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Analysis

Cryptocurrencies Mixed as Litecoin Hits Highs and Nears Targets

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The major coins dipped lower after a promising start on Tuesday, as momentum remained weak in the low volume environment. Litecoin hit a new high in early trading, while NEM and Dash were also relatively strong, with Ethereum still being stuck below $300 and Bitcoin trading near the $2600 level throughout the week. Today’s session might be a crucial one after the 4-day low volume period, and the next significant move could define the sentiment of the week, while also turning the tide on the long-term charts.

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Bitcoin

BTC/USD, 4-Hour Chart Analysis

Bitcoin is trading in a very narrow range near $2600, as volatility declined considerably during the weekend, while correlations broke down between the two majors and the rest of the coins, signaling the end of the liquidation period. That said, the declining short-term trendline is still close to the current rate, and the most valuable cryptocurrency might be in for more sideways price action, before the Judgement Day of BTC in August.

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Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum has been acting week throughout the weekend and the Independence day holiday, and the coin is still trading below the $275 level and the declining short-term trendline, while several of the smaller coins are already in short-term uptrends. The currency remains in a neutral short-term trend above the $250 level, while a dip below that support could open up the way to $230 or a re-test o the lows near $200.

ETH/BTC, 4-Hour Chart Analysis

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin is still hitting new highs, reaching the $55 level overnight and getting close to our range-projection target near $58. The coin remains well inside the rising long-term trend, but we suggest to reduce their long positions near the $58-60 zone, as a more pronounced consolidation phase could follow the 90% rally since the break-out at $32. The MACD indicator is getting close to oversold territory, also favoring caution, and opening new positions at this level is not advised.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is still looking bullish although yesterday’s rally halted near the primary resistance at $190 once again. The prior highs at $200 could be tested in the coming days, and a break-out to new highs is likely, with target levels at $217 and just above the $250 level. A break below $160, on the other hand, would signal a bearish change in the short-term trend, with further strong support near $150 and below that at $140.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple remains inside the dominant trading ranges, showing some relative strength compared to Bitcoin and Ethereum this morning. The long-term setups are unchanged in both the BTC and the USD pairs, and we still advise short-term traders to wait for a move before taking on new positions, while long-term investor could still accumulate XRP inside the consolidation patterns.

XRP/BTC, 4-Hour Chart Analysis

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

ETC has gone through a volatility compression during the weekend and the July 4th period, with very small movements in the recent days, hovering around the $17.50 level. The declining short-term trendline is still intact and before a move above that, the coin remains neutral, while a dip below the $16 support would be a bearish turn and could signal the re-test of the $14.50 zone.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero has been trading similarly to ETC in the last few days, being stuck below the short-term declining trendline and a volatility compression pattern following the strong moves of the last week. A move above the trendline resistance at $47.50 would trigger a new buy signal, and a possible test of the $58 high, with the short-term picture still being neutral.

NEM

NEM/BTC, 4-Hour Chart Analysis

NEM surged back to its long-term base formation yesterday but the rally halted near the declining trend line once again, and although the weekend move is encouraging, the short-term picture is neutral. A move above the 0.000075 level would provide a new buy signal after the long correction period.

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8 Comments

8 Comments

  1. Winklevoss

    July 5, 2017 at 9:58 am

    Typo ‘Ether below $3000’.

    • Edward Talliot

      July 5, 2017 at 11:58 am

      Thank you. Fixed!

  2. Carl

    July 5, 2017 at 3:47 pm

    Thoughts on ETC as a good long term hold?

    • Mate Cser

      July 5, 2017 at 3:52 pm

      Hello Carl, yes it is in my long-term portfolio, although with relatively small weight.

      • Carl

        July 5, 2017 at 3:54 pm

        Awesome… same here! thanks for the feedback 🙂

  3. [email protected]

    July 5, 2017 at 6:06 pm

    Hi Mate, you recommend selling LTC around 58 then we can buy back at lower later? What should be the buy back price you can recommend?

    • Mate Cser

      July 6, 2017 at 7:16 am

      Hi, yes, I believe that the coin will revisit $50 a couple of times before moving higher.

  4. Sangerwal

    July 10, 2017 at 2:45 am

    Hi
    Any recommendations on Ethereum and litecoin ? short term and long term?

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Analysis

Bitcoin’s Record-Breaking Rally Continues as Prices Cross $8,100

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Bitcoin surged to new highs on Sunday, as the world’s largest crypto by market cap continued to generate bids following the cancellation of Segwit2x.

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BTC/USD Price Levels

The value of a single bitcoin reached a daily high of $8,110.59, its best level on record. At press time, BTC/USD was valued at around $8,002 for a gain of 4%.

With the gain, bitcoin’s market cap now exceeds $133 billion. That’s roughly $100 billion greater than Ethereum, the market’s second most valuable cryptocurrency.

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Bitcoin has added more than $1,100 over the past five sessions. It was down around $5,600 just one week ago.

