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Analysis

Analysis: The Last Hurray in Bitcoin Before the Hangover?

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The cryptocurrency market might have experienced a classic blow-off top today, with the help of the historic rally in Bitcoin that carried it past the $10,000 (and the $11,000) level before turning sharply lower during the second half of the session.

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We warned of a nearby top in recent days, and altcoins also showed signs of overheating with almost all of the majors reaching overbought territory on all time-frames. BTC has no major support levels until $8200, and a quick move to that zone would be normal after the monster rally. Further support levels are still found at $7700, $7000, and $6700, and a move towards the previous major break-out level at $5000 is still not out of the question.

BTC/USD, 4-Hour Chart Analysis

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Ethereum Classic has been one of the leaders of the surge, until getting severely overbought on all time-frames yesterday. The coin already plunged back to the first major support zone at the prior high near $23, and we expect further corrective price action, given the stretched long-term picture, with major support levels at $18, $16, and $14.50.

ETC/USD, 4-Hour Chart Analysis

All of the majors got caught in the wave of selling, and the state of the market is changing very quickly, but we advise traders to wait with entering new positions even during the likely bounces in the coming days, as the overbought readings should be cleared before a durable rally. Let’s see the crucial short-term charts in detail.

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum almost reached $500 amid the early rally, but it fell significantly together with BTC and it’s already looking to test the $400 level after the initial break-down. We expect the coin to outperform Bitcoin in a correction, but the test of the $380 and $350 levels is possible before another move above the $500 mark.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin breached the prior all-time high and the $100 level as we expected before turning sharply lower together with the broader market. Although, the coin didn’t reach the extreme overbought levels of Bitcoin and some of the altcoins, but we still expect it trade in a volatile manner in the coming period. Key support levels at are found at $82.50, $75, and $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash spiked above $750 during the initial rally today, but the coin quickly fell back to the range of the previous days. That said, the short-term uptrend is still intact, and the currency remains one of the strongest majors regarding the long-term picture. We still advise traders and investors to wait for a deeper correction before entering new positions, with support levels at $500, $470, and near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple crawled up to $0.28 in the bullish sentiment but the broad selling pressure pushed the coins sharply lower, despite the more encouraging long-term picture. The coin remains on a long-term buy signal, but volatility is expected to pick up amid the correction in the segment with further support levels found at $0.2250, near $0.20, and at $0.18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero hit our final target for the current leg higher near $200 before falling back to the $160 level that has been in focus in the previous week. The coin remains in a short-term uptrend but the long-term picture is now severely overbought and we expect a deeper correction in the coming weeks, with support further support at $150 and $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO didn’t follow the other majors higher in the past few days, showing considerable relative weakness after the bounce to the $40 level, but the long-term picture remains encouraging. Strong support levels are found at $30 and $27 with primary resistance at $34, and targets at $40 and $50.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA surged past the previous all-time high at $1.1 amid the euphoric sentiment, but the coin remains extremely stretched regarding the long-term momentum, and now the short-term risk/reward ratio is also unfavorable. Investors and traders should now wait for the next deeper correction before entering new positions. Support below $1.1 is found at $1, $0.75, $0.64, and $0.56.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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2 Comments

2 Comments

  1. Chris G

    November 30, 2017 at 1:57 am

    thanks Mate – managed to play this cycle better than the last. Now to wait things out …

  2. Lakshmana

    November 30, 2017 at 4:45 pm

    Plus one… I’m learning a lot form you guys. Especially you, Mate. Thanks.

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Analysis

Technical Analysis: Litecoin Continues Surge as Bitcoin Tests Highs

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With the crypto world being focused on the historical futures launch, the major coins all enjoyed buying following a hectic weekend, and a volatile week as a whole. BTC itself got another boost from the widespread publicity and the volatile correction of the recent days ended, with the most valuable coin bouncing back towards its all-time high.

