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Analysis: Ripple and NEO Soar as Ethereum Classic Breaks Out

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The influx of capital into altcoins continues in earnest, as Ripple added to yesterday’s lofty gains, and it catapulted back to the third place regarding market capitalization. The coin took over Bitcoin Cash after almost doubling in price in a couple of days. XRP is now just below the $0.30 level, although the all-time high of the currency is still 50% higher than the current price. Investors could reduce positions near the resistance zone just above the current level, as a correction back towards $0.25 is likely in the coming days.

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XRP/USDT, 4-Hour Chart Analysis

NEO and ETC also moved out their correction patterns, and now all of the major coins are back in uptrends after the summer bear market. The total value of the cryptocurrency market reached $150 billion as Bitcoin also moved higher after Monday’s spike lower.  The rest of the most valuable coins are also in the green, as the broad rally continues in the segment. While some of the majors are already in overbought territory, there are still opportunities in the sector, as some of the coins are still in the early stages in trend. Let’s see how the technicals are shaping up today.

Bitcoin

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BTC/USD, 4-Hour Chart Analysis

Bitcoin surged back to its prior short-term rising trend channel as buyers stepped in after the steep drop yesterday. The coin remains overbought regarding the long-term picture, and investors should still wait with new positions, while traders could play the volatile swings in both directions. Key support is found at the $4000 price level, and below that near $3800, $3500, and $3150.

Ethereum

ETH/USD, 4-Hour Chart Analysis

ETH is also up today after the dip on the first day of the week, but it remains below Sunday’s high, despite trading within the short-term uptrend. The $330 level remains in focus, with strong support near $300 and $285. Strong resistance is ahead at $380, and we still expect a test of that level, and possibly the all-time high of the token near $400.

Litecoin

LTC/USD, 4-Hour Chart Analysis

LTC continues to trade just above the $46 level, still within a narrow range and a broader triangle pattern. We still expect a break-out in the coming period, with a move towards $50 and the all-time highs near $56. Short-term traders could still wait for a break-out of the triangle before entering into new positions, but the technical picture remains bullish, in all time frames.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is still trading just below the $300 level, inside the short-term uptrend, after the huge weekend move. The currency might be ready for another push higher, although the long-term picture is already overbought, but short-term traders could still enter new positions here. Support levels are found near $266, between $220 and $230 and at $200.

 

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic finally moved out of the previously dominant downtrend today and it is testing the $16 resistance. Should the break-out hold its ground, the next target of the move is at $18, with further resistance levels found at $20 and near $22. Long-term support is found between $13.50 and $14.50. The long-term picture momentum indicators are still in neutral territory, leaving more room higher for the rally.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero breached the $100 level after pushing to a marginal new high following Monday’s break-out. The coin is now back near the prior range projection target at $91, and with the long-term picture turning overbought, investors shouldn’t open new positions here. The coin is also overbought short-term, pointing to a correction in the coming days.

NEM

NEM/BTC, 4-Hour Chart Analysis

NEM is still stuck in the volatile trading range that developed after the coin’s break-out. The coin is hovering around the 0.000065 level with strong support levels near 0.0000575 and 0.000048. Resistance is ahead at 0.000075, and we still expect a move back towards the recent high at 0.00009 as the Bitcoin correction unfolds.

NEO

NEO/USDT, 4-Hour Chart Analysis

The coin moved out of its declining short-term trend after a 50% correction, and rallied through the resistance zone around the $40 level quickly. Neo could be ready to test the prior high soon, but it faces resistant before that near $47.50, which could trigger a short-term correction.

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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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