahead near $16, $18 and $23, while long-term support found around the $14 level.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is retreating after a failed short-term break-out above $150, as the steep uptrend in the coin is in danger now. XMR might be ready for a deeper correction in the coming period, after rising 400% since the July lows. Support is found near $125, at $100, $80, while only the recent highs are ahead as resistance.

NEM

NEM/BTC, 4-Hour Chart Analysis

NEM is still stuck in the broad trading range around the 0.000065 level despite yesterday’s encouraging strength, as the move in BTC pushed the pair lower today. As we still expect a deeper correction in Bitcoin, the pair could test the 0.000075 level again soon, while support is still found near 0.0000575 and 0.000048.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO fell sharply today in early trading after failing to rise back above $40 sustainably for almost a week. The coin found support near the $30 level again, and that zone could be in focus in the coming days if volatile trading continues in the currency. Short-term traders should wait until a new trend is established, while long-term investors should hold on to their positions.

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2 Comments

2 Comments

  1. jjkateam

    August 29, 2017 at 11:47 pm

    Hi, it would be great to get your opinion on TenX, do you see it as a game changer? What do u think will happen come September when the IOS app is released?

  2. Chris G

    August 30, 2017 at 5:16 pm

    I was hoping ETH would wait on breaking out until I had moved more funds in. Ahwell, still have done great on it all though I am not seeing any clear entry points atm. Maybe wait for Dash to correct …

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Analysis

Bitcoin’s Record-Breaking Rally Continues as Prices Cross $8,100

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Bitcoin surged to new highs on Sunday, as the world’s largest crypto by market cap continued to generate bids following the cancellation of Segwit2x.

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BTC/USD Price Levels

The value of a single bitcoin reached a daily high of $8,110.59, its best level on record. At press time, BTC/USD was valued at around $8,002 for a gain of 4%.

With the gain, bitcoin’s market cap now exceeds $133 billion. That’s roughly $100 billion greater than Ethereum, the market’s second most valuable cryptocurrency.

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Bitcoin has added more than $1,100 over the past five sessions. It was down around $5,600 just one week ago.

Bitcoin Cash (BCH), a digital currency alternative that broke away from the original blockchain Aug. 1, was down 5.1% at $1,185. BTC and BCH locked horns earlier this month after the Segwit2x hard fork was abandoned.

$10,000 and Beyond?

Institutional clearing platform LedgerX has initiated its first long-term bitcoin futures option, which is set to expire Dec. 28, 2018. In setting up the option, LedgerX is assuming a price of $10,000 at the time of expiration. That’s a 25% premium on current levels.

Investors who buy the option are essentially saying they believe prices will exceed $10,000 by the time of expiration.

Bitcoin is being helped by growing institutional demand for the digital currency, as hedge funds, day traders and other mainstream investment outfits look to access this burgeoning asset class. CBOE and CME Group have each announced plans to integrate bitcoin into more conventional investment vehicles in the coming months.

The rush of institutional money into bitcoin is a sure sign that the digital asset class is becoming too big to ignore. The value of all cryptocurrencies in circulation has already exceeded $230 billion, with more than a dozen coins valued at $1 billion or more. Nine others have a market cap of $500 million or greater.

Coinbase Responds

The rise of institutional capital has also compelled Coinbase to introduce a custodial service targeted at account holders with more than $10 million in assets. This service targets hedge funds and other institutions that have remained largely on the sidelines of the crypto revolution.

In a recent blog post, Coinbase CEO Brian Armstrong announced that the new service will launch sometime next year.

“When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely,” Armstrong wrote.

In addition to maintaining the minimum $10 million asset requirement, institutions must pay a $100,000 setup fee to gain access tot he Custodial program. In response, institutional investors will receive assurance that their assets are secure.

The Coinbase Custody website lists broad support for bitcoin, Ethereum (ETH) and Litecoin (LTC), as well as ERC20 tokens. The ERC20 protocol has emerged as the favorite for startups launching initial coin offerings (ICOs), a controversial crowdfunding model that has already overtaken early stage venture capital.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

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Cryptocurrencies

Is Ethereum Ready to Play Catch Up With Bitcoin?

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In mid-June of this year, the difference between the market capitalization of bitcoin and Ethereum had narrowed down to less than $8 billion. This had many market participants excited. They expected Ethereum to dethrone bitcoin as the leader, a move popularly termed as flippening.

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Key observations

  1. Ethereum has hugely underperformed bitcoin
  2. The chart pattern suggests that Ethereum is likely to play catch up in the next few months
  3. Stay on the long side of Ethereum to benefit from the bullish setup

However, fast forward five months and the difference in the market capitalization of the top two cryptocurrencies has increased to about $96 billion. This shows that while bitcoin has raced ahead in the past few months, Ethereum has hugely lagged behind.

However, is the underperformance about to end?

The chart pattern shows that Ethereum is likely to embark on a rally of its own that can carry it to $645 to $670 levels in the next few months. Let’s see how we arrived at these levels.

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Ethereum opened trading at $8.16 on January 1, 2017. It started its rally in March and by June 12, it reached a high of $420, an astronomical rally of about 5047%. Thereafter, it entered a period of consolidation, digesting the gains.

On the charts, Ethereum has formed a large symmetrical triangle, which usually acts as a continuation pattern. The breakout is generally in the direction of the long-term trend, or the trend that was prevailing before the pattern formed. In this case, the sharp move from January to June confirms that the cryptocurrency was in an uptrend before forming the triangle.

However, this is not a fool proof trade because sometimes the symmetrical triangle acts as a reversal pattern. Therefore, the best way to play this trade is to wait for a breakout of the triangle before initiating any trade.

Where can we take an entry?

Currently, the resistance line of the triangle is at about $378 levels, a level close to today’s intraday highs. The bears are likely to strongly defend this level. However, if the bulls breakout of $378 and manage to close above the resistance line, the trade on the long side will set up.

Different traders use different methods to confirm whether the breakout is valid or not. Some wait until price moves 3% above the breakout level, others wait for three consecutive closes above the resistance level.

However, we have observed that the best breakouts never look back, hence, waiting for three days may lead to a missed opportunity. Therefore, we can wait for a closing above the resistance line of the triangle and initiate the long positions on the following day.

The breakout can face resistance at $400 and $420. However, we expect the virtual currency to scale both these resistances and rally towards its pattern target zone of $645 to $670.

Notwithstanding, even the most reliable patterns can fail. Therefore, our stop loss will be kept at $340. We don’t want to hang on to the trade if it falls back into the triangle. We shall raise our stops to breakeven as soon as Ethereum breaks out to new lifetime highs. From thereon, we shall trail the stops higher to protect our paper profits.

Note

The chart pattern suggests a resumption of the long-term uptrend in Ethereum. However, this will not get confirmed until the cryptocurrency breaks out and sustains above $380. Therefore, please initiate positions only on a breakout and close above the triangle. Entering presumptive trades may result in losses.

Featured image courtesy of Shutterstock. 

 

 

 

 

 

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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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