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Analysis of Stellar Lumens, Bitcoin, Ethereum, Monero, Litecoin and Ripple

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Cryptocurrencies ready for a third wave?

This is not the time and place for an in-depth lesson on Elliot Wave Theory.  There are numerous websites that offer these lessons freely, and often times the teacher is more astute than I in this art.  If you are a trader, you owe it to yourself to learn this craft, as it is a great tool that is practical and true.  Can you imagine someone calling themselves a chef, but they never learned how to bake bread?  Traders should know some things, and Elliot is one of them.

Per Elliot, all markets move in waves of 5. In a bull market there are three waves up, separated by two waves down.  The down waves are seen by traders as corrections or consolidations.  Wave 3 is typically much larger than either waves 1 or wave 5.  Elliot himself said that wave 3’s are often ‘awe-inspiring’.

I mention all this because I am of the opinion that the past few weeks most altcoins were in the early stages (wave 1) of a bull market.  Wave 1 (for many) has ended and a wave 2 has commenced.  Wave 2 was intense but short-lived.  In many cases (imho), Wave 3 has either already commenced, or will commence soon.  As insanely profitable as wave 1 was for many traders, the next wave might just be a story we will tell our grandchildren.   Stay alert…

Stellar Lumens

I note that XLM has made a series of higher highs and higher lows since it’s large selloff.  This suggests that the trend is once again up.  It’s cheap and could easily double in the near future.

Ethereum Classic

Ethereum Classic is still being cooped up by a 3rd arc.  It will get through it eventually, and we will look at it again when it does. (I see a higher high and a higher low.)

Ethereum

Ethereum turned up sharply and has penetrated the first arc  which has stopped it in the past.  It has since come back to test support.  I would not buy this yet, but wait for a close above the 2nd arc of the pair.

Litecoin

Litecoin is struggling within an arc pair.  When it breaks out it will go higher, but it may not get out soon. It could go lower first.  This is one to watch, not a buy today, imho.

Bitcoin

It is very hard to be bearish about bitcoin.  It seems like as long as the altcoins are in bullish territory there will be buyers for bitcoin.  BUT it is at an energy point and it is above the last setup, and it is very over-extended.  Be very careful if you are leveraged in this coin.

Monero

Monero is pushing it’s way through a 4th arc pair.  It is likely to get through it, but imho it is a good idea to wait for it.  It has “almost” made a higher high and a higher low, but not quite.  So watch it carefully.

Ripple

I see that Ripple, like Monero, has made a higher high and a higher low since it’s selloff.  This suggests the trend has turned up again.  The target here is 0.3.  However, we must be wary of the 3rd arc just above.

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

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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5 stars on average, based on 1 rated postsJim has an MBA from the University of Southern California. He has had a long career in both Corporate Finance and IT. Along the way he discovered that trading was a vehicle with great promise, but struggled for a long time without a mentor. After having been knocked down many times and having struggled to get back up, he had an epiphany and realized that geometry was a solution. He shares his experience here. If you do well as a result of suggestions made here, feel free to say thank you :) BTC: 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya Follow him on Twitter (@jimfred1276) or email him at jimfred1276 at gmail.




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27 Comments

27 Comments

  1. lcumiskey

    May 11, 2017 at 7:04 am

    Hi Jim,

    Where do you think Ripple will be by Xmas?

    • Jim Fredrickson

      May 11, 2017 at 10:42 pm

      My charts don’t go that far out. Suffice to say though, higher than it is now 🙂

  2. MSNP05

    May 11, 2017 at 7:43 am

    How to buy ripple in US ?

  3. Gabriel

    May 11, 2017 at 7:55 am

    Interesting to see some evidence from the charts of what many people are hoping for. Fingers crossed and let’s see!

  4. acotph

    May 11, 2017 at 9:16 am

    Hi Jim,

    How would you capitalise on the coming bitcoin correction? selling all BTC for alts?

