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Bitcoin Takes a Breather as Prices Drop Below $5,700

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The world’s most talked about digital currency pulled back early Tuesday, a sign that the latest rally is nearing its end.

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BTC/USD Price Levels

After a positive start to the week, bitcoin prices have reversed back toward $5,600 on Tuesday. The BTC/USD exchange rate opened up a nearly $200 trading range on Tuesday. At press time, the pair was down 1.3% at $5,653. Bitcoin remains in overbought territory, based on the RSI, with underlying momentum maintained.

Bitcoin’s current price level translates into a market cap of roughly $92.7 billion, according to CoinMarketCap. That nearly triples the Ethereum blockchain, which is currently valued at $31.2 billion. When assessed by market cap, bitcoin and Ethereum combined account for more than two-thirds of the cryptocurrency asset class.

The BTC/USD has registered a five-day gain of 15.%, which is equivalent to $772. The pair’s 52-week range is $627.77 – $5,861.15.

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Analysts Struggle to Explain Rally

Analysts and market participants are struggling to explain bitcoin’s latest upsurge. The uptrend seems to have begun around the time of news suggesting Chinese policymakers may soon relax their ban on cryptocurrency. However, this alone doesn’t explain the 18% gain over the past five days.

Another plausible catalyst is the anticipated hard fork of the bitcoin blockchain in November, a plan that would benefit existing holders of the cryptocurrency.

The developers behind the Segwit2x protocol have identified a bitcoin upgrade approximately 90 days after the activation of Segregated Witnesses. The controversial plan, which aims to increase the transaction capacity of the blockchain, will occur at block 494,784.

Bitcoin Gold was also on some traders’ wish list before the blockchain community raised suspicion over the project. Several red flags have been identified by Gert-Jaap Galsbergen, which you can read here.

For now, bitcoin’s bull market appears to be taking a breather. As we’ve seen in recent weeks, it doesn’t take much to stoke investor exuberance in a market that has gained nearly 500% since Jan. 1.

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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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4.5 stars on average, based on 152 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: Litecoin and Bitcoin Hit New Rally Highs

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Another day, another round of bullish developments in the cryptocurrency segment, even in the face of a risk-off shift in traditional markets. Following the lead of Ethereum Classic, just like in the previous leg higher, Litecoin also pushed to new rally highs today in early trading following the LCC hard fork.

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BTC/USD, 4-Hour Chart Analysis

This time around, Bitcoin also joined the two undoubted leaders of the market, despite the still slightly overbought short-term momentum readings, while the also relatively strong Monero is still in its short-term correction. Boosted by positive news out of South Korea, the major coins reached the $515 billion mark in market capitalization, although several currencies, most notably Ethereum and Ripple are still underperforming.

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LTC/USD, 4-Hour Chart Analysis

We expect trading activity to pick up today, as US markets return to action, and that could cause more volatile moves than in the last few days. As correlations between the majors continue to decline, the individual charts are more and more important, and we expect rotation to continue between the coins.

Ethereum Classic Hits another Target, Up 200% off the Low

ETC/USD, 4-Hour Chart Analysis

ETC broke-out of its short-term correction yesterday, staying ahead of the rest of the market in this cycle, and it rallied up to the next major resistance zone near $43, with only the all-time high remaining ahead as an obstacle before a new record high.

As we noted yesterday, the coin now is now not in the optimal long-term buy range, and it got downgraded to neutral in our trend model as well after turning bullish on the 2nd of February. That said, further gains are likely, and traders should still play the trend, but long-term investors could already cash in on some of the gains.

Apart from ETH and XRP, Bitcoin Cash, Cardano, IOTA, and EOS are also lagging the leaders today, while NEO also failed to substantially move above its short-term correction, despite yesterday’s strength.

Given the positive signs, we expect the rally to continue in the segment, even if several altcoins continue the current correction in the coming days.

