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Cryptocurrency Analysis: Bitcoin Tops $4000 as Rebound Continues

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As the effects of last week’s crash are waning, the recovery continues in the segment, although Bitcoin’s relative strength is prominent. The other majors are still well below their prior highs, while BTC reached the $4150 level today in early trading, surging past the key $4000 level. While the correction will likely take the coin way lower from here after the initial rally, the rebound’s strength is encouraging for bulls, and the long-term picture is now favorable for a durable bottom to form. The coin has support at $3800, $3500, and between $300 and $3150.

BTC/USD, 4-Hour Chart Analysis

Ethereum touched $300 during today’s rally, while Dash has been the strongest altcoin, technically speaking, since the crash low, as the coin surges back above $300 and breached the 4330 level as well. Among the other previous market leaders, Monero also rallied back to $100, while Litecoin remains beaten down, just trading north of the $51 support. IOTA built on its relative strength and rallied strongly of the lows as well, while Ethereum Classic remains the weakest looking major coin. There might be a choppy period ahead for traders, as the market will likely settle down after the huge bounce.  Let’s see the details of the short-term picture.

Ethereum

ETH/USD, 4-Hour Chart Analysis

ETH is trading right at the crucial support/resistance level at $285 after reaching $300 for a 50% rally off the crash low. The coin is near the declining short-term trendline, and it’s still well below its all-time high that it hit back in June. The short-term MACD is now in neutral territory and a re-test of the $250 support is still likely before a decisive trend change. Support is found near $285, $250, and $235, while resistance is ahead at $330.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin has been halted by the $56 resistance level during the rebound, but the coin is back to its rising long-term trendline after the spike lower. We expect more volatile consolidation from the coin, with a focus on the $50-$51 support/resistance zone. The declining short-term trend is clearly intact, with resistance ahead at $64, and further support near $44.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is trading slightly above the declining short-term trendline, being the only one among the majors to breach trendline resistance during the rebound. The coin is still expected to re-test the $300 level in the coming week, but the relative strength is encouraging, and short-term dips should be bought by long-term investors. Strong support is still found near $300 and $265, with resistance ahead at $360.

Ripple

XRP/USD, 4-Hour Chart Analysis

XRP is back above the long-term base formation after the bounce, and the coin held up above the prior declining trendline during the crash. The resistance zone between $0.1950 and $0.20 stopped the advance for now, but we still expect the currency to be relatively strong after the correction ends. Support is now found at $0.18 and $0.16 while further resistance is ahead near $0.22.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic tried to rally above the declining trendline and the crucial $13.50 resistance, but the level held, and the coin remains relatively weak from a technical perspective. The current price levels still look attractive for long-term investors, but short-term traders should wait until a break above primary resistance before entering new positions. Above the resistance zone around $14, further strong levels are at $16 and $18, while support is found near $9.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is still gravitating towards the $100 level, as the coin remains among the less volatile majors since the crash. The currency is clearly in a declining short-term trend, but we expect it to remain relatively strong in the coming weeks, and hold above $80 even if the broad correction continues. Further support is found near $68, while resistance is ahead at $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO settled down after the crazy period for the coin, as the market digested the effects of the Chinese legislative changes. The coin recovered above the $16.50 level, and although the declining trend is still dominant, the worst should be behind for bulls. Support is found near $16.40 and $13 while strong resistance is ahead at $22, $25, and $30. We expect no new lows for the coin in the coming period, and investors could now buy the short-term dips.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is showing considerable short-term relative strength after holding up well during the crash as well. The declining long-term trendline is now broken and although the $0.64 level is still ahead as primary resistance, we expect the $0.45-$0.48 level to limit the coming dips, and a new uptrend to develop in the coming weeks.

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 350 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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3 Comments

3 Comments

  1. tieuthanhliem

    September 18, 2017 at 7:28 pm

    As china widens bitcoin crackdown, we can see $2000 again, that said we are in bear market

  2. FalconX

    September 18, 2017 at 8:10 pm

    you meant “between 3000 and 3150” in the first paragraph correct?

