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Technical Analysis: Coins Explode Higher but Segment Remains in Downtrend

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The sea of red in the cryptocurrency sector quickly turned green today, as all of the major coins surged off the crash lows, gaining from 25% to 100% in less than a day after BTC plunged below the$10,000 level. The rally was fueled by reports from South Korea about the rumored exchange ban that suggests severe technical problems with the execution.

Despite the bullish news, the move was largely technical in nature, and the major coins followed support/resistance levels and trendlines very closely. Now, the short-term picture remains neutral, as the dominant trend is still bearish, but the oversold momentum readings suggest further choppy consolidation.

Bitcoin reached up to $12,000 during the bounce, and the coin is still oversold, so more sideways price action is likely, and even a spike up to $13,000 is possible. That said, we still expect at least a test of the lows and a possibly lengthy bottoming phase before a durable rally. Strong support is found at $11,300, $10,000, $9000, $8200, and $7650.

BTC/USD, 4-Hour Chart Analysis

Altcoins scored lofty gains as well, with Ethereum topping $1000, Ripple reaching above $1.50, while Litecoin climbing back to $200. Ethereum has been among the leaders in the past few weeks, but now it likely entered a broad correction that could end later than Bitcoin’s, and most of the majors move lower so traders and investors should stay away from new positions here. Key support levels are still found at $850, $740 and at $625.

ETH/USD, 4-Hour Chart Analysis

Ripple doubled off the crash lows near $0.85, after the coin got decimated following the recent exponential break-out. While the correction in the coin will likely last longer, we still advise investors to accumulate XRP near the main support levels at $1.25 and $0.85, although a longer consolidation is likely ahead.

XRP/USDT, 4-Hour Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is among the coins in the later phase of their correction, and the coin might be close to hitting a final bottom. That said, LTC could still re-test the $100 level before a durable rally but investors could accumulate the coin on the short-term sell-offs near $125 and $100. Strong resistance is found at $200 and between $250 and $260.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is still relatively weak compared to the other major coins, although it already got back to the key target zone for the correction between $600 and $650. Below that, further support is found at $500, $470, and near $410, while the $825 level is in focus after the bounce. We still expect the correction to continue, but investors could already look for entry points near the main support levels.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is relatively strong from a technical perspective, as it only briefly dropped below the key $23 level, and recovered quickly above $30 during the bounce. Despite the strength, the correction will likely continue, even if the final low might already be in, and traders should be aware of further volatile drops. Investors could add to their holdings on the short-term sell-off near $25 and $23, with primary resistance ahead at $34.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero recovered to the $330 resistance level after the crash and it remains among the stronger coins, as it stayed within the range of the mini-crash n December. As the long-term momentum is still slightly in overbought territory after the stellar rally at the end of last year, the correction will likely continue, and a test of the $200 level is still before a durable rally.  Further support is found at $300, $240, $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO got back to its strong short-term uptrend following the crash and the test of the $100 level, but the coin will likely break the trend in the coming period and enter a longer correction after its recent surge to new all-time highs. Both traders and investors should wait for a better long-term setup before entering new positions. Key support levels below $100 are found at $80, $64, and $56.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is still showing early signs of technical strength, although the key $3 level sopped the bounce for now. As the broad correction in the segment runs its course, the currency might be in for more volatile trading, but investors could already accumulate the coin on the short-term sell-offs. Support zones are found between 2.25$ and $2.35 and at $1.5, with a short-term zone just below $2.

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 414 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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1 Comment

  1. mzl961

    January 18, 2018 at 10:31 pm

    Certain articles/advice in this publication contradict each other. One says buy ripple for a longterm trade and the other says it will tank soon/correction not over for the coin. Such BS. Say one thing and stick to it.

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Altcoins

Cardano Price Analysis: ADA Moving Within A Deadly Range Block

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  • ADA remains vulnerable to further downside pressure, and there is potential for another 50% drop.
  • IOHK launch two new Cardano tools, ‘Plutus’ and Marlowe for smart contract writing.

