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Crypto Update: Coins Extend Losses as Bulls Fail to Show Up

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While the major cryptocurrencies haven’t been able to gain ground following Monday’s Tether-induced turmoil, the market has been stable in the past few days, and the top coins managed to hold up above their short-term support levels.

After yesterday’s slightly bearish session, overnight, Bitcoin, Ethereum, and Ripple all drifted the narrow ranges that developed during the week, and most of the smaller coins also turned lower, even as volatility remains relatively low.

The total value of the market dropped to $207 billion, but it’s still well above the bear market low, and the segment avoided a major technical breakdown that was looming after last week’s selloff. That said, the long-term picture is still bearish in the case of most of the majors, and our trend model is also on sell signals across the board from a short-term perspective.

On another negative note, Ripple and Stellar also joined the decline yesterday after showing strength this week, and the segment is still missing a bullish leadership.


BTC/USD, 4-Hour Chart Analysis

While Bitcoin dropped below the very narrow post-spike trading range, it continues to trade above the primary support level near $6275, and well above the lows from last week. We maintain our short-term sell signal on the coin, as it failed to recapture the $6500 level, and although the long-term signal is still neutral for BTC traders still shouldn’t enter positions here.

Further resistance levels are ahead near $6750 and $7000, while above the key long-term support zone near $5850, a weaker level is also found near $6000 and the next major zone is between $5000 and $5100.

Ethereum Dips Below $200 as Ripple Tests Long-Term Zone Again

XRP/USD, 4-Hour Chart Analysis

As Ripple’s relative strength faded, the third largest coin quickly gave back most of Monday’s gains, and now it trades right at the key long-term support/resistance zone between $0.42 and $0.46 zone. The lack of bullish follow-through is a negative sign for the whole segment and it gave another confirmation of the still apparent selling pressure on the majors.

With that in mind, traders still shouldn’t enter positions here, even as XRP remains above the recent triangle consolidation pattern, with strong resistance ahead at $0.51, $0.54, $0.57, and with further resistance zones found near $0.375 and $0.35.

 

ETH/USD, 4-Hour Chart Analysis

Ethereum showed no sign of relative strength this week, and the coin is back below the $200, although the decline also lacked momentum so far. The second largest digital currency is clearly above the next strong support level at $180, with further levels just below that near $170 and $160.

ETH remains on sell signals on both time-frames given the dominant broader declining trend and the short-term weakness, and odds still favor the test of the bear market low in the coming weeks, with strong resistance levels still ahead at $235 and $260.

IOTA/USD, 4-Hour Chart Analysis

Most of the smaller altcoins are also under clear selling pressure, with the likes of Monero, IOTA, EOS, and NEO all drifting lower in the past couple of days. Litecoin also followed the broader market lower so far today, and the coin is already testing the key $51 level, as we expected after showing weakness earlier on this week. A move below primary support would warn of a test of the bear market low near $47 with the next major zone found at $44.

LTC/USD, 4-Hour Chart Analysis

With that in mind, traders and investors should stay away from the coin until at least s short-term trend change, with strong resistance levels ahead near $56, $59, and $64.

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 443 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

EOS Price Analysis: EOSIO 1.6 Update Enhances Speeds and is Cost Effective; Downside Price Risks Remain for EOS/USD

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  • EOSIO developers have released 1.6 upgrade, which sees enhanced speeds and is more cost efficient.
  • EOS/USD price action is ranging; given current behavior, a breakout may just be imminent.

The EOS price on Friday is seen trading down in minor negative territory. The price is caught in a very stubborn range. This behavior being observed could prove to be damaging in the coming sessions if the bulls do not break above resistance. EOS/USD is being dictated by a tough acting supply area, which is seen tracking from $2.60-$2.50 range. Then to the downside, a near-term demand zone is keeping the price propped up for now, $2.35-$2.25.

EOS/USD is moving within this consolidation mode, which has come into play since breaching a vital part of the bull’s recovery. An ascending trend line was seen tracking from 7th December 2018, right up until it was breached by the market bears on 10th January 2019.  This had coincided with the price running into chunky resistance at the psychological $3.00 price mark. It has not convincingly been above this region since the back-end of November 2018.

EOSIO 1.6 Release

EOSIO developers, who have been working on a system upgrade, have now announced the release of an upgraded version 1.6.0 of EOSIO. In terms of the impact of this development, they have instantly been noticeable and signaling a large improvement.  This new release does boast further features and fixes to improve upon the cumulative patches, which were implemented to enhance v1.5.

Details were provided by the company within an official Medium blog post. Updates on the EOSIO software will enhance efficiency for the peer-to-peer networking layer in addition to seeing real-time transactions improve overall transaction speed. They further stated that this release is something that had been planned as part of their progressive goals to improve their performance. They have intentions to maintain the fastest protocol across the market.

The development team tweeted, “Tests show upwards of a 35% increase in likely transaction speed. We are projecting noticeable improvements to sustainable transactions per second. In addition, reduced CPU costs, and lower latency on all EOSIO based blockchains.”

Technical Review – EOS/USD

EOS/USD daily chart.

The key for a new committed trend is to see a breakout from the confinements of the mentioned supply sitting above and demand zone below. Given the earlier detailed break below an ascending trend line, vulnerabilities remain, with the range-block formation.

Should the bears manage to force a drop below $2.25, then a new wave of selling will likely come into force. The next major area of support should be noted down towards the December 2018 low. $1.83 and then then $1.55 regions should be sought for potential comfort.

