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Crypto Update: Lisk’s Bearishness Hides True Trend

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Many avid cryptocurrency traders have taken Lisk off of their watchlist (LSK/BTC) and for good reason. The pair has plummeted like a shooting star crashing down the surface of the planet. From the high of 0.003398 on February 10, 2018, LSK/BTC is down below 0.00043 today. The pair’s fall wiped out almost 90% of its value.

Nevertheless, long-term investors shouldn’t be worried. As bearish as Lisk looks, we are convinced that it is not yet ready to go the way of the dinosaurs. On the contrary, LSK/BTC is flashing signals that it is about to come back to life soon. If it does, it will confirm our assumption that Lisk is currently range trading.

Lisk is Locked in a Wide Trading Range   

If you’re an experienced technical analyst, then one of the things that you probably do is map out key areas of support and resistance. This helps you determine the overall trend of the market. It is then easy to come up with a strategy once you establish the trend.

We performed these steps in our analysis of Lisk and the charts showed us that the pair is range trading when looking at it from a long-term perspective.

Weekly chart of LSK/BTC

LSK/BTC is locked in a wide trading range. The bottom of the range is support of 0.0004, the middle is 0.0016, and the top end is 0.0032. The market has been trading within this range since May 2017.

The “smart money” investors buy the bottom of the range. You can see this as volume spikes whenever the pair drops to this level. This tells us that they accumulated enough positions to influence market movement. As soon as they are ready, they spark a rally and constrict supply to inflate market price. Then, they wait for the top to start distributing positions.  

Volume differences in the daily chart of LSK/BTC

The “smart money” investors are very likely to repeat the process once LSK/BTC hits the bottom end of the range. We see that process developing right now.

Breakout from a Falling Wedge

Lisk is fond of falling wedges. Between June and December 2017, the pair broke out from three falling wedges as it range traded between 0.0004 and 0.0016. This appears to be the pattern used by “smart money” investors to distribute positions and keep prices from climbing further.

Fast-forward to today and we see that LSK/BTC has created another falling wedge on the daily chart.   

Daily chart of LSK/BTC

What’s interesting is that the apex of the falling wedges always formed around the bottom end of the range at 0.0004. This usually sets up the market for a bounce and a breakout that sends the pair to the midpoint of the range.

We believe that the market is repeating the same process today. LSK/BTC is in extreme oversold territory on the daily RSI. On top of that, the stochastics are respecting support of 3.08. This support has never been breached. The market may linger on this level but it always bounces. This tells us LSK/BTC can only get stronger from this point.

Bottom Line

LSK/BTC may have lost over 90% of its value from the high of 0.003398, making the market look ultra bearish to many investors. However, technical analysis from a long-term perspective show that the pair is currently range trading. Breakout from the current falling wedge should confirm this assumption.

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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3.7 stars on average, based on 265 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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5 Things To Watch Next Week + ChartBook

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Third Time is the Charm for the Dollar?

Dollar Index, 4-Hour Chart Analysis

The Greenback had a nervous week, as the midterms and the Fed meeting were both high-risk events for the reserve currency. The outcome of the elections was in line with expectations, and although the political gridlock is slightly negative for the Dollar, given the recent economic trends and the widening rate differential with its most important peers, the USD’s long-term rising trend still seems safe.

From a technical perspective, the Dollar index looks ready to test its recent highs just above 97, and while a break-out is not guaranteed, Dollar shorts are being squeezed and another leg higher would cause a lot of pain in the investment community.

A move above 97 could set up a rally up to 100, with a possible test of the 2016 highs. A trade deal with China followed by a strong risk rally is the biggest risk here for Dollar bulls, but barring an agreement, the rising trend could continue in the coming months.

Oil Ready to Bounce?

 WTI Crude Oil, 4-Hour Chart Analysis

Oil completed the drop below the $60 per barrel level in the WTI contract that we have been expecting, despite the two-week rally in equities. The Dollar strength towards the end of the week gave another boost to the selloff, and the crucial commodity reached a deeply oversold stance with regards to momentum.

