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The Bottom is Here? Bitcoin Price Hits $3000 then Storms to $3600

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Yesterday’s crash continued unabated today, and it reached epic proportions as investors dumped all the major coins with both hands, before several Chinese exchanges (like OKcoin, Huobi) confirmed their (only) partial closure. The prior panic selling drove BTC below the $3150 support, then $3000 and the June all-time highs. With the coin losing more than 40% top-to-bottom the end of the decline could be very close and the first major rally already started today, as Bitcoin’s price catapulted to $3600 very quickly and altcoin prices also soared off their panic lows.

While we couldn’t be sure that a major bottom is already formed, and a re-test usually comes after such a move, investors now should be buying the short-term dips. The deep correction that we expected cleared the overbought readings of the prior monster rally, and sentiment is getting bearish enough for at least a tradable rally.

BTC/USD, 4-Hour Chart Analysis

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The other major coins were hit even harder amid the broad liquidation, and the total market capitalization of the segment crashed below $100 billion, marking a loss of $80 billion in two weeks. Ethereum got close to the $200 (-50% off the all-time high) level, Litecoin spiked to $35 for an almost 60% plunge, while Ripple touched the $0.15 level. The selling pressure reached yesterday’s relatively strong coins as well, as IOTA fell below primary support, while Monero also declined by 20+%. As the market might be at a major turning point, let’s look at the short-term charts before the weekend.

Ethereum

ETH/USD, 4-Hour Chart Analysis

ETH followed BTC higher off the panic lows, and got back to the next major $235-$250 support/resistance level. The coin is getting long-term oversold, and today’s low could mark the end of the correction, although a re-test of the lows is possible. Investors should now be adding to their positions on the short-term dips. Support is found near $200 and around $175, while resistance is ahead at $280 and $300.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin spiked below $50, but it’s now back near the crucial level, after it briefly tested the long-term base formation near $35. The coin is very likely hit a panic bottom today and although more sideways action is probably ahead, the short-term dips should be bought by investors, while traders should wait for a confirmed trend change in the volatile environment.  Support is still found at $47, $44, and $38 while resistance is ahead at $56, and $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash held up well during the crash, but it still got close to the $220 level and the prior highs, after dipping below the $265 support. The coin is now back above the key level, but we expect more volatility and a possible re-test of the lows before a sustained move higher. That said, the long-term picture is encouraging, and investors should be looking for buying opportunities during the bottoming process. Strong support is still found near $220, with resistance ahead near $300.

Ripple

XRP/USD, 4-Hour Chart Analysis

XRP found support in the long-term base formation and it is now back near the top of the pattern at the $0.18 resistance. The declining short-term is still intact, but the coin could be among the first coins to head higher after the end of the correction, and long-term investors should still add to their positions here. Support is still found at $0.16, while resistance is ahead at $0.18, around the $0.20 level, and near $0.22.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic experienced liquidation below the key $13.50 level, and it plunged to the next long-term support near $9 on huge volume. The coin has to get back above the prior support level, or it will remain in a declining long-term trend. Until the recovery, short-term traders should wait with opening new positions, but the current levels are still attractive for long-term investors.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero remained relatively strong amid the sell-off and it is trading back above the $80 support, after spiking below the key level today in early trading. While volatility is still expected to remain high, today’s low is likely the final bottom of the correction and investors could already add to their holdings. Resistance is ahead at 4100, $125, and near the all-time high above $150, while support is at $80 and $68.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO hit the support level near $13 before the strong rebound, and it recovered above the $16.50 support/resistance. Today’s bottom is likely to be a tradable one after the crash. We expect only brief moves below $16.50, and investors should be adding to their positions now. Short-term traders should still wait until a new uptrend is established as volatility will likely remain high. Resistance levels are ahead at $22, $25, and $30, while support is a found at $13, and $11.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA held above the $0.35 level as we expected, and it is now trading above the line-in-the send support zone between the $0.45 and $0.48 levels, confirming the short-term relative strength of the coin. The declining trend is still intact in the coin, but the long-term picture is encouraging and investors could still add to their positions. Resistance is still ahead near $0.65, with key support at $0.35.