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 99 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

Technical Analysis: Bitcoin Tests Weekend High as Consolidation Continues

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The major cryptocurrencies entered a shallow correction during the weekend, and most of the coins are still trading below their prior rally highs, with only Ethereum Classic registering new highs. BTC is also very close to its Saturday high, as it is still leading the market higher, outperforming both Ethereum and Ripple.

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Bitcoin is still slightly overbought form a short-term perspective and the correction could still continue in the coming days, with key support zones found near $10,000 and between the $9000 and $9200 levels. That said, the price action in the most valuable coin and the broader segment is still in line with the bullish scenario, and we expect the trend to continue after the correction. Above the $11,300 level further resistance is ahead at $13,000 and $14,250.

BTC/USD, 4-Hour Chart Analysis

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Among the other relatively strong coins, Litecoin and Monero are also holding up well, while NEO is also showing short-term strength, diverging slightly from Ethereum which it has been correlating with in recent weeks.

Monero is also trading close to the weekend highs, as is working its way through the overbought short-term momentum readings. The coin is well above the previously dominant trendline, in clear short-term uptrend. Traders and investors could be looking for entry points during the correction, with strong support at $300, $280, and $240.

XMR/USD, 4-Hour Chart Analysis

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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 99 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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Bitcoin

Bitcoin Tops $11,000 for the First Time in Three Weeks as Rally Continues

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The price of bitcoin rose more than $1,000 on Monday, reaching its highest level in nearly three weeks as the crypto market extended its recovery from recent lows.

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BTC/USD Price Levels

Bitcoin surged to a session high of $11,274.74 before paring some of those gains in afternoon trade. At the time of writing, the BTC/USD exchange rate was worth $11,140 for a gain of $1,057 or 10.5%. With the gain, bitcoin has recovered nearly 90% from is Feb. 6 low.

At current prices, bitcoin has a total market capitalization of $189 billion, easily tops among cryptocurrencies. More than $7.6 billion worth of BTC was traded over the past 24 hours. The most active exchanges were Bitfinex, OKEx and Binance, according to latest available data from CoinMarketCap.

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The Battle of Sentiment

Bitcoin has added 26% over the past five days as bottom pickers and speculators returned to the market. The gains have been associated with a broader uptick in the cryptocurrency market, which is now worth more than $500 billion. Although the technical indicators suggest that a long-term revival is still in jeopardy, speculators are betting that bitcoin will return to its glory days where record highs were the norm.

That’s exactly what an anonymous trader did earlier this month when bitcoin was in free-fall. As Hacked reported this weekend, an anonymous “bitcoin whale” sunk $400 million on long positions involving BTC. According to Fortune, the majority of the 41,000 tokens were purchased on Feb. 9, with an additional 9,000 purchases made three days later.

Bitcoin has had a long and volatile history of ups and downs, making the recent swings not entirely unusual. However, an analysis of the Relative Strength Index (RSI) suggests that bitcoin prices dipped below key support zones during the most recent selloff, which could signal the presence of bear market conditions. Although the RSI has since recovered, some analysts have indicated that the recent bout of volatility could be a sign of more adverse trading conditions moving forward.

That was the general idea behind an interesting forecast put forward by DataTrek’s Nick Colas, who last December predicted bitcoin’s trading range to be $6,500 to $22,000 this year. He mentioned the likelihood of multiple “crashes,” which he described as large drops of 40% or more. It took less than two months for Colas’ prediction to come to fruition.

The author generally agrees with Colas’ assessment and expects further price volatility in the near future as dramatic falls give rise to even bigger gains. An understanding of investor sentiment explains why this is the case.

Bitcoin, like other digital currencies, is heavily exposed to FUD and FOMO – two acronyms that tell the story of its recent price movements. “Fear, uncertainty and doubt” regarding cryptocurrency regulation was largely responsible for bitcoin’s fall from grace in January and February. As prices bottomed, “fear of missing out” led more traders back into the market. It remains to be seen how this mentality will drive bets in the derivatives market, which offers an other venue for direct exposure to bitcoin.

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 152 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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