Cardano’s ADA price has been very much depressed for the past five weeks now, dropping well over 60% within this period. As a result, ADA/BTC it has been forced to trade around the lowest levels seen since December 2017. It still has yet to show any promising signs of it escaping this stubborn downside trend.

Over the past five sessions, the price has managed to stabilize, producing a near-term bottom within the $0.02800 region. Important to note, with the above-detailed, ADA/USDT price action is moving within a narrowing range-block. This is subject to a potential breakout, causing a deeper drop, as part of this bearish market.

IOHK Launch Two New Cardano Tools

Earlier this week, IOHK, the engineering company that builds cryptocurrencies and blockchains, announced two new tools. These will be for the writing of smart contracts on the Cardano network. The tools named Plutus and Marlowe have now been launched in test format. They have been introduced to provide great value of assistance for start-ups, financial services and fintech industries, and academia. In all cases, the tools allow for preparation of blockchain contracts which will run on Cardano.

Plutus

Plutus will be providing general purpose programming language and tools for Cardano. The scientists and engineers at IOHK were able to combine the discipline of the Haskell functional language with Cardano. As a result, the creation of a platform for fintech developers to write secure and robust smart contracts is being developed.

Marlowe

Marlowe is a streamlined way for non-programmers to generate code and create software products. It has been noted at an easy-to-use tool. Even professionals operating within the finance industry who do not have any programming experience can build these automated financial contracts on the blockchain.

There was full coverage on this and an exclusive interview with IOHK and Cardano’s Charles Hoskinson, on this. See more.

Technical Review – ADA

ADA/USDT 4-hour chart

Looking via the 4-hour char view for ADA/USDT, vulnerabilities remain to the downside. As touched upon earlier, following the steep falls through November into December, price action has found some firmer footing. However, with this consolidation state, a range-block has been formed, which is subject to exposure by the bears.

ADA/BTC weekly chart

The near-term support as part of this current range should be noted at $0.02800. If this fails to hold, there could be some chunky downside to come. Judging from ADA/BTC, there could be room for another 50% move south. Further south eyes would be on the next major area of comfort, seen at the 0.00000550 region.

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 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Forex Update: Dollar Drops, Risk-On Currencies Rally on Trade Optimism

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1366 0.43%
GBP/USD 1.2634 1.19%
USD/JPY 113.25 -0.10%
AUD/USD 0.7223 0.26%
GOLD 1,249 0.09%
WTI Crude Oil 52.16 0.37%
BTC/USD 3,444 2.74%

The forex market saw another very active session, with the key topics of the recent weeks still making headlines and causing wild swings in the major currency pairs. The Brexit saga took another turn today, as Prime Minister Theresa May faced a no-confidence vote in her party following the delay of the vote on the draft plan in the British Parliament.

The result of the vote is not yet known, but analysts expect the PM to win the vote after she stated that she won’t run for another term in light of the Brexit-related chaos. The Pound has been rallying so far today together with most of the risk-on currencies, with yesterday’s decision to grant bail to the recently arrested CFO of Huawei boosting investor confidence across the globe. President Trump also hinted on progress on the ongoing talks, and that led to a sizable drop in the USD and in US Treasuries, as safe-haven flows reversed.

Technical Analysis

USD/CNH, 4-Hour Chart Analysis

The Dollar/Yuan pair, which has been crucial for all markets in recent months, broke its short-term uptrend on the news, and it fell to its lowest level in almost a week. The Chinese currency is still weaker compared to its post-trade-truce levels, but it’s also clearly above its October lows, despite the continued weakness in the Chinese economy thanks to the trade-related optimism.

That said, the long-term trend is clearly positive in the pair, and negative in the Yuan, and the credit-related troubles, which will likely weigh on the currency for years, will likely outweigh the topic of trade next year. We still expect the likely trade deal to cause a strong bounce in Chinese assets, but it’s unlikely to change the broader trends especially given the broad bearish shift in global risk assets.

