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Analysis

Cryptocurrencies Still Not Going Anywhere as Volatility Disappears

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The most valuable coins are still trading in very narrow ranges today, as last week’s correction still dominates the market, although the low volatility environment more resembles a continuation pattern than a pause before another leg lower.  “Never short a dull market” is an old but reliable truth of trading, and the long-term charts are also pointing to a bottoming process for Ethereum and Bitcoin.

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Litecoin already continued its bull market after the correction, in fact, it got close to a long-term target, while Dash also broke out to new highs this week, before entering a short-term correction. The other majors are yet to make a significant move, so let’s how their charts shape up before the weekend.

Bitcoin

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BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to be glued to the $2600 level that has been the value area of the whole week, and although the coin seems more bullish than Ethereum, having broken the declining short-term trednline, it hasn’t given a clear buy signal yet. The $2450 is the primary support, and the currency remains neutral between the two crucial levels and according to the MACD indicator as well.

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum’s trading range narrowed down to a few Dollars in the last few days, leaving the dominant short-term consolidation pattern intact. The BTC pair is also in correction mode, trading slightly above the 0.10 level, still below the declining short-term trendline. Volume is also progressively declining since last week’s wild moves, and short-term traders are still advised to wait before entering new positions.

ETH/BTC, 4-Hour Chart Analysis

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin retraced its break-out after getting very close to the range extension target, as it pulled back towards the $50 level as expected. The current environment is not supportive of strong momentum moves, and that could mean a choppy short-term correction for the coin, with the MACD indicator still clearly in a move lower from overbought territory.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash’s break-out got stopped by the first target near $220 so far, and the coin is re-testing the $200 level as we speak. The long-term picture remains bullish but a move below primary support could set up a move to $185-$190, the previous short-term resistance zone, and a resumption of range trading in the generally slow environment.

Ripple

XRP/USD, 4-Hour Chart Analysis

Both of Ripple’s charts are unchanged since our previous report, and the long-term ranges remain intact, as trading volumes of the currency collapsed. Short-term traders are still advised to wait with new positions and hold on to their existing longs, as the long-term setup remains unchanged, and the currency is now in a close to two-month long correction.

XRP/BTC, 4-Hour Chart Analysis

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

ETC remains in a volatility compression pattern, similarly to most of the other majors, with low trading volumes since last week’s major moves. The $18 resistance is still int eh center of attention, and a move above that level would set up a test of the $23 high, while a dip below $16 could mean a move back to the primary support at $14.5, although the long-term picture is still clearly bullish for the currency.

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4 Comments

4 Comments

  1. Ritesh Sheth

    July 7, 2017 at 8:47 am

    Mate is it gonna go up or down? Any suggestions please. So that we can catch some missed boats.

    • Brandon010

      July 7, 2017 at 1:51 pm

      I agree with this one ! If up than further up is possible and if down a further down is possible…

  2. magicnipples

    July 7, 2017 at 1:25 pm

    hello, do you plan to write something about WAVES today?

    • Mate Cser

      July 7, 2017 at 2:03 pm

      Hello, yes, analysis coming up in less than an hour

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Analysis

Daily Analysis: Dow Leapfrogs 23,000 as IBM Beats Estimates

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2560 0.13%
DAX 13043 0.35%
WTI Crude Oil 52.02 0.29%
GOLD 1284.00 -0.23%
Bitcoin 5435 -3.15%
EUR/USD 1.1793 0.23%

IBM surged higher today, as the company beat analysts’ expectations across the board, pushing the company’s shares up by more than 10% and helping the Industrial Average to a new all-time high yet again. The other major US indices kept on grinding higher as well for most of the day, despite the strong overvaluation, with the Volatility Index (VIX) still hovering around the 10 level. The NASDAQ and the S&P 500 finished virtually unchanged after a late-session sell-off, while small caps outperformed in the mixed environment.

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DOW 30 Index, Daily Chart Analysis

Global stocks also edged higher, with the Nikkei still leading the way, although the momentum of the move is still weak. The Yen’s weakness was the most apparent trend in currency markets, while the Pound rebounded well, despite the persistent Brexit worries, with the Dollar giving back some of its recent gains compared to its major peers. Gold also remained under pressure after retreating back below $1300 this week, while crude oil rallied on a bigger than expected, hurricane-related decline in US production.