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 276 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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3 Comments

3 Comments

  1. Chris G

    September 15, 2017 at 5:53 pm

    thanks mate

  2. vanh139@gmail.com

    September 15, 2017 at 6:51 pm

    Is it safe to say that near the $3200 level of BTC, purchase of other Altcoin can be made for short-term trade ?

    • vanh139@gmail.com

      September 15, 2017 at 6:55 pm

      And thanks a lot btw

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Analysis

Crypto Update: Coins Pop Higher as Consolidation Continues

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Trading activity increased in the major coins today, amid a mixed news flow, and for now, bulls scored a small victory following last week’s bearish price action. Bitcoin, Ethereum and most of the largest digital currencies gained several percents, despite the weekend’s deterioration, and although the technical setup didn’t change significantly, an immediate breakdown has been averted.

The discouraging BIS report that has been making waves today wasn’t enough to push the coins below support, but for now, the short-term strength left the trading range intact with the primary resistance levels still keeping a lid on prices. Given the uncertain long-term picture, the coming weeks will be crucial for the largest coins and the whole segment alike, with Bitcoin being in the center of attention after its long period of relative weakness.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin held up above the April low, despite the bearish short-term picture, and the coin the highest price level in a week, breaching the $6750 level in the process. While the most valuable coin fared relatively well today, it clearly remains a laggard from a broader perspective, and it is still trading in a declining short-term trend, with several strong resistance levels just ahead.

The $5850 is the key from a long-term perspective, with further support levels at $6500 and $6275 and resistance ahead at $7000 and $7350.

Bearish Rotation Among Altcoins

ETH/USD, 4-Hour Chart Analysis

On a negative note, the leaders of the latest rally were among the weaker coins today, and that is a sign of bearish rotation in a segment, and until major resistance levels are broken traders shouldn’t enter new positions here. Ethereum managed to rally above $500 yet again, but it remained below week’s bounce high, leaving the trading range intact, while the declining short-term trend is also still dominant.  Strong resistance is still ahead between $555 and $575, while support below $500 is found at $450, $400, and $380.

EOS/USD, 4-Hour Chart Analysis

EOS, which is one of the strongest majors technically speaking also edged higher today, but it remains stuck in the declining short-term pattern, and below key support/resistance zone near $12. The coin is well below last week’s high and until a confirmed short-term trend change, traders shouldn’t enter positions here.

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 276 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

Brent Crude Might Be at Risk

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At the beginning of this week, the Oil prices are still under pressure. By the middle of Monday, Brent is trading at 73.36 USD, but it was much lower during the Asian trading session.

Attention of market players is focused on the OPEC meeting, which is scheduled to take place in Vienna on June 22nd and 23rd. The Austrian meeting has been under scrutiny for some time now: earlier, investors were worried by discussions about possible increase of the daily output by 1 million barrels, but now they are concerned by intention of three countries, namely Venezuela, Iraq, and Iran, to block such decision.

In fact, 1 million barrels per day is about 80% of the oil supply excess, which the OPEC+ has been fighting over the last 18 months. If the countries make decision to increase the daily output, the oil market will be quickly back to the numbers it was against for a long time. The oil supply will rise, but the demand won’t be able to grow at the same pace. As a result, the oil prices will have to fall again.

Still, there is one interesting detail. The OPEC+ can’t increase the daily output by a split decision. However, Saudi Arabia and Russia need this decision, that’s why one may assume that these countries will try to find the way to increase the daily output by sidestepping other members of the organization.

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From the technical point of view, Brent is trading downwards. In the H4 chart, one can see two descending channels: the major channel, which is quite wide, and the internal one, which is narrower. Speaking of the first channel, one can see that the price was reaching new lows step by step, without touching the support line, which shows the downtrend weakness. The internal channel is looking more stable and if the price rebounds from its support line, the instrument may resume growing towards the resistance level at 76.00. However, if the price breaks the support line at 72.00, Brent may fall to reach the psychologically-crucial support level at 70.00.

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 3 rated postsHaving majored in both Social Psychology and Economics, Dmitry went on to continue his education in post graduate. He then worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped him to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. Dmitry is a pro in the financial field who authors articles for various international media. He also holds the position of Chief Analyst at RoboForex.




