What crazy rally you might ask? Bitcoin is the star, right? Everything was about BTC (and BCH) in the last few months, and lots of traders forget the gains that ETH posted amid the take-off of the ICO Rocket during the spring.
Comparing ETH and BTC in 2017
By the numbers, out of the two largest coins, 2017 is still the year of Ethereum as the 3600% rise in the token’s price dwarfs Bitcoin’s impressive 630% gain. Could Ethereum be on the verge of another epic surge? Before answering that question, first let’s see what happened with the coin in recent months.
How Did We Get Here?
ETH/USD, Daily Chart Analysis
Ethereum finally broke above the magical $400 barrier that has kept a lid on the token’s price for five months after the crazy run-up in May. What first followed after that stellar move, was a 70% decline top-to-bottom, with a flush-out panic low in July.
Our trend model turned long-term positive even before the spike lower, but since then, the coin only managed to get close to the all-time highs, while Bitcoin eclipsed the previous star with its dominant performance. Now the tide might be turning, as ETH is finally gathering bullish momentum and today it breached the $400 mark, flirting with a break-out from the giant triangle consolidation pattern.
Fundamentals vs. Technicals
Fundamentally speaking, a lot of positive and negative catalysts could be cited from the past 5 months, (regulation issues, Chinese ICO ban, record inflows in the segment, new waves of adoption, the successful updates and so on…) but from a birds-eye perspective the Ethereum ecosystem is expanding, the segment is at all-time highs regarding market capitalization, and the major coins are all in uptrends, so, for now, bulls are firmly in charge.
With all that in mind, technicals might be more useful at this point to judge the prospects of an Ethereum break-out. Firstly, although the coin is not overbought yet, long-term investors should already be sitting on decent profits since the major correction in June-July, and a break-out to new record highs is rarely the optimal entry point.
That said, after such a huge consolidation phase, the coin might be ready for a major rally, after the break-out that Rakesh correctly predicted, with great trading opportunities, and plenty of time to reduce exposure as the currency heads towards an overbought stance.
What Could Lie Ahead?
Projecting the consolidation-range is a great tool for setting up targets for a break-out, and the Fibonacci extensions serve as our primary goals for the next period. The initial target according to the extensions would be the $470-$475 range, while longer-term targets are at $512, $575, and finally near $680, the full range projection target.
All that said, we would be surprised if ETH would tackle the psychologically important $500 level without substantial resistance, and of course, the success of the current break-out move is not carved in stone either, so traders should always use stop-loss levels, $380 and $350 supports look optimal depending on the position-sizes. Long-term Investors should be already looking at exit levels to sell portions of their positions and prepare for the next major correction to load up again.
To answer the question in the title, we honestly don’t know, but the long-term prospects of Ethereum are bright and the current setup could very well lead to a runaway move, not unlike Bitcoin’s recent surge, and we still wouldn’t dare shorting this bull market.
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.
Long-Term Cryptocurrency Analysis: All Majors Stretched as Ripple Finally Breaks-Out
Although the previous leaders of the rally started to correct or at least consolidate in the wake of the overbought long-term setups, another batch of coins turned exponential, with Litecoin, Ripple, and Ethereum all registering lofty gains this week. Bitcoin, Monero, and Dash have been holding up well, and even drifted to new marginal highs during the period, while Ethereum Classic had a more volatile week, before moving to new highs today.
XRP left the broad trading range that has dominated its market since May, and surged to new all-time highs while almost quadrupling in the process. As the coin was the only major on a long-term buy signal according to our trend model, and the move triggered a sell signal on Thursday, now all of our tracked coins are on sell signals.
Ripple could be in for further short-term gains but long-term investors should reduce their positions after this week’s spike. Support levels are found Major at the prior high near $0.4250 and in the $0.30-$0.32 range.
XRP/USDT, Daily Chart Analysis
IOTA, which has been leading the market higher before is down by more than 30% off its all-time high, but given the exponential move before, an even deeper correction is likely in the coming weeks, and investors should wait until a more favorable setup to add to their positions. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.
IOT/USD, Daily Chart Analysis
Let’s see how the long-term charts of the other majors look this weekend.
Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading
Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.
With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.
BTC/USD, 4-Hour Chart Analysis
XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.
XRP/USDT, 4-Hour Chart Analysis
Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction
Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.
XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.
XRP/USDT, 4-Hour Chart Analysis
While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.
Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.
LTC/USD, 4-Hour Chart Analysis
- Trade Recommendation: Ethereum December 16, 2017
- Long-Term Cryptocurrency Analysis: All Majors Stretched as Ripple Finally Breaks-Out December 16, 2017
- Trade Recommendation: OMNI/BTC Range Trade December 16, 2017
- Trade Recommendation: NEM December 16, 2017
- Risks abound with Ethereum and its Application Developers December 16, 2017
- Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading December 15, 2017
- Trade Recommendation: MaidSafeCoin/Bitcoin Bounce Play December 15, 2017
- Trading recommendation: Lisk/Bitcoin December 15, 2017
- Trade Recommendation: Waves December 15, 2017
- Trade Recommendation: Bitcoin Gold December 15, 2017
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