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Gold 4-Hour Chart Analysis

Cryptocurrencies

The major coins had a hectic and bearish session, especially in early trading, as Bitcoin’s overbought conditions coupled with Ripple’s sudden downturn led to a segment-wide decline. Ethereum continued to slip, as the Byzantium-related optimism faded away, but it remained well above the $285 level, and recovered above $300 towards the end of the session. NEO and IOTA still have a negative correlation with the rest of the market, as the two coins surged higher in early trading and gave back their gains during the late-day rebound.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The DAX closed on a marginal new all-time high again, but the lengthy momentum divergence in the MACD indicator suggests that the steep uptrend continues to be in jeopardy. The low-volatility drift carried the benchmark above the 13,000 level, but a correction towards at least the 12,850 level is likely in the coming days, with another support level at 12,650 serving as a longer-term target. As the long-term uptrend is clearly intact, bears shouldn’t go all-in here but bulls should consider exiting their positions and wait until a correction to trade the long side again.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
3:30 EUROZONE Mario Draghi Speaks
3:30 UK Average Earnings 2.2% 2.1% 2.1%
14:30 UK Claimant Count 1,700 3,200 -2,800
14:30 UK Unemployment Rate 4.3% 4.3% 4.3%
16:00 CANADA Manufacturing Sales 1.6% -0.1% -2.6%
14:30 US Building Permits 1.22 mill 1.25 mill 1.27 mill
16:00 US Housing Starts 1.13 mill 1.18 mill 1.18 mill
15:45 US Crude Oil Inventories -5.7 mill -4.7 mill -2.7 bill

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
2:30 AUSTRALIA Employment Change 15,200 54,200
2:30 AUSTRALIA Unemployment Rate 5.6% 5.6%
4:00 CHINA GDP 6.8% 6.9%
4:00 CHINA Industrial Production 6.4% 6.0%
10:30 UK Retail Sales -0.1% 1.0%
14:30 US Unemployment Claims 245,000 243,000
14:30 US Philly Fed Index 22.2 23.8
15:45 US Chicago PMI 58.6 58.9

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Analysis

Technical Analysis: Bitcoin Dumps and Pumps amid Broad Volatile Correction

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The crypto segment has been in turmoil today, as the most valuable coins turned significantly lower, leading to a mini-panic, but they rallied strongly off their slows as buyers stepped in the second half of the session.

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Bitcoin fell as low as $5100, for a 15% correction top-to-bottom, but it is now trading near the prior short-term support at $5400. As the long-term picture remains overbought, investors shouldn’t open new positions here, but traders could play a likely move towards the $6000 level, although we still advise small sizes, as correction risks remain elevated.

BTC/USD, 4-Hour Chart Analysis

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The other majors were also declining in early trading, led by Ripple, with only NEO and IOTA, holding up well during the sell-off.  Both of the latter coins faded away as the rest of the market recovered, but Ripple continued to suffer. For now, the long-term bullish picture is unchanged for the segment, but BTC’s overbought correction could still cause volatility in the coming period. Let’s see the short-term charts after the busy session.

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Analysis

Daily Analysis: Dollar Rally Continues amid Fed Chair Confusion

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2554 -0.09%
DAX 12995 -0.07%
WTI Crude Oil 51.53 -0.66%
GOLD 1287.00 -1.22%
Bitcoin 5652 -0.86%
EUR/USD 1.1751 -0.38%

Yesterday’s trends are mostly continued in financial markets, such as the low-volatility levitation in stocks and the slightly more active trading in currencies with the apparent Dollar strength. The Great British Pound continued to be under pressure amid the amplified Brexit-related worries, but most of the other majors also lost ground to the Greenback.

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The Dollar rally has been fueled by the rise in the odds of some of the hawkish Fed Chair candidates, while overall, the “race” for the positions looks more chaotic than ever. Interestingly, the long-end of the yield curve is refusing to follow the short-term moves, and without the effects of the Fed’s QE program, the yield curve would probably be inverted by now, signaling strong recession risks.

Dollar Index (DXY), 4-Hour Chart Analysis

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The major stock indices are virtually unchanged yet again and even the previously surging Nikkei entered a consolidation, adding to the unusual October lull. Commodities have been quite active thanks to the Dollar’s vigor, with crude oil and gold both turning lower. Oil gave back most of yesterday’s gains as the Iraqi-Kurdish conflict turned out to be less violent than previously feared, and the brief rally fizzled.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The major coins are having a mixed session at best, as yesterday’s rebound wasn’t durable, and most of the coins turned back lower again. That said, despite the recent choppy price action, the total market cap of the segment is close to its all-time high, even as only Bitcoin is trading near its own record price level.

The optimism regarding Ethereum major Byzantium upgrade wasn’t enough to lift the second most valuable coin today, and the price of the ETH token retreated below the key $330 level after touching $350 yesterday after the upgrade’s lock-in. Ripple and NEO have been among the most active majors today, but with opposing performances, as Ripple fell significantly after yesterday’s break-out attempt, while NEO defied gravity and jumped above the $30 level after a corrective period.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The S&P 500 is grinding higher despite the overbought short-term momentum readings, and the benchmark is trading very close to its all-time high. The 2550 level is still in focus, but until volatility remains near record lows, the minuscule moves are unlikely to change the technical setup. While a sudden drop in prices could quickly negate the recent break-out, the consolidation could very well lead to further upside, as bulls remain firmly in control, despite the lofty valuation levels.

S&P 500 Futures, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
02:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.00% 3.00% 2.90%
11:00 GERMANY ZEW Sentiment 17.6 20.3 17
12:00 EUROZONE Final CPI 1.50% 1.50% 1.50%
15:15 US Industrial Production 0.30% 0.40% 0.20%
15:15 US Capacity Utilization Rate 76.00% 76.20% 76.10%

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