Oil entered a bear market recently, but given the stretched technicals, a short-covering rally will likely start soon, burning the late shorts and resetting investor sentiment. Obvious targets for the likely move are the $63 and $65 resistance levels, while the next major support zone is found around the $54 per barrel price level.

The Perfect Short or a Post-Election Santa Claus Rally?

Nasdaq 100 Futures, 4-Hour Chart Analysis

Should the US market follow China and most of the emerging markets into a bear market the current setup is what technical analysts call the perfect short, or in other words the first complex correction in the developing downtrend. There are still contradicting technical signs on Wall Street, but most of the trends point to at least a lengthy healing process even if the longest bear market in history will resurrect once more.

Besides the bearish worldwide trends, peaking earnings, the persistent weakness in small-caps, the horrible market internals, and the Nasdaq’s lackluster performance are the most important negatives here, while the still robust economic growth, the baseline election outcome, and the possibility of a Chinese trade deal could be considered bullish.

Also, the Dow and the S&P 500 got relatively close to their all-time highs during the recent rally, but Friday’s decline could already morph into something bigger next week.

A Chinese Deal Could Define the Coming Months

Shanghai Composite Index CFD, 4-Hour Chart Analysis

Despite a brief period of relative strength and the trade deal hope the Chinese stock market is still nothing short of disastrous from a technical standpoint, and the Shanghai Composite is in a clear long-term downtrend. The bounce that started almost a month ago failed to carry the index back above the key resistance levels, and there is no technical evidence of a looming trend change.

The Chinese Yuan also gave back its initial gains, and now, the weak macro trends and the bearish technicals are back in charge. That said, an agreement between the two countries could cause a major short-covering rally, even if it will likely not be enough to stop the bear market which is likely primarily caused by the end of the historic credit cycle in the country.

Employment Reports, Retail Sales, and CPIs Highlight Economic Calendar

We will have a busy week with regards to economic releases, with especially the Great British Pound, the Dollar, and the Australian Dollar being in focus. The US CPI (Wednesday) and Retail Sales (Thursday) reports will be closely watched globally, and after the slightly hawkish Fed statement, risk assets could be in pressure should the CPI beat the estimates similarly to the PPI.

Analysts expect a price increase of 0.3%, with the core measure of 0.2% while Retails Sales are forecast to surge by 0.6% and 0.5% respectively. In Europe, the British Employment Report and the German ZEW index will come out on Tuesday, while the British CPI and the flash Eurozone GDP are scheduled for Wednesday, with the British Retail Sales coming out on Thursday.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 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 392 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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Stellar Price Analysis: XLM/USD Continues to Head for the Stars

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  • XLM/USD bulls resume upward trend, having gained another 8% over the past two sessions.
  • Cryptocurrency wallet provider Blockchain is to host Stellar Lumens (XLM) airdrop worth $125 million.

Stellar’s native token Lumens is notablly outperforming several of its peers. XLM/USD has seen its firm move north has continued, with the price gunning towards the $0.3000 mark. As a recap, the bulls exerted pressure to the upside, which forced a firm breakout from a triangular pattern formation. This resulted XLM/USD moving into an explosive short-term bullish trend.

The price ran higher between 4-6 November, gaining over 16%. For the next three sessions after this, the price cooled, between 7-9 November. This was a move which was very much in line with the rest of the market. It appeared profit-taking kicked in, given the fast and explosive gains. The bulls are back on the move within the past two sessions.

Recent Stellar News Flow

Cryptocurrency wallet provider, Blockchain, will be hosting what they say is the “largest crypto giveaway in history.” They will be dispersing $125 million worth of the Stellar Lumens, to Blockchain wallet holders, that choose to sign up for the airdrop. It is offering $25 of Stellar Lumens (XLM) for free to its 30 million users, a move to encourage new users and ever so slightly assist towards the greater goal of mass adoption.

The Blockchain CEO had reported that the company is working with the Stellar foundation partly because he believes it represents a superior blockchain capable of massive transaction volumes. He added that the airdrop is designed to “put users first” and allow them “to test, try, trade and transact with new, trusted crypto-assets in a safe and easy way.”