Bitcoin Cash (BCH), a digital currency alternative that broke away from the original blockchain Aug. 1, was down 5.1% at $1,185. BTC and BCH locked horns earlier this month after the Segwit2x hard fork was abandoned.

$10,000 and Beyond?

Institutional clearing platform LedgerX has initiated its first long-term bitcoin futures option, which is set to expire Dec. 28, 2018. In setting up the option, LedgerX is assuming a price of $10,000 at the time of expiration. That’s a 25% premium on current levels.

Investors who buy the option are essentially saying they believe prices will exceed $10,000 by the time of expiration.

Bitcoin is being helped by growing institutional demand for the digital currency, as hedge funds, day traders and other mainstream investment outfits look to access this burgeoning asset class. CBOE and CME Group have each announced plans to integrate bitcoin into more conventional investment vehicles in the coming months.

The rush of institutional money into bitcoin is a sure sign that the digital asset class is becoming too big to ignore. The value of all cryptocurrencies in circulation has already exceeded $230 billion, with more than a dozen coins valued at $1 billion or more. Nine others have a market cap of $500 million or greater.

Coinbase Responds

The rise of institutional capital has also compelled Coinbase to introduce a custodial service targeted at account holders with more than $10 million in assets. This service targets hedge funds and other institutions that have remained largely on the sidelines of the crypto revolution.

In a recent blog post, Coinbase CEO Brian Armstrong announced that the new service will launch sometime next year.

“When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely,” Armstrong wrote.

In addition to maintaining the minimum $10 million asset requirement, institutions must pay a $100,000 setup fee to gain access tot he Custodial program. In response, institutional investors will receive assurance that their assets are secure.

The Coinbase Custody website lists broad support for bitcoin, Ethereum (ETH) and Litecoin (LTC), as well as ERC20 tokens. The ERC20 protocol has emerged as the favorite for startups launching initial coin offerings (ICOs), a controversial crowdfunding model that has already overtaken early stage venture capital.

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. 

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Cryptocurrencies

Is Ethereum Ready to Play Catch Up With Bitcoin?

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In mid-June of this year, the difference between the market capitalization of bitcoin and Ethereum had narrowed down to less than $8 billion. This had many market participants excited. They expected Ethereum to dethrone bitcoin as the leader, a move popularly termed as flippening.

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Key observations

  1. Ethereum has hugely underperformed bitcoin
  2. The chart pattern suggests that Ethereum is likely to play catch up in the next few months
  3. Stay on the long side of Ethereum to benefit from the bullish setup

However, fast forward five months and the difference in the market capitalization of the top two cryptocurrencies has increased to about $96 billion. This shows that while bitcoin has raced ahead in the past few months, Ethereum has hugely lagged behind.

However, is the underperformance about to end?

The chart pattern shows that Ethereum is likely to embark on a rally of its own that can carry it to $645 to $670 levels in the next few months. Let’s see how we arrived at these levels.

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Ethereum opened trading at $8.16 on January 1, 2017. It started its rally in March and by June 12, it reached a high of $420, an astronomical rally of about 5047%. Thereafter, it entered a period of consolidation, digesting the gains.

On the charts, Ethereum has formed a large symmetrical triangle, which usually acts as a continuation pattern. The breakout is generally in the direction of the long-term trend, or the trend that was prevailing before the pattern formed. In this case, the sharp move from January to June confirms that the cryptocurrency was in an uptrend before forming the triangle.

However, this is not a fool proof trade because sometimes the symmetrical triangle acts as a reversal pattern. Therefore, the best way to play this trade is to wait for a breakout of the triangle before initiating any trade.

Where can we take an entry?

Currently, the resistance line of the triangle is at about $378 levels, a level close to today’s intraday highs. The bears are likely to strongly defend this level. However, if the bulls breakout of $378 and manage to close above the resistance line, the trade on the long side will set up.

Different traders use different methods to confirm whether the breakout is valid or not. Some wait until price moves 3% above the breakout level, others wait for three consecutive closes above the resistance level.

However, we have observed that the best breakouts never look back, hence, waiting for three days may lead to a missed opportunity. Therefore, we can wait for a closing above the resistance line of the triangle and initiate the long positions on the following day.

The breakout can face resistance at $400 and $420. However, we expect the virtual currency to scale both these resistances and rally towards its pattern target zone of $645 to $670.

Notwithstanding, even the most reliable patterns can fail. Therefore, our stop loss will be kept at $340. We don’t want to hang on to the trade if it falls back into the triangle. We shall raise our stops to breakeven as soon as Ethereum breaks out to new lifetime highs. From thereon, we shall trail the stops higher to protect our paper profits.

Note

The chart pattern suggests a resumption of the long-term uptrend in Ethereum. However, this will not get confirmed until the cryptocurrency breaks out and sustains above $380. Therefore, please initiate positions only on a breakout and close above the triangle. Entering presumptive trades may result in losses.

Featured image courtesy of Shutterstock. 

 

 

 

 

 

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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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