EUR/GBP, 4-Hour Chart Analysis

The EUR/GBP pair is testing the recent break-out level amid the continued Brexit uncertainty, with the 0.90 level being in focus throughout the day. The short-term uptrend remains clearly intact in the pair, and bulls remain in control of the market from a long-term perspective as well.

Strong support is found near 0.8920 and a move towards the 2017 highs near 0.93 is possible in the coming months, even as both currencies remain among the weaker majors, and European growth is clearly weakening.

AUD/USD, 4-Hour Chart Analysis

The AUD/USD pair is currently trading in a bearish wedge pattern amid the mixed price action in commodities, and the Aussie has been acting weak today, suggesting a likely move below the 0.7200 level in the coming days.

The currency is neutral on both time-frames currently, but a move below 0.7165 would mean that the long-term downtrend will resume following the two-month-long correction, that broke the long-standing declining trendline.

Gold Futures, 4-Hour Chart Analysis

Gold has been showing relative strength today compared to the other main safe-haven assets, which pulled back thanks to the positive developments in the US-Chinese diplomatic spat, and the precious metal successfully tested the recent break-out level.

Gold is very close to confirming a broader trend change, although it needs to stay above $1235, and a move above $1260 would suggest a test of the next major resistance zone near $1300, with strong support, found at $1215 and $1080.

Key Economic Events Tomorrow

 

ChartBook

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/JPY, 4-Hour Chart Analysis

AUD/JPY, 4-Hour Chart Analysis

GBP/JPY, 4-Hour Chart Analysis

USD/CHF, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

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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4.7 stars on average, based on 414 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

Zcash Price Analysis: ZEC/USD Shaping Up for Another Potential Fall; Coinbase Giving Zcash Away

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  • Zcash saw a decent bounce on Wednesday, jumping over 6%, but technical there are still some vulnerabilities.
  • Coinbase as part of their ‘12 days of Coinbase’ campaign, will be giving away ZEC to families in need in Venezuela.

ZEC/USD enjoyed a string of gains on Wednesday, jumping as much as 6% in the session. This appears to be somewhat of a consolation move for the bulls, as the sellers look to be exhausted. There has been little direction since the heavy pressure to the downside slowed down and stabilized on the 7th December. The price through the month of November dropped a hefty 63%, with that being carried through into December.

Coinbase Giving Away ZEC

Just a couple of weeks ago the popular U.S. cryptocurrency exchange Coinbase announced the listing of ZEC. They are now facilitating ZEC trading via Coinbase Pro, the proprietary trading platform. The service was made available for Coinbase Pro users in the U.S, U.K, the European Union, Singapore, Australia and Canada. On the back of this, ZEC/USD had jumped as much as 20% over the course of the day, following the announcement.

Most recently, Coinbase launched a Christmas campaign, which entails a series of announcements, dubbed “12 days of Coinbase.” Today was the second day, in which they detailed a gift in aid for distressed families in Venezuela. To provide help to these families, Coinbase will be donating $10,000 in Zcash to GiveCrypto.org. This is a nonprofit organization, which distributes cryptocurrency to people within poverty struck living conditions. $1.00 USD worth of ZEC will be deposited into crypto wallets of over 100 families in Santa Elena every day for three months.

Technical Review – ZEC/USD

ZEC/USD 4-hour chart

As touched upon above, ZEC/USD had been provided with a relief bounce in the session. However, price action is still moving within a bearish pennant pattern structure. This has been forming since the 7th December, within this consolidation mode. Price action is narrowing following the steep drop just some days ago. Technically, it does typically spell further potential trouble when behavior is as such currently seen – generating a calm before a further potential storm caused by the rampant bears.

ZEC/USD weekly chart

Given the above-mentioned pattern formation, ZEC/USD is vulnerable to another steep drop. Near-term support of this pennant should be noted at around $54.60. Should the bears manage to force a break, then expect the flood gates to open. A further wave of selling would likely follow, with the next major area of support, not seen until the $30 territory. The price was last down at these levels in February 2017. A demand zone can be seen running from $35 down to $26.

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 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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