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Cryptocurrency Analysis: Bitcoin Price Tumbles to $7000 as Rally Fizzles

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After the recent surge in Bitcoin reached a euphoric phase, triggering both short and long-term sell signals, the coin finally rolled over today, and quickly fell to $7000 from its all-time high just above the $7500 level. Altcoins haven’t followed the most valuable coin for now as the negative correlation of the majors with BTC remained intact.

Bitcoin is still severely overbought from an investment perspective, and while the short-term rising trend is intact, a possible head and shoulders pattern is forming on the 4-hour chart, which could be first the phase of a deeper correction, with an initial target of $6700. Support levels are still found at $6700, $6000, $5800, and $5400. We advise both traders and investors to wait with opening new positions in Bitcoin.

BTC/USD, 4-Hour Chart Analysis

Ethereum Classic followed through on its break-out, as we expected, and it surged past the key $13.50 level, while Monero also moved sharply higher to test the $100 resistance today. The Other major altcoins are also slightly higher today, but the technical setup is unchanged in case of the rest of the market.  Let’s see how the short-term charts look after the eventful weekend.

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum is still trading near the $300 level, as the volatility in Bitcoin didn’t affect the token’s market substantially. The coin is still trading within the long-term uptrend despite the lengthy consolidation, but the $315 resistance remains strong above the current price level. That said, we still expect a move towards the $330-$350 zone in the coming period, while support is found at $285 and $250.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is also trading in a relatively narrow range around the $56 level, while the coin remained clearly above the $51 support level, despite last week’s altcoin sell-off. The currency is still in an encouraging long-term setup, although the consolidation pattern remains dominant. In the case of a bullish move, targets are found at $64 and $75, while support below $51 is near $44.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is trading in a lengthy correction pattern despite the recent bounce, although the upper boundary of the formation is approaching the current levels. The coin faces strong resistance at $300, but we expect a move above that zone and a resumption of the underlying rising trend soon. Targets for the move are at $330 and $360, while key support is found at $265.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple popped higher slightly today after a low volatility period, but it remains stuck in a range around the $0.2050 level, with still no short-term buy signal being given by the coin. That said, the long-term picture remains bullish, with targets ahead near $0.2250, $0.26 and $0.30. Support is found just below $0.20, near $0.18, and at $0.16.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is getting short-term overbought after the explosive break-out during the weekend, but the clear move above $13.50 is a bullish sign for the coming weeks. After the long period of relative weakness, we expect at least a test of the $16 level during the current move, with further targets at $18 and $23, while below $13.50, support is found at $12.50.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero finally made its move towards the $100 resistance today after the lengthy consolidation phase, but for now, it remains below the key level. Both the short- and long-term buy signal is intact, and we still expect a move towards the $125 level in the coming weeks. Support levels are still found near $80 and at $68.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is trading just below the crucial $27 level after last week’s spike lower, but the long-term picture remains bullish and we expect the coin to move above the $30 level soon, despite the strong resistance in that zone. Above that, the main target is the $40 level, while another resistance zone is found at $34.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA remains stuck in a declining trend, but the $0.35 level is still holding on, and a trend change could be near. Traders should wait with opening new positions until a bullish confirmation, but investors could add to their holdings at the current levels, with key resistance levels still ahead at $0.42 and between $0.45 and $0.48.

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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4.6 stars on average, based on 380 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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2 Comments

2 Comments

  1. Chris G

    November 7, 2017 at 9:34 pm

    Looks like LTC is breaking out, ETH fell below $390 – maybe a good buy on ETH. Wondering about long-term profit targets on ETH.

  2. Chris G

    November 7, 2017 at 9:53 pm

    $290 that is, on ETH

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Analysis

5 Things To Watch Next Week

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An Italian Budget Deal?

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Outside the European Union, the ongoing debate regarding the Italian budget might be quite perplexing, especially given the strong reaction by financial markets. While the relatively small budget deficit of the country is really violating the rules of the Eurozone, we have seen much larger deviations from the fiscal rules without meaningful consequences.