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Altcoins

Crypto Critics: Fractured Facts

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I have another confession.  As a long time investor, I believed in the theory of efficient markets. This basically means that every participant in the market has immediate and complete access to all information facts like price, earnings and other data.  

I made the mistake in applying this theory to cryptocurrencies. Lately, this has been a mistake.  Yes it is true that anyone with the time and interest can go about gathering all the facts. But are all facts telling the truth or are they really fractured facts?  Either way they are dictating investor thinking and that is a key to this market.

According to reports on MarketWatch, crypto prices slumped on the release of a 24 page report from the Bank of International Settlements. BIS stated that cryptocurrencies suffered from “a range of shortcomings that would prevent cryptocurrencies from ever fulfilling the lofty expectations that prompted an explosion of interest — and investment — in the would-be asset class”.

The BIS is no small town organization. They serve as a central bank for other banks and they have been doing this since 1930.  When the BIS talks, people take things they say very seriously.

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The doomsday article released Sunday paints an accurate picture of the state of cryptocurrencies today. But what about tomorrow?  Most everyone is familiar with the issues of speed, security and energy consumption, not to mention regulation. But for the BIS to conclude that none of this problems will ever be solved is down right nieve.  It is the equivalent of declaring in 2001 that the Internet was doomed because 90% of users were connect on dial up modems.

Rotten Research

The BIS report is not the first fracturing of facts presented by well regarded organizations that is scaring investors. Remember back in May? We were treated to the research headline: Bitcoin Futures Caused The Crypto Market Crash according to Federal Papers.

Both the Federal Reserve Bank of San Francisco and a Stanford University professor released a report concluding the launch of bitcoin futures last December contributed to the ensuing price collapse. Pretty far fetched stuff, and here is why.

Bitcoin futures trading began on December 10. BarChart.com shows the CME traded a measly 932 contracts while the CBOE handled 3,887.  Of that total some 2,828 contracts were still “Open Contracts” on December 29th leaving just 1991 coins to do all the harm. During that final week of December over 1.4 million coins were traded. The findings were simply flawed.

Much like the BIS, when the Federal Reserve speaks, people believe they have done their homework carefully.  Throw in Stanford and that adds further weight to this conclusion.

And Then There Are Those Other Facts

And then there was the revelation last week that, much of bitcoin’s 2017 boom was market manipulation, research says.  In a huge 66 page report it was claimed that at least half of the 2017 rise in bitcoin prices was due to coordinated price manipulation using tether.

The author, University of Texas at Austin finance professor John Griffin, argues that Tether was used to buy bitcoin at key moments when it was declining, which helped “stabilize and manipulate” the cryptocurrency price. BTW: this is the job of the specialist on the floor of the New York Stock Exchange.

Professor Griffin appears to have done an excellent job correlating events without much consideration for the economics involved.  According to Bloomberg’s Aaron Brown, for Professor Griffin to be correct in his assertion that tether pushed up bitcoin prices four basis points per 100 bitcoin, Bitfinex would have needed to spend a boatload to inflate the cryptocurrency.  With Bitcoin at $10,000, for example, that means Bitfinex spends $1 million to push the price up to $10,004.

When you look at things from this perspective, Griffin’s findings look pretty absurd.

Look Closely At The Facts

These days with crypto psychology the worst since Mt. Gox in 2014, it seems like a good time for investors to capitalize on the fractured facts.  Technical analysis shows that cryptocurrencies bitcoin, Ethereum, Ripple and others are hovering around key support levels. It would not be shocking at anytime to find some academic study linking crypto to the common cold.  By the way, it is a fact that last years dramatic crypto price spike came right at the start of the flu season.

A far more relevant fact was last week’s announcement by the Securities and Exchange Commission that neither bitcoin or Ethereum were securities. Perhaps equally important is the conclusion that when ICO do not convey an equity ownership position, they too are considered in the same non-security category as bitcoin and Etherrun.  This is a fact.

What we do know is that crypto prices are as low as they have been since well before the spike last December.  Just as the markets recovered from Mt. Gox, the mindset of investors will recover and that is the key.

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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4.4 stars on average, based on 81 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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