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Analysis

China Ban Crashes Cryptocurrencies: $50 Billion Burned

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Last Friday’s rumored Chinese crypto-exchange ban that pushed the segment into turmoil entered another phase today, as local regulators confirmed that the legislation is ‘certain’, and issued a verbal shutdown order to the local exchanges. The sector is in full panic mode today, and with the session’s added double digit losses, the total market value of the coins now shrank by around 30% from its recent highs near $175 billion.

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Bitcoin itself is down by almost 30% from its $5000 record price, with the most valuable coin losing 20% since the first rumor of the ban. Despite the huge decline, BTC is still well above its break-out level near $3000, holding on to a large chunk of the advance that developed after the Bitcoin Cash fork.

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Bitcoin’s Surge and the Current Plunge

Ethereum is hit even harder, trading nearly 40% below the price levels of early September, although the backbone of the ICO boom failed to reach its June high during the recent rally.The ETH token is now trading right in our target zone for the market correction that we have been expecting in recent weeks.

The sell-off that has been boosted by the recent comments of Jamie Dimon, and the previously leaked Chinese ban on ICOs was already baked in the cake after the stellar rise 200% rise in the sector from mid-July to September. The surprisingly quick double crackdown might have accelerated the move, but a deep correction was needed to reset the overly bullish sentiment towards the sector.

Ethereum in the target zone after the crash

While the full extent of the ban and the possible consequences are still unclear, the segment might be very close to a panic low, which could present great buying opportunities in the ongoing boom. That said, volatility is likely to stay elevated in the coming days, so traders should avoid leveraged bets in the sector and focus on long-term position building.

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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

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Analysis

XRP Looking to Make a Significant Rally

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The XRP/USD pair went into a deep correction after hitting 0.29490 a month ago. It nosedived to the major support level of 0.19052. The pair consolidated for a few weeks which gave the market the legs to test resistance at 0.22924.

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Technical indicators show that the pair was ready to breach its immediate resistance, which it did this morning. Now that resistance has broke at 0.22924, it’s time to buy. This successful breakout will take the pair to 0.23997 first and 0.26563 next before hitting the target of 0.26796 which is coincidentally a major resistance level.

Technical indicators hint that the market would most likely be overbought by the time it hits 0.26796. Should it respect the major resistance level, the likelihood of the market turning extremely bearish increases. Therefore, it is recommended to closely watch your trail stops to preserve your gains.  

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Summary of Strategy

Buy: As close to 0.22924

Support: 0.22224 and 0.20081

Target: 0.26796

Stop: If the market breaches 0.20081 as next reliable support is 0.19052

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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