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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 2 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

3 Things You Need to Know About the Market Today

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1, Pound Resumes Rally on Strong Employment Report

GBP/USD, 4-Hour Chart Analysis

The Great British Pound reacted well to the likely delay of the Brexit process in recent weeks, and today the currency defied the risk-off shift and rallied back towards the 1.30 level against the USD. The better than expected British Employment Report, which showed the strongest wage growth in a decade, outpacing inflation despite the long-term weakness of the Pound.

While the currency gained ground, British equities followed the global trends and finished lower, threatening with a resumption of the broader declining trend. All eyes are still on the Brexit saga, but should the extended deadline scenario prevail, the short-term bullish trend could continue in the pair, even as traders should keep the considerable event risk in mind when trading the Pound-related pairs.

2, Oil and Stocks Slide as Risk Assets Suffer amid Renewed Trade Worries

Johnson & Johnson, 4-Hour Chart Analysis

While the losses in risk assets have been limited yesterday, due, in part at least, to the US bank holiday, today, we saw heavy selling across the board. Oil ran into a wall near the resistance zone that we pointed out yesterday, and the crucial commodity fell back to a $52 per barrel handle with regards to the WTI contract.

Stocks got hit hard on reports that this week’s round of meetings between the senior US and Chinese officials has been canceled, with the issues of Intellectual Property and deeper Chinese economic reforms being behind the setback. We argued several times that these ‘soft’, hard to control issues are unlikely to be resolved anytime soon, even in the case of a formal agreement, so while we expect wild swings on trade-related headlines, the structural, credit-related issues will drive Chinese assets.

3, Johnson & Johnson Misses on Guidance Despite Earnings Beat

WTI Crude Oil, 4-Hour Chart Analysis

The pressure on stocks intensified following Johnson & Johnson’s (JNJ) earnings report, with the 2019 guidance disappointing investors. While the previous quarter was a positive surprise from the healthcare giant, as far as the bottom line is concerned, the outlook for the consumer segment cast a shadow on the broader market even as the company’s core Pharmaceutical business continues to shine.

Shares of the company are down by around 2%, and after the closing bell, IBM’s (IBM) report will be in focus, as the struggling tech giant will also report earnings. IBM has seen its share price cut in half as its growth stalled in recent years, and even a small positive surprise could propel the stock higher following the market-wide decline of the recent months, but it’s unlikely that the broader downtrend will be broken anytime soon.

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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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4.7 stars on average, based on 445 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

Goldman Sachs: Even a $7.50B Fine Can’t Take Them Down

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

Last week, Goldman Sachs Group Inc. (NYSE: GS) published its Q4 earnings report, in which the main financial indicators exceeded all analysts’ expectations.

The net profit amounted to $2.54B, well above expectations of $1.78B; the revenue reached $8.12B compared with a forecast of $7.5B; finally, the net interest income rose to $898M versus an expected $758M.

The chart shows that Goldman Sachs’ revenues always exceeded the forecast figures. In 2017, the forecasts were quite conservative, with the actual results not much different. In 2018 this bias was already smaller. Based on the data from the chart, one can conclude that 2018 was not the best year for the bank, with revenues falling as predicted, which led to a share price fall, too. Over 2018, the stock lost almost 45% of its value.

Early in the year, the stock was still near the historical highs; then, after the Q1 report release, the price went down, as the report showed worse figures than expected.

Now, the price is increasing sharply, bouncing off its lows. Investors tend to first pay attention to the expected figures, especially if the company has been operating in the market for a long time. In such situations, news has a short-term impact on the price, as this has may times stood the test of time. Goldman Sachs was no exception.

The news on the Malaysian scandal, which broke out in 2015, is still here to stay. The Malaysian authorities accuse bank representatives of bribing officials to get an order for bond placement in 2012-2013. The revenues from those bonds, i.e. $6.5B, were just taken away, without any hint on using them for the local investment. In response, Goldman Sachs pointed out that the bonds were placed for the purpose of raising money for Malaysia, but instead part of the funds was stolen by members of the Malaysian government. As it turned out, the then Prime Minister of Malaysia, Najib Razak, was indeed found to have $681M in his accounts. This was a dead end, however, and indeed officials were very unlikely to punish themselves. Now, when Razak lost the election, the new government launched an anti-corruption investigation and Najib Razak was accused of money laundering, while Goldman Sachs was also charged.

