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Analysis

Crypto Update: Oversold Bounce or Reversal?

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The major cryptocurrencies are in the no-mans-land this weekend, as although yesterday’s positive divergences led to a broad oversold bounce in the segment, the coins are not out of the woods yet, with major resistance levels still towering ahead.

Bitcoin is still clearly leading the way for the top digital currencies, as correlations remained on a high level despite the bounce, still suggesting at least further consolidation before a durable rally.

BTC/USD, 4-Hour Chart Analysis

All that said, the most valuable coin is still hovering around the key $9000-$9200 zone despite the spike to $8400 on Friday, and a successful re-test or a higher low could lead to a short-term buy signal in the coming days after the deep correction. In case of a rally, the $10,000 level is the next hurdle, with further resistance at $10,500 and $11,300.

LTC/USD, 4-Hour Chart Analysis

For the recovery to resume, a clear leadership should emerge, breaking the correlation between the coins. For now, only Litecoin is showing clear signs of strength, as it stayed above the previously dominant declining trendline and rallied back above $180 afterward.

The coin is now on both short- and long-term buy signals in our trend model with resistance ahead at $200, between $225 and $235, and at $250, while key support below $180 is at $170 and $150.

Altcoins Still Mostly Bearish

ETH/USD, 4-Hour Chart Analysis

Ethereum is trading very similarly to Bitcoin, although on a bearish note, the coin is struggling to get back above event the first major resistance zone near $740 since the Friday mini-panic.

Short-term traders should still wait with opening new positions, but long-term investors could add to their holdings. Support is now found between $625 and $640, while further resistance is ahead at $780 and $845.

With only Monero trading above the broad declining trendline besides LTC, short-term traders should remain defensive here, as Ethereum Classic and Ripple failed to build up momentum after showing early signs of strength.

Dash has also been encouraging since yesterday’s bottom, but given the very narrow leadership, the market needs more healing before the correction could be considered done.

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 444 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

3 Things You Need to Know About the Market Today

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1, Chinese GDP Growth Slows to Multi-Decade Low

Shanghai Composite, 4-Hour Chart Analysis

When even the strongly PR-optimized Chinese economic releases are showing severe weakness, it’s not at all surprising that the local stock market is in a deep bear market, and even the explosive oversold rally on Wall Street combined with the trade optimism of last week is not enough to meaningfully change the technical setup.

While economic growth slowed to an almost 30-year low on a yearly basis, retail sales and industrial production beat the consensus estimates by a hair, but that wasn’t enough to cause a material rally in equities, with the global sentiment leaning slightly bearish. This week’s most important question will be how risk assets will hold on to their recent gains, with a special attention on China and Europe, which continue to lag behind the US from a technical perspective.

The Shanghai Composite is more than 30% below its bull market highs, while the main European benchmarks are also around 20% below their respective highs, and that’s following one of the strongest short squeezes in history on Wall Street, mind you. The next few days could be crucial for markets, and we now advise caution even for short-term bulls.

2, Stocks Retreat after Friday Ramp with Wall Street Closed

German DAX 30 Index, 4-Hour Chart Analysis

Looking at Europe, the major indices failed to extend their gains from Friday, while US stock futures are also modestly lower after the European close. With the US markets being closed in observance of the Martin Luther King Jr. Day, trading volumes and activity has been predictably low, and things will likely get heated tomorrow, as the earnings season will also continue.

Johnson & Johnson (JNJ) and IBM (IBM0 will report earnings tomorrow, and all eyes will be on their overseas numbers and guidance amid the global economic slowdown. We had some negative reports regarding the US-Chinese trade talks, concerning the sensitive issue of Intellectual Property, and we still think that even though an agreement is likely in the coming months, implementation and enforcement will be borderline impossible.

3, Oil Tests December High

WTI Crude Oil, 4-Hour Chart Analysis

While risk assets, in general, had a slightly bearish half-session crude oil kept on pushing higher following Friday’s move to new correction highs, with the WTI contract entering the resistance zone that capped the December consolidation. The crucial commodity, which has been slightly lagging US stocks from a technical perspective is still squeezing late shorts, but we expect a short-term top very soon, possibly after a stop hunting rally above the $55 per barrel level.

What’s sure, is that we wouldn’t be buyers at these levels, even in light of the OPEC production cut, since over-supply remains a major issue, and the increase in US output continues. That said, the short-term uptrend is intact and the topping process could take a while, but we will keep a close eye on the day-to-day price action following the 25% rally off the December lows.

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 444 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

Crypto Update: 5 Altcoins to Watch This Week

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Four out of five of the altcoins that we included on last week’s list moved within our expectations. Ethereum (ETH/BTC) and NEM (XEM/BTC) have managed to stay above key support areas. In addition, Binance Coin (BNB/BTC) and 0x (ZRX/BTC) have maintained their bullish tone. Only Bitcoin Gold (BTG/BTC) disappointed as the market took out its key support.

