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Analysis: Cryptocurrencies Prepare for the Next Move

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The major coins are in a low-volatility consolidation phase, as they have been trading all weekend long. The strong rally of last week reached short-term overbought territory, as Bitcoin got close to its all-time high near the $3000 level. The most valuable coin is still showing strength holding well above primary resistance, which is currently found at $2650. As the long-term picture just reached neutral stance after the one-month long correction, at least a test of the prior high is very likely, with the currency still following our projection from June.

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BTC/USD, Daily Chart Analysis

The other major coins are also lower today, but they are holding on to most of their recent gains although Ethereum, Monero, Litecoin, Ripple are still in a downtrend that has been dominating trading since June. Dash remains the strongest major besides Bitcoin, while Liteocin and Ethereum Classic are still in different trend phases compared to most of the other majors. As several buying opportunities are developing in the current correction, let’s see how the majors are looking before at the beginning of the week.

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Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum is in a volatility compression pattern below the key trendline after the 80% rally off the lows last week. The ETH token has lagged BTC in the second half of the week, but it’s holding up above support, despite the lack of short-term bullish momentum. The short-term picture is still neutral, but the relative strength in small caps is promising, and a break above the trendline is likely in the coming period.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin is trading right at the$ 44 level after exiting the short-term declining trend last week. Volume is low in the coin and as more sideways price action is likely before a move towards the $50 level and the long-term range projection target near the $58-$60 zone. Support is found at $40 and at $38, and LTC is still among the strongest major coins regarding technicals, and traders should be looking for buying opportunities.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is consolidating below the $200 level, but the break-out attempts have failed so far, while the coin is holding above the $190 level. Both the short- and long-term picture is encouraging, and the prior highs are close, with our long-term target still found just above $250.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple showed strength during the weekend, breaching the $0.20 level and getting close, and getting close to the crucial support/resistance zone near $0.22, and the declining long-term trendline that is also at $0.22 right now.  A break-out above the trendline would signal a key trend change after the two-month long correction.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

ETC is hovering around the $16 level that after the quiet weekend, still below the key $18 resistance, with very low trading volumes. Primary support is found around the $14 level, and with the long-term momentum showing oversold readings, investors could still add to their positions during short-term dips.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero remained strong during the weekend and rallied above the dominant declining trendline before entering a short-term correction. The coin is still facing the key $46 resistance level, after forming a long-term base between $32 and $37, but now both the short- and long-term

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 224 rated postsTrader 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.




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2 Comments

2 Comments

  1. Chris G

    July 24, 2017 at 3:53 pm

    good call on Dash, lets see if it tests 220 soon …

  2. Chris G

    July 24, 2017 at 4:02 pm

    I considered buy DGB like 3-days ago, d’oh

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Analysis

More Chance to Go Up for Litecoin

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Litecoin short term outlook is quite positive, while in a longer term, it’s somewhat mixed. Shortly, the digital coin may face a very strong resistance at $141, being currently priced at $140. As Dmitriy Gurkovskiy, Chief Analyst at RoboForex, says, Litecoin already tried to test this level earlier this week, but did not succeed.

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In the mid-term Litecoin is trying to break out the current range, and in case it finally manages to break out $141 and stay above, it may go up to $168. Before reaching this target, however, another downtrend may be formed, with Litecoin plunging to the support at $114 again. If the bears succeed in breaking out this level, too, another sell-off target will be at $87.

Current outlook, however, is mostly positive, with the key support being at $114 and the key resistances at $141 and $168. The MACD on D1 is in its negatives, but is going up, issuing a buy signal, while the Stochastic is in the positive area and confirms its buy signal, already issued some time ago.

Fundamentally, Litecoin has got much support this week. The market started buying out the coin once the news on the token being listed at Korbit appeared. As the recent reports say, the crypto started being traded on Korbit yesterday, while withdrawal should be available starting today, Apr 19. This is important for Litecoin: first, Korbit is one of the oldest and most reliable exchanges in Korea; second, as we have already stated a few times, if the crypto becomes widespread across multiple exchanges, its liquidity gets boosted, while the accessibility simplifies the transaction processes.

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Korbit decided to hold a contest, with the top 6 LTC/KRW traders getting prizes in Litecoin (the winner gets LTC 50, the runner-up will walk away with LTC 25). Meanwhile, Litecoin being available on Korbit also helped the crypto to rise on Bitfinex.

Currently, Litecoin is one of the most volatile currencies, mostly because of it always being in the news, which does good to its promotion. As such, it was announced a few days ago that LTC would be used as a payment method, and TenX already started developing a prepaid card for that purpose.

By: Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Disclaimer
Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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I have two degrees in Social Psychology and Economy. After graduation I worked as the Head of the Laboratory of Technical and Fundamental Analysis of Financial Markets at The International Institute for Applied Systems Analysis. The experience and skills he gained helped me to realize my potential as an analyst-trader and a portfolio manager in an investment company. At the moment I'm a financial expert, writing for various financial media sources and a Chief Analyst at RoboMarkets.




