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Bitcoin Fork Takes a Big Bite as the Market looks for Logic

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If you are depending on fundamentals to trade any digital currency you will end up frustrated and broke.  In reality, digital currencies do not have the kind of fundamentals like stocks, and in this early phase of fat tail volatility, you can only depend on technical support and resistance levels to guide you. Anticipating and translating the media cycle news will not help you make money in digital currencies.  Staying with the trend in assets is a proven winning strategy.

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I can tell you much of the chatter today about the selloff in Ethereum is related to the Bitcoin fork, now I have zero idea if that should pressure prices lower, but it did, and it spread to all DC ( digital currencies ).  I noted also during this decline that all of the important support levels for DC top 25 are intact.  Let me also say that if you are trading digital currencies from the short side, or day trading them, you are a member of an elite club that is currently the fastest game in town, and you are holding firecrackers in your digital wallets.

The Trend is Your Friend

During trending markets, it is always practical to trade with the trend versus bucking it, so if you are involved in these currencies you will find it more manageable to trade from the long side.  I suggest you watch the next up-move and watch how these DC’s (Ethereum, Litecoin and Dash) have melt ups.  This frenzied buying reflects the trend, and as long as the support levels remain intact ($165 in ETH) the melt ups will continue.

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The chatter about the Bitcoin fork is irrelevant, and the movement in DC could have easily been related to Trump Jr releasing his email string to wolving reporters.  If you look at the stock market today as soon as Jr tweeted all assets sold off.  So the Bitcoin fork is just an unnecessary piece of silverware at an epicurean buffet.  You don’t need a fork, just load up the plate, run back to your table, and trade all DC from the long side with the trend.  Pick a digital currency and become an expert, it is important to be a ground floor follower in any asset class.  This way you are super experienced when volatility hits and will allow you to make better decisions; with this comes profit.

Fundamentals on the Sideline?

Fundamentals will have little connection to pricing for the next few years, developing trade-able fundamental metrics related to expected actions is a fool’s journey.  Stop looking at how they made the sausage.  Invest in digital currency as an asset class for the long-term.  Know that stocks like Amazon traded with the trend for a decade, real estate had 1 or 2 blips in the last 20 years, and buying pullbacks in assets is a proven winning strategy.  Over trading is for losers, cocktail chatter about how they make the digital sausage is mind numbing.  Research an asset, have a long-term investing plan, and stick to it.  Stay long any good asset, and it will be what is was intended to be – a long-term investment that will bring you security – not an unnecessary salad fork at your table.

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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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Steve began his career at the Chicago Mercantile Exchange in 1980 and ran Morgan Stanley Derivative Prop Trading for the firm. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90's. Steve is known as an expert in trading stocks and digital currency and has published thousands of articles and archived video with important market participants related to US Equities, private shares, and crypto currency. He offers a humorous, unique insight related to volatile stocks and the related back stories and drivers. He is a featured speaker on the conference circuit specializing in market volatility, liquidity and emerging market assets.




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  1. SuccessHappinessFreedom@gmail.com

    July 12, 2017 at 5:07 am

    Great Article!

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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

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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 111 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

Crypto Correction Deepens With Bitcoin Falling Below $10,000

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Cryptocurrencies hastened their decline on Thursday, with the total market cap falling to its lowest level in over a week as bitcoin and the major altcoins backtracked.

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Fresh Selloff Hits Crypto Market

Ninety-two of the top 100 cryptocurrencies tracked by CoinMarketCap were trading lower Thursday afternoon. The combined market capitalization for all coins fell 6% to $430 billion, the lowest since Feb. 13.

Bitcoin broke below $10,000 for the first time in nearly a week, and was last seen trading at $9.891. Even with the decline, bitcoin is maintaining its bullish outlook insofar as prices hold above the technically important $9,000-$9,200 region. Although downside is expected to persist in the short term, a bounce back toward $11,000 is expected. This is confirmed by the oversold Relative Strength Index (RSI), which also points to a rebound.