That said, the sorry state of the Italian financial system, the stealth capital flight from the country, and the structural imbalances of the ECB’s bond purchasing program validate the scrutiny of the EU. Some analysts say that the Italian banking system is outright insolvent, but in any case, deep structural reforms would be necessary, and the real issue behind the debate is the populist anti-EU rhetoric of the new government. With that mind, even if the two sides reach a deal on the budget, which could lead to a strong relief rally in Europe, Italy will likely cause further severe headaches down the road.

Trillions in Market Cap Reporting

Nasdaq 100 Futures, 4-Hour Chart Analysis

The US earnings season is entering its crucial phase, with next week being one of the busiest in this quarter. The Nasdaq will be in the focus throughout the week, but the sheer size of the tech giants reporting means that the whole market could experience wild swings.

The three largest companies Microsoft (MSFT), Amazon (AMZN), and Google parent Alphabet (GOOG), alone represent more than $2 trillion in market value, and Intel (INTC), Verizon (VZ), AT&T (T), Visa (V) are also very important for the US and the global economy.

So far, the quarter surpassed expectations, and should the string of earnings beats continue, it could provide stability to the shaky stock markets. Besides the largest firms, we will keep a close eye on anything China-related, to get authentic information on the real state of the country’s economy.

The European Central Bank Behind the Curve, as Usual…

EUR/USD, 4-Hour Chart Analysis

As global economic growth is clearly slowing, and the Italian worries already caused a widening in the yield spreads between the core and the periphery in the Eurozone, the ECB seems to be way behind the curve with its monetary policies.

Although the tightening the schedule of ECB is very gradual, we could still get a hawkish surprise next week, and that could enter the hall of fame among the disastrous decisions by the central bank. The ECB managed to hike rates in the middle of financial crises before (the summers of 2008 and 2011), and although the Euro’s weakness and the Fed’s tightening steps could give the impression that there is room for a hawkish shift, the macro backdrop suggests otherwise. Look for a strong bounce in the Euro and further weakness in equities, should Draghi & Co. confirm our suspicions.

Will the Chinese Bounce Last?

Shanghai Composite Index CFD, 4-Hour Chart Analysis

2018 for Chinese stocks has been nothing short of disastrous, with the key benchmarks entering deep bear markets, fading all rally attempts so far. With the largest credit bubble in history threatening the country’s financial system, and with Chinese growth being more important than ever for the global economy, what happens in the coming months could be crucial for all investors.

On Friday, one of the lowest (official) GDP prints came out from China, while auto sales also dropped for the first time in decades, suggesting that the stock market could be correct in pricing a hard landing. While the verbal and other forms of intervention lifted stocks before the weekend, should another rally attempt fail, the bear market could enter an accelerating, mainstream phase.

US Midterms Drawing Closer

The Chinese problems are likely not caused, but definitely amplified by the ongoing trade spat with the US, and before the midterm elections in three weeks time, it’s unlikely that we will see easing in the conflict. According to polls and prediction markets, the GOP will likely keep the Senate majority. While the Democrats are still expected to take the House, the Republicans and Trump seem to have the momentum.

As stocks usual suffer in times of political uncertainty, risk assets would likely be better of, at least short-term if the current trends would continue, as A blue House + Senate combination could mean two very stormy years in Washington.

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

Nikkei 225 Futures, 4-Hour Chart Analysis

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

Forex

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

WTI Crude Oil, 4-Hour Chart Analysis

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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4.6 stars on average, based on 380 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

Monero Price Analysis: XMR/USD Marching Higher amid Large Reduction in Fees

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Kovri Bulletproofs Monero
  • Monero community members are sharing their delight with the instant impact of the recent update.
  • XMR/USD bulls will be looking at another retest of the breached Aug-Oct ascending trend line.

Latest Update from Monero Developers Sees Huge Reduction in Fees

The Monero community are sharing their excited observations of the benefits from the Beryllium Bullet update. Earlier this week, the foundation had another hard fork going live. The release was known as, “Monero 0.13.0 “Beryllium Bullet,”. The goal was for greater efficiency of their protocol, to facilitate stronger privacy, faster and more cost-effective transactions. In addition, more resistant ASIC miner protection, as previously reported via the last Monero article.