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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4.6 stars on average, based on 110 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

3 Things You Need to Know About the Market Today: Trade Rally, Pound Pullback, Tesla Worries

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1, Trade Optimism Drives Rally in Stocks, Oil

Shanghai Composite, 4-Hour Chart Analysis

The US government is mulling to lift or ease some of the trade tariffs on Chinese goods, at least according to the reports that surfaced yesterday, and although the rumors were promptly denied by the Treasury, risk assets have been pushing higher ever since. Global stocks are trading at 1-month highs, with understandably, the major US indices and China leading the way higher. We expect further gestures by the two sides in the coming weeks, as the talks progress, but a final agreement could still be months away.

The most affected commodities, such as copper and oil are also up today, and but as we noted this weekend, the oversold rally in risk assets is stretched now. Also, even as the weaker global benchmarks, such as the Shanghai Composite have joined the party, the clear economic slowdown and the bearish technicals make the current environment hostile for bulls

2, Pound Retreats After Hitting 2-Month High Above 1.30

GBP/USD, 4-Hour Chart Analysis

Besides the Trade War saga, the likely delay of the Brexit deadline has been making waves all week long, and Pound bulls seem to like the idea of a possible “soft” deal with the European Union. The currency hit its highest level against the Dollar since mid-November, topping the 1.30 level, while British stocks are also trading near their 2019 highs.

Prime Minister Theresa May pledged to include the opposition parties following Wednesday’s no-confidence vote, but for now, even starting the talks is challenging, even though the government labeled the first talks “constructive”. In any case, with the chances of a no-deal Brexit being low right now, the Pound could enjoy further gains, especially as long as the global risk rally lasts.

3, Tesla Disappoints With Guidance, Cuts Workforce by 7%

Tesla (TSLA), 4-Hour Chart Analysis

While it held up very well during the recent tumroil in the stock market, Elon Musk’s crown jewel, Tesla (TSLA) has been down by as much as 8% today in pre-market trading after warning investors that the electric car maker will likely turn a smaller-than-expected profit in the coming quarter. Tesla is struggling to ramp up the production of the Model 3, while also facing difficulties to hit its cost goal with regards to its “mass” product.

With the traditional car makers slowly but surely closing in on the company, and given the looming cash flow issues, the coming quarters will crucial for the Musk. The company just avoided bankruptcy in its early days, and some bears think that the fierce competition and the production issues could lead to a crisis yet again. The company’s workforce skyrocketed in recent years, and today CEO Musk also announced that it will lay off 7%, approximately 3000 workers, to cut costs after the expansion. He stated that,

“We unfortunately have no choice but to reduce full-time employee headcount by approximately 7%, we grew by 30% last year, which is more than we can support, and retain only the most critical temps and contractors (…)”

While today, earnings reports will be few and far between, Netflix (NFLX) will also be in focus after reporting yesterday in after-hours trading, and for now, the streaming giant is also trading lower despite the broad overnight rally in stocks.

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 443 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

Stellar Price Analysis: Grayscale Announces XLM Based Trust; XLM/USD Stuck Within Bearish Structure

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  • Global digital asset management firm, Grayscale, has announced an investment vehicle based around XLM.
  • XLM/USD is moving within the confinements of a bearish pattern structure, subject to a breakout south.

XLM/USD has been subject to very narrow and choppy trading, which has been going on for the past eight sessions now. Price action is moving within a range-block formation, which is seen across the board with several of its peers. This type of behavior does indicate of some potential vulnerabilities to the downside.

The current consolidation mode taken up came into play after a prior period of range-trading, which saw a deep breakout on 10th January. XLM/USD had plummeted by a hefty 20% to its lowest levels seen since 17th December. Despite the mid-December bull run, which was seen to the end of the month, it has not escaped the bear market. Therefore, bull rallies continue to be sold with some force by the bears.

Grayscale Stellar Lumens Trust

Grayscale Investments, a global digital asset management organization, has announced the launch of an investment vehicle based on Stellar Lumens (XLM). This is aimed at giving investors exposure to the cryptocurrency XLM. It is the sixth largest by market cap, just over the $2 billion mark, at the time of writing.

The asset management company tweeted via their official account, “We are excited to announce two big developments! First, today marks the launch of Grayscale Stellar Lumens Trust! Investors can now gain exposure to the price movement of XLM through a traditional investment vehicle.”

Grayscale’s Managing Director, Michael Sonnenshein, noted that this Stellar product that they have introduced was brought in on the back of investor demand. Furthermore, he details that Grayscale’s push to offer investors exposure to “established blockchain projects with substantial traction and resources.” Sonnenshein lastly concluded by noting he is bullish on Stellar and the real use cases that it brings.

Technical Review – XLM/USD

XLM/USD daily chart. Price action is moving within triangular structure.

Price action is currently moving within a triangular pattern structure. XLM/USD has been trading within this since the start of December. The lower support was tested to the downside on 14th December at around $0.094000-$0.093500 prior to the big bounce. Life kicked back into the bulls, forcing the rally up to the tracking resistance, around $0.131500. Furthermore, the pattern has further been confirmed, with several tests to the lower and upper acting trend lines.

Lastly, in terms of the described structure, it can also be perceived as a bearish pennant formation, which again point to downside. Support is currently tracking around the $0.107000 area, and a failure to hold will see the December low retested to the downside, $0.093500. Immediate resistance can be observed at $0.120000-$0.1215000.

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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4.6 stars on average, based on 110 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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