    Thanks,
    Alex

    • Jim Fredrickson

      May 11, 2017 at 10:43 pm

      Yes, that is what I have done.

  5. nuggets

    May 11, 2017 at 9:19 am

    Stellar Lumens(XLM) same as Stellar(STR) ?

  6. thoth

    May 11, 2017 at 9:20 am

    Thanks for this, I will have to check up on this Elliot waves, Stellar has been doing my head in for months. I hope your analysis is correct.

  7. tank3rs

    May 11, 2017 at 9:51 am

    I think BTC has some way to increase first and I think all Alts will struggle until 2000USD/btc is reached.

    After this the graphs will be very interesting!

    • eko6321

      May 11, 2017 at 1:00 pm

      Yes i am totally agree your comment, since bitcoin not reached 2000usd all altcoin include ETH will struggle.

  8. eko6321

    May 11, 2017 at 1:03 pm

    Hello Jim

    I am still very confusing about ETH do you think price will down to 75~80 usd? What is the best supporting levels? Thanks

    • Jim Fredrickson

      May 11, 2017 at 10:45 pm

      ETH will go up again, in a few days I suppose, but it seems like it’s the small caps time to shine now? XRP, XLM, etc

  9. xrolo24x

    May 11, 2017 at 5:01 pm

    Thank you for the great analysis!

    • Jim Fredrickson

      May 11, 2017 at 10:46 pm

      you are very welcome

  10. unitednoobies

    May 11, 2017 at 6:54 pm

    Hello,

    My question is this:

    What time-frame do you consider as short-term to long-term investment for the cryptos mentions in this article?

    Can you also list out the price range you will be executing as a buy signal?

    Thank you,

    • Jim Fredrickson

      May 11, 2017 at 10:48 pm

      if looking at a 15 minute chart, the setup is measured in a couple days. If a 3 hour, then the setup is looking at a week or so. But it is more complicated than that. Some setups cover a longer time.

  11. Ershad

    May 11, 2017 at 8:40 pm

    Hi Jim,

    Thanks for your article, I wanted to ask should the third wave start, which alt coin do you think would be the most profitable? Also can you still see ETC reaching $15 after it passes $7.5?

    Kind regards,
    Ershad

    • Jim Fredrickson

      May 11, 2017 at 10:50 pm

      I like XLM and XRP today. We will see what tomorrow brings. ETC will not do much until it gets past resistance. There are better investments to be made in the meantime, I think.

  12. thoth

    May 11, 2017 at 11:33 pm

    Awesome woke up to a sweet little XLM trade based on this. You just payed for a years worth of subscription and some. =) be nice if you accepted BTC as payment though.

    • Jim Fredrickson

      May 12, 2017 at 3:46 am

      I’m glad you did well. The best is yet to come. 🙂
      BTC donations are accepted 🙂 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya

      • jarosatori

        May 12, 2017 at 3:09 pm

        My subscription is paid as well for some years after following advices in this article. XLM is growing, ripple as well. Great job Jim. 🙂

        • Jim Fredrickson

          May 13, 2017 at 3:11 am

          Thank you for the kind words.

  13. MSNP05

    May 13, 2017 at 2:54 am

    Is it a good time to buy ETH and LTC after the big fall ?

    • Jim Fredrickson

      May 13, 2017 at 3:11 am

      It is selling season for most markets today. Its a good day to play golf, if you are unleveraged, and can be patient….

  14. MSNP05

    May 13, 2017 at 3:19 am

    Thank you for guiding me here…also when the buy time comes I was to be ready to buy XLT…can you tell me how I can buy them as coinbase does not have that ?

  15. iamniks

    May 13, 2017 at 7:53 pm

    Hey Jim, could you share some information about the tool you use for analysis (i mean the gann squre), rules and approaches so everyone here can think of cryptos by himself when you are away 🙂 It seems XRP passed through the energy point without hitting 0.3, am I right?