The update has instantly demonstrated its enhanced performance and new features. Monero users have been taking to the social space to express their delight, with the changes being very noticeable.

Members of the Monero community via the Reddit social page were sharing their photos, providing examples of how low the fees are for processing transactions are now.

Technical Review – 60-minute Chart

XMR/USD 60-minute chart

XMR/USD can be seen moving within a triangular pattern set up, via the 60-minute chart view. This coming after much stabilization has been seen with the price since the overly aggressive movement on 15th October. That’s when prices spiked higher in line with the rest of the market, before quickly retreating. The price behavior would suggest another breakout is very much imminent as it is currently moving within an extremely narrowing nature. Looking to the upside, resistance can be seen just ahead at $108.50, or the upper part of the pattern. Further ahead, a choppy supply area is seen running from $110-112 region. In terms of support this can be eyed not too far below, $106.50, lower part of the triangle.

Technical Review – Daily Chart

XMR/USD daily chart

Looking via the daily chart, there is room for upside and another retest of the breached ascending trend line. This had originally been supporting the price from 13th August up until early October. XMR/USD bulls could run up the price to $124 territory, before being met with a test of hard sellers. During the big spike on 15th October, the upper wick can be seen having attempted to break back above the mentioned trend line.

If the bulls can maintain their course of upside momentum and break back above the original supporting trend line, a price towards $150 could again be reclaimed.  In terms of support on the daily, this looks firm around $104, a secondary running ascending trend line. Further south, a demand zone is seen sub-$100, running from $86 – $76 region.

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 33 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

Crypto Update: Market Still in Deadlock

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The choppy, directionless period in the cryptocurrency segment continues, with no meaningful change in the technical setups of the major coins. While the broader trends are still clearly bearish and sellers remain in control of the market, we saw another minor bullish shift in the past 24 hours, with modest gains across the board.

Most of the top coins are trading in the range of the Monday session, which saw the spike triggered by the turmoil in Tether. Stellar is the apparent positive outlier of the past few days, while Dash, Litecoin, and Ethereum have been the weakest so far this week.

DASH/USD, 4-Hour Chart Analysis

On a positive note, all of the majors remain above last week’s levels, and especially Bitcoin’s continued stability is encouraging for crypto-bulls here, even as our trend model paints a negative picture of the segment.


BTC/USD, 4-Hour Chart Analysis

Bitcoin avoided a test of the $6275 level despite moving below its recent very narrow trading range yesterday, with still no meaningful bearish or bullish momentum present in the coin’s market. BTC continues to trade below the $6500 level, and its volatility is very low, even after the move below the previously dominant broad triangle consolidation pattern.

Further resistance levels are still ahead near $6750 and $7000, while support levels below $6275 are found near $600, $5850 and between $5000 and $5100.

Altcoins Little Changed as Ethereum Still Glued to $200

XRP/USD, 4-Hour Chart Analysis

The weekend has been very quiet for altcoins so far, with even the recently active Ripple settling down near the $0.46 level. XRP is around the midpoint of Monday’ s range but the lack of follow-through after the breakout from the triangle consolidation pattern is a negative sign, and the coin remains on a short-term sell signal in our trend model. Strong resistance is still ahead at $0.51, $0.54, $0.57, while support is found near $0.42, $0.375, and $0.35.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to hover around the $200 price level still being in bearish short- and long-term patterns and the relative weakness of the second largest coin remains a huge concern for the whole segment.

With no evidence of meaningful capital inflows to the market, the outlook is neutral at best, and traders and investors should wait for at least a short-term trend change before entering new positions. Strong support is found near $180, $170, and $160, while resistance is ahead near $235 and $260.

EOS/USD, 4-Hour Chart Analysis

EOS is also among the relatively weaker coins, and the coin is stuick in a broad Trading range around the $5.35 level since August. Volatility in the coin’s market has been progressively declining, but the vicinity of the bear market low suggests that the long-term downtrend is still intact, especially given the segment-wide trends.

A test of the lows is still more likely than a bullish break-out, with strong support found near $4.50 and key resistance ahead near $6 and $6.5.

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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4.6 stars on average, based on 380 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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