For this week’s edition, we look at altcoins that are prime candidates for buying on dips. Here are the five altcoins to watch this week.

TRON (TRX/BTC)

TRON started the year on a high note as it breached 0.0000056 resistance on January 3, 2018. This triggered a strong rally that sent the market to as high as 0.00002047 on January 5, 2018. Although the market has been correcting since, we now have an idea where TRON might be headed. A look at the 12-hour chart shows that it is forming a falling wedge.

TRX/BTC 12-hour chart

If our read is correct, TRON might bounce off 0.0000056. This would allow the market to flip the resistance into support. Otherwise, a move below this level will likely send TRON down to 0.0000045.

Steem (STEEM/BTC)

Steem had a strong week as it rallied from near the range low of 0.0000675 on January 14, 2019 to take out the range high of 0.0001 on January 18. The market then flipped the resistance into support on January 20. This is awesome bullish price action.

However, the market looks overextended as the 12-hour RSI is flashing a bearish divergence. This should give you the chance to buy on dips.

STEEM/BTC 12-hour chart

If the market corrects, you can rely on the 200-MA on the 12-hour chart as a possible bounce area. Should the market move below the indicator, it has a support level at 0.0000888.

WAVES (WAVES/BTC)

To say that Waves ended 2018 strong would be an understatement. It grew by over 400% rallying from the low of 0.0002336 on November 21 to as high as 0.001209 on December 19. The market has been pulling back since. However, we are starting to see signs of a possible bounce.

Currently, Waves appears to be finding support at 0.0006842, which is the 61.8% Fibonacci level of our range. Also, the market has printed a double bottom pattern on the shorter time frames. Plus, we can see a bullish divergence on the 12-hour chart.

WAVES/BTC 12-hour chart

A bounce at the 61.8% Fibonacci level might send Waves all the way up to the range high of 0.0009645. Otherwise, it might fall back to the range midpoint of 0.0005979.

Dash (DASH/BTC)

Dash is one of our two bottom picking targets this week. It is currently creating a falling wedge on the 12-hour chart. It appears to be on its final wave down.

DASH/BTC 12-hour chart

If our read is correct, Waves will establish a bottom around 0.016. Put tight stops if you’re planning to go long on the market because there’s no known support below 0.016.

Wanchain (WAN/BTC)

Our second bottom-picking target is Wanchain. Just like Dash, it is forming a falling wedge on the 12-hour chart. It also appears to be on its last leg down.

WAN/BTC 12-hour chart

We expect Wanchain to bottom out at 0.0000775. Use tight stops as well if you’re considering to bottom pick Wanchain. Similar to Dash, WAN/BTC has no known support below 0.0000775.

Bottom Line

While Bitcoin continues to trade sideways, this gives many altcoins the opportunity to pump. TRON, Steem, and Waves have done so and that’s why we’re looking at them this week. On the other hand, Dash and Wanchain appear ready to bottom out. As always, use tight stops when buying on dips.

 

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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3.8 stars on average, based on 311 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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Analysis

Brent Crude Continues Rising

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

Brent recovered to the levels it last reached on December 7. Today, on Monday, January 21, 2019, the instrument is trading at $62.77 USD and tending to keep this positive momentum.

Over the last week, there were a lot of different and sometimes even opposite signals, but investors chose the ones more favorable to the bulls and oil prices started moving upwards. The US Department of Energy reported that Crude Oil Inventories declined slightly, but both distillates and gas increased significantly. While the refinery utilization declined, the oil extraction went up to 11.9M bpd (+200K barrels per week), which means that rather high oil prices (in comparison with December) are pretty comfortable for shale producers.

At the same time, numbers from Baker Hughes published last Friday weren’t really impressive. The Oil Rig Count was 852 units as the indicator lost 21 units. In the case of gas, the corresponding indicator lost 4 units. In total, the number of rigs in the USA decreased by 25 units and right now equals to 1,050 units.

Why does the indicator go down? Most likely, oil producers aren’t really sure that oil price movements over the last 5 weeks indicate a trend reversal instead of a long-term correction. As such, they turn patient and watch market developments unravel.

The USD got stronger a bit last week, but its behavior doesn’t seem to worry oil investors too much so far.

To more clearly see what is happening to Brent, one has to look at the daily chart. It can be seen that the candlestick of December 26th, 2018 formed Engulfing pattern and started a new correction to the upside. In addition to that, there was a convergence on MACD, which indicated a possible pullback. The price is getting closer to the retracement of 38.2% at $64.30. The next target is the retracement of 50.0% at $68.55.

The H4 chart shows a stable uptrend. However, it should be noted that after breaking the previous high the price may start a new pullback towards the support level at $61.50. Later, the instrument is expected to form a new rising impulse with the target at $65.60.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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 23 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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