    • Jim Fredrickson

      May 13, 2017 at 10:11 pm

      My primary tool is the gann square developed by Eduardo Altman of gunner24.com. He has a free ‘howto’ on his site. It is a good place to start…

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Analysis

Italy Spooks markets Again as Stocks Remain Under Pressure

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European stocks Led the way lower today despite a bullish start in Asia, as equities gave back their gains when Daimler published a surprising profit warning, which was deeply affected by the recent trade war developments, reigniting fears of a tariff-driven downturn in global trade.

DAX, 4-Hour Chart Analysis

The Old Continent got into more trouble later on, when two anti-EU officials were named in Italy, resurrecting fears of a clash between the systematically crucial country and the core of the Eurozone. Italian yields rose in European trading, and although they are still shy of the levels hit during the May scare, the periphery could be in trouble as the ECB pledged to exit the market by the end of the year.

Nasdaq 100 Futures, 4-Hour Chart Analysis

The main European indices were smashed lower during the session, with the DAX hitting a two month low, still being very weak relatively speaking compared to its US peers. US stocks sold off heavily following the opening bell and they failed to recover, unlike two days ago, and the major benchmarks traded well below yesterday’s levels just before the close.

The Nasdaq and the Russell 2000 lost some of their recent mojo, pulling back heavily of the all-time highs during the day. All in all, the risk off shift continues to dominate across the board, as we expected and we remain negative on risk assets here, especially regarding emerging markets, even as the Dollar’s rally could be over for a while.

Dollar Pulls back as Pound Surges

USD/CAD, 4-Hour Chart Analysis

The Dollar took a beating as the Philly Fed Index came in much worse than expected, and as the Bank of England sent hawkish signals, pushing the Pound and the Euro higher. The central bank left its benchmark rate unchanged at 0.5%, but a rate hike this year got much closer, with a key member of the bank voicing inflationary concerns.

The Greenback fell more than what the events would imply, so a larger scale consolidation could have already started in the currency following the recent gains and the marginal new high yesterday. With the EUR/USD pair nearing the 1.1450-1.15 support zone, the USD/CAD hitting 1.33 and the AUD/USD touching 0.7350, a meaningful counter-trend move would be timely in the surging reserve currency.

WTI Crude Oil, 4-Hour Chart Analysis

Gold continued to drift lower before the Dollar’s reversal and it hit $1262 for the first time since lat December before bouncing back above the $1270 level in late trading. Crude oil also fell sharply in early trading, and the WTI contract traded with a $64 handle before rallying back to $66 per barrel.

The OPEC meeting, which is expected to result in a supply increase by the cartel made the crucial commodity very volatile in recent days, but we expect the bearish trend to continue, with a likely dip to the $60 level in the coming weeks.

Featured image from 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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4.6 stars on average, based on 279 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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Analysis

Crypto Update: Coins Drift Sideways as Trading Activity Plunges

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Liquidity dried up in the cryptocurrency segment in recent days, as trading volumes have been declining progressively, while the major coins got stuck in tight ranges. Only a few coins show signs of activity, and the bearish short-term patterns continue to dominate the market. With a group of currencies, namely Litecoin, Monero, Dash, and Bitcoin itself clearly dragging the segment down, the short-term trend will likely continue, as the previous leaders are now showing strength either.

While all of the top digital currencies are showing some gains today, and the total value of the market edged close to $290 billion, major resistance levels are still towering above. The fact that the effect of the Bithumb hack faded away quickly is a positive here, but until signs of bullish momentum and a clear leadership forming, the short-term outlook remains bearish.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to trade near the $6750 level, edging ever closer to the declining short-term trendline, in a bearish consolidation pattern. Bulls would need a sustained move above $7000 to negate the declining trend, but for now at least a test of last week’s lows is likely with a possible move towards the key long-term zone between $5850 and $6000.  The short-term zone around $6350 level provides support, while further resistance is ahead near $7350.