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As the following chart illustrates, the value of bitcoin peaked near $11,800 earlier this week before the recent bout of profit-taking took hold.

Ethereum, the world’s no. 2 cryptocurrency by market cap, fell below $800 for the first time in almost two weeks. At the time of writing, one ether was worth around $793, which represents a decline of 4% from the previous close.

Like bitcoin, ether is also grappling with oversold levels. However, the recent low is much shallower than the one Ethereum experienced in early February when prices fell toward $550.

Meanwhile, Litecoin tumbled to a session low of $188.73, more than offsetting a 50% gain earlier in the week. At the time of writing, the coin was down 6.5% at $192.59.

Elsewhere in the market, Ripple plunged nearly 9% to $0.93, while bitcoin cash fell fell nearly 8% to $1,210.

No Immediate Catalyst for the Decline

Like previous corrective phases, there was no immediate catalyst for the market’s sharp reversal, a sign that technical traders were largely responsible for the downshift. Since peaking above $518 billion on Saturday, the crypto market has declined 17%, all but reversing the previous week’s sharp rally.

On the regulatory front, the French government just announced it will be cracking down on unregulated cryptocurrency trading. In a statement issued by Autorite des Marches Financiers (AMF), the nation’s financial market watchdog, regulators said they had noticed a growing trend in unregulated futures and derivatives trading involving cryptocurrency.

“The AMF concludes that a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency,” the AMF said in the statement, as reported by CCN. “As a result, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID 2 and must therefore comply with the authorisation, conduct of business rules, and the EMIR trade reporting obligation to a trade repository.”

MiFID stands for Markets in Financial Instruments Directive, a harmonized regulatory framework for the European Union’s financial markets. MiFID 2 was launched earlier this year to provide more transparency on traders and go after non-compliance more aggressively.

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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4.5 stars on average, based on 162 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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Analysis

Crypto Update: Bitcoin Tests $10,000 amid Correction

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The altcoin-triggered correction continued in the segment overnight amid the renewed sell-off in global stocks, with a slight bounce in Asian trading and a subsequent dip after the European open. The major coins are all down by more than 5% since yesterday, but for now, the momentum of the move is not worrying, and most importantly the leadership of the rally is holding up relatively well.

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Bitcoin bounced off the key $10,000 level, the $200 support zone held in Litecoin, Monero is still in its consolidation pattern above $280, and only Dash showed deterioration since yesterday, but the long-term picture remains encouraging even in Dash’s case.

LTC/USD, 4-Hour Chart Analysis

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The above-mentioned levels in the technically strongest coins are not even the last line of defense for bulls, as the preceding strong rally left several key levels behind which could serve as the basis of the next leg higher.

Also, we expect the currently negatively diverging coins, led by Ethereum and Ripple, to start showing strength as the short-term momentum reaches oversold territory, and good entry points might be close both for traders and long-term investors.

BTC/USD, 4-Hour Chart Analysis

BTC touched the $10,000 support level, but for now, the technically more important $9000-$9200 zone is not in danger, and the short-term momentum indicators are already neutral thanks to the correction.

That said, more downside is likely in the coming days, but investors and traders should be looking for reversals to enter new positions, as we expect the uptrend to continue, with targets ahead at $11,300, $13,000 and $14,250.

Ethereum Provides a Glimmer of Hope

ETH/USD, 4-Hour Chart Analysis

Although bears are still in control regarding the short-term picture in the second largest coin, this morning ETH didn’t hit a significant new swing low, and that could be the first sign of relative strength, with the $845 support not far above the current price level, and the MACD indicator is already near oversold territory.

Despite the slightly positive sign, short-term traders should remain defensive concerning the weaker coins, while long-term investors should still accumulate the currencies on the dips.

Stay tuned for our detailed technical analysis later on today.

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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4.7 stars on average, based on 111 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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