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While the long-term picture remains severely overbought, the short-term picture is not stretched and further gains are possible even amid the elevated correction risk. That said, investors should wait for a more favorable entry point to ad dot their holdings, while traders should control position sizes in the light of the long-term setup. Major support levels are now near $13,000, $11,300, and $10,000, with stronger levels still at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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The major altcoins are all up today, but only Monero and Litecoin are still within short-term uptrends, and the segment as a whole is still dangerously overextended, and a deeper correction is very likely in the coming weeks. LTC continued its recent break-out, getting close to the $200 level, and joining the extremely overbought group regarding the long-term momentum, and triggering a long-term sell signal in our trend model. Key support levels are found $100 at $75 and $64, with a weaker primary level at $125.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Long-Term Analysis of the Silver Market

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Silver

The silver market has once again caught investors’ interest as the price is nearing areas not seen since late 2008.

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2017 started at a low point for silver, and it seems it will end the year that way as well, meaning investors who bought at the beginning of the year haven’t suffered nor gained much.

This doesn’t mean, however, that the price hasn’t moved during the year. After the low start of the year, silver quickly tacked on about 18% to a top of $17.50 per ounce.

In terms of fundamentals in the silver market, things look a bit complicated for 2018. There are multiple forces pulling in different directions for the price of silver going forward:

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Positives

  • A sharp stock market correction can be expected to occur some time in 2018. Most likely, this will happen sooner rather than later. Stock market crashes always trigger a flight to safety, meaning gold, silver, and quite possibly bitcoin, can benefit.
  • We are seeing signs that inflation may be starting to rise again, although this is not confirmed yet. Rising inflation is always good for precious metals.
  • If the US federal budget deficit widens as a result of the new tax reform, the US dollar may suffer as a consequence. Goldman Sachs put out a note to investors in November 2017 saying that the US debt is “on track” to reach an “unsustainable” level in coming years. Fed Chair Janet Yellen has also said about the US debt that it is “the type of thing that should keep people awake at night.” Rising debt levels creates uncertainty about the economy, which is generally good for gold and silver.

Negatives

  • Central banks around the world seem committed to raise interest rates in 2018. Rising interest rates are bad for precious metals because it would make it more attractive to put money in the bank.
  • The cryptocurrency bull market is on track to continue, diverting attention and capital away from precious metals as a traditional store of value. However, this one is uncertain, as it may also be considered a positive in the way that the rise of cryptocurrencies brings the inflationary and unsustainable nature of fiat currencies into focus.
  • The US dollar may have hit a bottom in 2017 and trade higher compared to other major fiat currencies going into 2018. A stronger dollar is always bad for precious metals, which are priced in dollars.

Silver chart

When looking at the chart, we can see that silver is back down to were it started the year, which coincides with a major support area where it has turned several times in the past few years.

From a technical perspective, silver has been trading in a triangle pattern on the longer-term weekly chart, with the price now trading very near the lower end of the triangle, adding confluence to our bias that silver will trade up from here.

Silver failed to live up to our prediction from early 2017, and is now even trading well below the level from that time.

A low price by any measure combined with two major technical support levels adds confidence to our trade and makes silver a low risk and potentially high reward trade for 2018.

Depending on your own strategy and investment style, you may want to wait for the price to break out from the current triangle pattern it has been trading in for the past year and a half. You would then give up some of the potential return for an even safer trade. After that, major resistance is found around $17.50 and $18, with lots of upside potential if we can finally break through those levels.

Featured image from Pixabay.

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Analysis

Long-Term Cryptocurrency Analysis: Look Out Below?

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After last week’s observation that a major top is in or near in the segment, the Bitcoin surge continued for almost a week, with Thursday’s wild session taking the coin as high as $19,000 (the article uses Bitstamp prices) on some exchanges. While the currency already pulled back by more than 20% the long-term picture is still extremely overbought and a much deeper correction is likely in the coming weeks.

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BTC spiked below $13,000 today, violating the primary weak support at $13,300, with further levels now at $11,300, $10,000 and $9000, but stronger support only found at $8200 and $7700. Next week’s futures launch could cause another jump in trading activity, and volatility is expected to remain very high amid the likely correction.

BTC/USD, Daily Chart Analysis

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While not all altcoins participated in the, supposedly, last part of the rally, IOTA, Monero, and towards the end of the week Litecoin, also stretched above all conventional targets with IOTA also turning exponential after a deal with Microsoft. The coin exploded by more than 350% before entering an initial sharp correction, breaking the steepest short-term uptrend. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.

IOT/USD, Daily Chart Analysis

Let’s see how the long-term charts of the other altcoins look after the crazy week.

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