In mid 2015, the stock actually declined, which lasted about a year. Overall, the fall was 37%, but then Goldman was out of the Malaysian scandal and media spoke about corruption in the Asian country. Meanwhile, in Malaysia, people knew very few things, as the media was tightly controlled by the government, and those who dared to report it were immediately closed. As such, The Insider, a Malaysian media, was closed after the very first publication of the article hinting on government corruption.

Therefore, linking the stock decline to the scandal does not work. However, if you follow the chart of the company’s revenues, you’ll understand what really happened.

The chart shows that the revenue forecast for the second quarter of 2015 was already declining, and when the Q2 real income was less than the previous one, both the stock and the prediction went down. Thus, the price directly responded to the decline in forecast indicators for revenues, and the news factor here had virtually no effect on the stock.

In 2016, the stock started recovering with the expectations also going higher. Therefore, the current growth in the value of the stock is directly related to the expectations of the growth of Goldman Sachs earnings in Q1 2019.

As for the possible fine, David Solomon, the Goldman Sachs CEO, decided to play it safe: the bank has already started accumulating money for it.

Technically, on W1 the stock is quite weak, being under 200-day moving average, but in spite of this, there’s still an uptrend, as the MA is going up.

When the stock fell down to its lows at $160, the volume increased drastically, which is one of the most evident signs of a reversal. This will be further confirmed once the 200-day MA gets broken out and the price stays above. But since the price went up sharply from its lows and increased for 4 weeks in a row, a small correction may happen as well.

The price may bounce off the 200-day MA and fall back to $190, after which the rise may resume.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets 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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4.6 stars on average, based on 26 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Altcoins

Ethereum Price Analysis: ETH/USD Sellers are Stepping Up Downside Pressure; Explosive Breakout is Imminent

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  • ETH/USD is very much close to a breakout of the recent range-block formation.
  • Diar reports that on-chain transaction value on the Ethereum network was seen at an all-time-high in December 2018.

Over the past three sessions for ETH/USD, a pick-up in downside intensity has been demonstrated by the market bears. The price had been moving within a narrowing range-block formation for going on 12 sessions, but this appears to be coming to an end. Sellers are stepping up the pressure, looking for a breakout of the sideways movement seen of late.

Ethereum On-chain Transaction Value at All-Time-High

Source – Diar

Diar in their latest report detailed that on-chain transaction value hit an all-time-high on the Ethereum network. Diar provide weekly institutional publications in addition to data analysis of digital currencies. Further within this latest publication, the on-chain transaction levels had hit 115 million in December 2018. This marked an all-time high, which excludes the activity after a hard fork caused by the DAO hack in 2016.

In terms of monetary value, Diar stated that the total US dollar value on-chain last year was seen at $815 million. This was down from the previous $1.1 billion, reported in 2017. As a result, this was a 97% drop in the on-chain transaction value. The drop from peak in January versus December 2018 was “by and large the cause of an 80% drop in Ethereum’s price”.

Commenting on fees, Diar detailed that they are unlikely to have been a laggard on the growth for the Ethereum network. It already has some of the lowest fees that are observed for transacting on-chain. They added, “the Constantinople upgrade, now pushed back, will bring down fees a great deal further for certain types of transactions that would allow for better storage use”.

Technical Review – ETH/USD

ETH/USD daily chart.

Key daily support eyed around $117.50 has been penetrated in the past few sessions. Signs are starting to show of a gradual shift again in favor of a bearish bias. The price is running towards its third consecutive session in the red, with the critical support earlier detailed under threat. ETH/USD did have a quick spike of around 15% lower on 20th January before retracing back within the range-block. A firm breach and close of the mentioned $117.50, the lower part of the range-block, could be punishing. Eyes will then be on a retest of the big psychological $100 mark.

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 112 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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