Technical Review – XLM/USD

XLM/USD daily chart

XLM/USD over the past two sessions now is running at consecutive daily gains. Bulls having gained over 8% at the time of writing, between 10-11 November. This demonstrates the strength of the current bullish trend, which had commenced on 31st October. Technically, the market accommodated a small pullback, as mentioned in the prior article before resuming its move north.

Upside Targets

There was some sticky resistance seen around the 50% Fibonacci, but the bulls having made a firm clearance of that now in latest move. The next near-term challenge is seen at the 61.8% Fibonacci, around $0.2830. This was the high area for 21st, 23rd and 24th October, where the price faltered on each of those occasions. A breakdown will likely open the door for the $0.3000 return.

Should XLM/USD bulls manage to firmly conquer the $0.3000 price region, there doesn’t appear to be too much in the way of $0.5000. During the chunky market sell-off seen in April, XLM/USD ran straight through from $0.5000 down to the $0.3000 territory, leaving little in the way of technical observation within the $0.4000 region.

Overbought Dangers

Despite all noted above, it is worth considering the RSI’s behavior. On the daily time frame, the RSI is again approaching the 70 territory. At the back end of July and September XLM/USD saw a steep sell-off. Given the recent surge in price action higher within a short time period, it still leaves XLM/USD vulnerable.

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 44 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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XRP Price Analysis: Largest Bank in Japan, MUFG Bank, Set to Utilize Ripple Technology

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  • Japan’s largest bank MUFG will be collaborating with Brazilian bank, Banco Bradesco, leveraging Ripple technology for payments between Japan and Brazil.
  • XRP/USD technical bullish formation eyed (a pennant pattern on the daily chart view) subject to a breakout.

It was reported last Friday that the largest bank in Japan, MUFG Bank, will be utilizing Ripple’s technology. MUFG Bank and one of the largest banks in Brazil, Banco Bradesco, announced signing a Memorandum of Understanding. They will be collaborating to develop a new cross-boarder payment service, which will leverage Ripple’s technology between Japan and Brazil. It is anticipated that they will be using Ripple’s xRapid, which requires the use of XRP,  to facilitate with the transactions overseas between the two countries.

Ripple announced via their Twitter account“@Bradesco and @btmu_official are leveraging Ripple’s #blockchain technology to create a new cross-border payment service between Japan and Brazil.”

Ripple continue to add large financial players to their ever-growing list of users on their network.  It was only reported at the back-end of last month that the National Bank of Kuwait (NBK), one of the largest banks in the Middle East, is actively testing and readying to go live with Ripple’s xCurrent payment solution.

Technical Review – XRP/USD

XRP/USD daily chart

XRP/USD over the past two sessions is moving back higher, after a chunky cooling in the price was seen. On 6th November, XRP/USD ran up to its highest level that was seen in around 6 weeks, moving just above $0.5700 mark. This was part of a 30% gain, which commenced after bouncing off support on 31st October. The bulls then ran into some near-term resistance, an upper trend line, that has formed a bullish pennant pattern. As a result, then price eased lower for two sessions, dropping just over 10%, during that period.

Upside Targets

Looking to the upside, should the bulls continue this pick seen going on two sessions now, a retest of the pennant will likely be seen. The above descending trend line is now currently tracking at $0.5500. A breach here could see a fresh wave of bull buying, initially with a firm move above 6th November high at $0.5705. Ultimately, a breakout from this mentioned pattern, could see a fast move back into the $0.6000 territory. XRP/USD last traded here on 1st October, before running into sellers.

Support Levels

If the technical set up as described above fails to play out, then there are key areas of support that must be looked at. Firstly, the lower part of the pennant pattern, which is observed at $0.4700. This is also in proximity to a demand area, running down to $0.4400. Any failure to provide comfort at the mentioned, then it could be disastrous. XRP/USD could be forced to free-fall back down below the $0.3000 territory. The price was last traded down here on 18th September, when it had entered into a strong bull run.

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 44 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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