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Analysis

Bitcoin Prices and Whale Sightings: Evaluating the Latest Trends

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Bitcoin’s value has skyrocketed 20% over the past eight days, but some say the upward trajectory isn’t as linear as it should be given the length of the most recent correction. The market’s sudden gyrations have left us with only one explanation: the bitcoin whales are back.

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Whale Spotting

It has been reported that the so-called bitcoin whales (those who hold oversized positions in the digital asset) dumped $100 million worth of BTC in less than 24 hours. For example, the anonymous balance of wallet 3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r declined by 6,500 BTC on Tuesday, which is equivalent to $50 million. As a result, bitcoin fell more than $200 on the major exchanges in just a few minutes.

Just one day earlier, bitcoin’s third-biggest wallet shed 6,600 units of the virtual currency at an average price of around $8,026.

Interestingly, a whale may have been responsible for the initial spike in BTC just one week ago. As we reported, a large order on Bitfinex triggered the initial spike in BTC as prices crossed $7,000 on the exchange. For the next two days, bitcoin would surge double-digits to breach $8,000 for the first time since late March.

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Investors are also keeping tabs on a high-profile whale based out of Tokyo, Japan. Nobuaki Kobayashi is in the process of liquidating billions of dollars on behalf of Mt Gox creditors. At last check, the trustee had sold about $400 million in bitcoin for an average sales price of $10,105. He’s expected to offload another $1.9 billion.

Speculation Grows

While advocates of bitcoin’s long-term value have barely flinched amid the latest downturn, speculators all but disappeared from the market. A simple analysis of Google search trends also reveals that laypeople have been losing interest in digital currencies since early February.

All that could be changing.

Cryptocurrencies have added nearly $100 billion to their market cap over the past week, with bitcoin doing much of the work. This appears to have compelled bitcoin’s large owners to sell their assets for reasons that are not yet unclear.

Of course, the multiple selloffs could just be coincidence or a bet that future prices will fall again. In the eyes of leading analysts, the latter appears to be less likely.

The head of Pantera Capital, who rarely predicts bitcoin’s future and is thus never wrong when he does, recently told clients that the digital currency has already bottom. Appearing on CNBC’s Fast Money, Dan Morehead said bitcoin’s bear market was just about over and that prices would continue rising from here on.

That said, choppy trading for bitcoin is hardly unusual and has come to be expected in a market that still lacks maturity. Whales or not, recent moves have made it harder to gauge the strength of the recovery.

That’s the message Thomas Lee of Fundstrat Global Advisors recently shared, according to Bloomberg.

“I think it feels off right now because, you know, we’ve been on a down trend since December, and now, even though the volatility hasn’t changed much, it’s hard to tell if bitcoin is trying to stage a recovery or if it’s continuing its down trend,” he said.

At the time of writing, bitcoin was valued at $8,175, having gained 3% over the past 24 hours.

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. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 332 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Recommendations

Trade Recommendation: The Travelers Group

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Technical Overview

  • On January 23, The Travelers Company’s stock jumped nearly 5% after releasing their 4Q17 earnings (violet arrow in Figure 1). Then, during the “Feb Correction”, the stock pulled back to wipe out the entire gain, and more, over a couple of trading sessions.
  • Since then, the stock has been trading within a 7.5% trading range ($133 – $143.50 trading range – orange horizontal lines). In comparison, the broader markets have been swinging by more than 10% after the Feb 9 low was set.
  • More recently, over the past month, the stock has traded within an even tighter trading range, finding support at $135 and resistance at $140. On one hand, a key resistance continues to push prices lower upon every retest (red trendline and arrows). On the other hand, the stock has bounced off of a 6-month support over half-a-dozen times (green trendline and arrows).
  • The stock has been a laggard over the last 8 trading sessions, while markets recovered significantly and broke above key resistance levels.

Figure 1. TRV Daily Chart

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Implications

  • The stock’s tight trading range has resulted in options selling at below 20% IV for some expiries.
  • A break below the 6-month support is expected to result in a swift leg down, especially if the $133 level gets broken immediately after that.
  • A break above the red trendline likely to have the stock retest $140.

Outlook

  • Neutral with a bearish bias while the stock is trading between the red and green trendlines.
  • Bearish if the stock breaks the green trendline (currently at nearly $136).
  • If the stock breaks the red trendline, outlook will remain neutral, however with a bullish bias, as the stock will likely move higher by at least $3-$4 to retest $140.

Trading Recommendation

  • Buy the May, strike 135 put for roughly $2.40 – $2.60 or short the stock once the green trendline is broken. Use a close below $136 for a confirmation.  At the time of writing, at 11:20 am EST on April 18, the put is trading at $2.40 and the stock at $136.05.
  • Target: Cover stock/sell put when the stock reaches $130.
  • Stop: Cover stock/sell put if the stock closes above the red trendline (currently at $137.95 and falling by roughly 25 cents/day).

Benefit of Recommended Trade

  • A play on both direction and volatility (in the case of the put purchase).
  • A sloping-down resistance used as a stop, resulting in an improving risk-reward profile of the trade as time goes by.

Disclosure: Have a small put position and may buy more contracts based on the trading recommendation’s guidelines.

Featured image courtesy of Shutterstock. 

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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