Ethereum Nears Trendline as ETC Attempts Breakout

ETH/USD, 4-Hour Chart Analysis

Ethereum has been among the strongest coins in the last few days again, and coupled with its long-term relative strength, the second largest coin is still the best candidate to lead a recovery. That said, the coin still faces strong resistance between $555 and $575, and bullish momentum is suspiciously weak. Primary support is found at $500 with further zones near $450 and $400.

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic has been positively diverging compared to the rest of the market, together with Binance Coin, and to a lesser extent Tron ever since its inclusion to Coinbase, and the coin moved above the key $16 resistance yesterday in late trading.

While ETC is slightly overbought from a short-term perspective, a consolidation above $16 and a subsequent move higher could confirm a trend change. For now, the short-term trend signal is only neutral, and traders should remain cautious given the broad downtrend in the segment

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 (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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4.6 stars on average, based on 279 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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Altcoins

Treading the Floods: Cryptocurrency Prices Stable Following Bithumb Attack 

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Cryptocurrencies emerged unscathed Wednesday following yet another security breach of a South Korean exchange, as the market continued to favor a corrective rally for bitcoin and the major altcoins.

Crypto Prices Hold Steady

Bitcoin fell by as much as $200 Wednesday on news of a cyber attack targeting South Korea’s Bithumb exchange. However, the coin quickly recovered and now sits just shy of $6,800, according to data provider CoinMarketCap. Prices peaked at $6,821.56 at 12:34 UTC.

Compared with 24 hours ago, bitcoin’s per-coin value was virtually unchanged.

The ten biggest altcoins by market cap exhibited the same pattern, with prices treading water compared with Tuesday afternoon. The total cryptocurrency market was valued above $290 billion, up from an earlier low of around $282 billion.

Bitcoin and the major altcoins have more or less retained their bullish bias, which suggests that a continuation of the upward trend is likely. Since bottoming last week, coins have rebounded $26 billion.

Bithumb Attack: What We Know

Hackers made off with roughly $31 million in stolen cryptocurrency on Wednesday as Bithumb suffered its third cyber breach in 12 months. The attackers reportedly targeted users’ holdings of XRP, the third-largest cryptocurrency by market cap, by running a series of unauthorized access attempts.

Bithumb was unable to prevent the attack despite spending upwards of 10 billion won ($9 million) on security enhancements. This includes complying with new guidelines for financial institutions requiring 5% of company staff be made up of IT specialists. Bithumb has reportedly exceeded that quota by a wide margin.

The Seoul-based exchange confirmed that it had migrated outstanding crypto balances to cold storage and said it will fully refund affected users. Transactions on the exchange remain suspended for now.

Although news of the attack hit the airwaves on Wednesday, some analysts believe the theft occurred several days earlier as part of Bithumb’s data upgrade. However, the exact cause of the breach remains unclear.

Goldman Sachs Weighs Crypto Trading as an Option

U.S. multinational investment bank Goldman Sachs is considering taking a bigger dive into cryptocurrency by launching a full-scale trading operation, according to COO David Solomon.

“We are clearing some futures around bitcoin, talking about doing some other activities there, but it’s going very cautiously,” Solomon said during an interview in China, as reported by CCN. “We’re listening to our clients and trying to help our clients as they’re exploring those things too.”

Currently, the Wall Street investment giant is clearing bitcoin futures contracts. It has also announced plans to introduce a new bitcoin trading operation, which includes using its own money to trade with clients in a variety of contracts linked to bitcoin.

Institutional traders are awaiting the arrival of custodial services dedicated to cryptocurrency before taking the full plunge into digital assets. To that effect, the San Francisco-based  Coinbase exchange is leading the charge by announcing a new line of crypto custodial services to unlock up to $10 billion in institutional 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.

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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4.6 stars on average, based on 462 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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