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Analysis: Ethereum is on a run, Bitcoin surpasses $1600 (+Ripple & Litecoin)

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Bitcoin

Bitcoin has surpassed our target of $1500 a few days earlier than I anticipated. While I think it is clear that higher prices, maybe much higher prices, are in store for this asset in the months to come, it is likely a good time to take profits if you are a short-term trader.  I will go out on a limb here and suggest that this coin is ripe for a significant correction – soon.

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There is clearly A LOT of new money coming into cryptocoins of all flavors these days. This cryptocoin bull market is far from over, I suspect. But still, this vertical ascent is unsustainable. More importantly, we have hit a 5th arc, and it was hit exactly, within 8 hours, of a 270 degree (3×90) movement from the low of 8/2/2016. Here is an 8 hour chart:

Ripple

XRP is on a tear and should be on your radar screen.  It has made a new ATH and broke through longer-term resistance to get there.  This coin could triple from here.  My long term charts suggest the possibility of .25 by mid-summer.  However, I see that there was a smaller setup from the April 4 low I had overlooked.  Per that setup, pricetime hit a 5th arc last night while I was sleeping, and corrected sharply.  It has recovered somewhat, but has not yet re-tested that arc.  I believe it will get through it and move much higher, but I am not omniscient, so we will have to wait and see. Here is the 3 hour chart:

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Litecoin

Litecoin has done very nicely in the past couple days.  It hit our target of $25 last night.  As in the case of XRP, I tend to think significantly higher prices are in store for this asset, if it can get through that arc.  It is rising to re-test the arc as these words are typed   Time will tell.  Here is a 15 minute chart:

Ethereum

Ethereum recovered from it’s correction and is at this moment pushing through the 2nd arc of a 3rd pair.  I have little doubt that yet  another buy signal will be issued soon.  My target is a figure that seemed ridiculous just a few short weeks ago.  I note now that the 5th arc of this setup intersects the 1×1 angle at $150.  I suspect we will see that number within just a few weeks.  Here is a 3 hour chart:

Where is all this new money coming from that is pouring into the cryptocoins?  I’m not sure.  Maybe institutional traders, government players, Joe Sixpack who finally woke up and realized that a small fortune was being made by his 21 year old nephew?  Maybe all three.  It doesn’t matter.  This will likely last at least several more weeks, if not through the summer or beyond.  Stay sharp.  Markets like this don’t happen every day, though it feels right now like it will never end.

Remember:  The author is a trader who is subject to all manner of error in judgement.  Do your own research, and be prepared to take full responsibility for your own trades.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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8 Comments

8 Comments

  1. jedadoo

    May 5, 2017 at 7:49 am

    Thanks for the update! I was holding dash for the next jump but just isn’t happening…

  2. tadej

    May 5, 2017 at 7:53 am

    Jim,
    Out of the last three where will you put your money in ? Is this XRP growth sustainable, last time we had a really sharp correction. Where do you recommend to exit on XPR (short term).

    Thanks

    • Jim Fredrickson

      May 5, 2017 at 11:19 pm

      A correction was overdue, but i remain bullish on XRP. i’m expecting .25 is coming. we will see.

  3. excesstomcat1

    May 5, 2017 at 10:26 am

    Hey Jim, great article. Could maybe explain some more about xrp in the future. I believe it will go up as you said though I am worried about sharp corrections. Could you maybe explain why this happens and what to look for so those who are invested in it can be on the look-out for sell signals?

    • Jim Fredrickson

      May 5, 2017 at 11:22 pm

      Corrections occur in large part because early buyers have made a ton of money (on paper) but need to sell in order to see the profits ‘made real’. So after a huge run like this, those who are sitting on a huge gain are very nervous that their profits will disappear, and want to be the first to sell. There is also the issue of leverage and margin calls, but that’s a different fear.

  4. moises_benzaquen

    May 5, 2017 at 10:59 am

    Jim ! where do you see or target LTC in the coming days ? (knowing segwit is almost active).

    Thank you !

    • Jim Fredrickson

      May 5, 2017 at 11:24 pm

      my current target is $30, then $36 if 1st target is exceeded.

  5. lcumiskey

    May 9, 2017 at 5:07 am

    Jim! What’s your target for XRP by Christmas this year?

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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