  3. embersburnbrightly

    September 19, 2017 at 2:02 am

    “The coin has support at $3800, $3500, and between $300 and $3150.” Between $300 and $3,150 that’s some range! (Sure you meant between $3,000 and $3,150.)

    🙂

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Analysis

Forex Update: A Good Time to Accumulate Euros

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On our August 31 Forex Update, we revealed how the Euro is looking strong against major currencies such as the British Pound (EUR/GBP), Japanese Yen (EUR/JPY), and the Canadian Dollar (EUR/CAD). Widening our scope, we discovered that the Euro is also doing well against other major currencies. Other than its recent struggles against the US Dollar (EUR/USD), we can say, with conviction, that the Fiber is one of 2018’s top performers.

In this article, we review EUR’s performance against the Australian Dollar (EUR/AUD) and New Zealand Dollar (EUR/NZD) to show why it may be a good time to accumulate Euros.

Euro/Australian Dollar Analysis

The EUR/AUD pair dropped to as low as 1.16033 in August 2012. This concluded the long bear run that saw the 45.06% devaluation of the Euro against the Australian Dollar from the 2008 high of 2.11197. While the drop may look depressing to long-term investors, seasoned traders pray for plummets like this. They know that fortunes are made by investing when markets crash.

So far, EUR/AUD is rewarding those who bought the crash.

Monthly chart of EUR/AUD

Those who bought the bottom are now up by close to 30%. More importantly, it appears that their investments may be about to significantly grow. EUR/AUD has just broken out of a large ascending triangle pattern on the monthly chart.

In addition, the monthly RSI is threatening to break out from its own symmetrical triangle pattern. From the looks of it, the breakout can happen anytime.

With EUR/AUD reversing its trend, you have one very good reason to accumulate Euros.

Euro/New Zealand Dollar Analysis

The EUR/NZD pair suffered an even longer bear run than the EUR/AUD pair. After posting a high of 2.57906 in February 2009, EUR/NZD went into a long downtrend. The correction drove the pair to as low as 1.38792 in April 2015. In over six years, the Euro lost over 46% of its value against the New Zealand Dollar.

Then again, there are those who make a very good living by buying the bottom. This is risky business. However, a fundamentally strong currency like the Euro is likely to bounce back hard after losing almost half of its value.

Monthly chart of EUR/NZD

If you bought the bottom, you would be in the green by over 26%. If not, well, it’s not too late. As you can see, EUR/NZD has just broken out of an inverse head and shoulders pattern on the monthly chart. This structure is one of the best if not the best reversal pattern in technical analysis.

On top of that, you can see that the monthly RSI is already in an uptrend. It’s been generating a series of higher highs and higher lows for some time now. This is a great signal telling us that bulls have taken control of the market.

With this breakout, EUR/NZD has just launched a new uptrend. This is another very good reason to accumulate Euros.

Bottom Line

Other than its struggles against the mighty greenback, it appears that the Euro is performing brilliantly against other major currencies. Recently, it managed to reverse its trend against the Australian Dollar and the New Zealand Dollar. In addition to its rosy outlook against the British Pound, Japanese Yen, and Canadian Dollar, we believe that now is a good time to accumulate Euros.

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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3.6 stars on average, based on 235 rated postsKiril is a financial professional with 4+ 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

ETFs: What Is The SEC  Really Thinking?

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As a veteran Wall Street type, I was not surprised at Thursday’s SEC announcement on the VanEck-SolidX Bitcoin ETF.  Once again they gave a “no decision”. This pushes the deadline back to December 29, 2018. Don’t be surprised if New Year’s Eve comes and goes and nothing happens before the SEC is forced into a action by the end of February.

Back in August, when the first delay was announced, crypto investors’ reaction was swift and painful.  On Thursday, after a temporary hiccup, prices took a surprisingly positive turn. If we are to believe for just a moment that crypto prices act rationally (or just occasionally) then comes two obvious questions, are crypto ETFs good or bad? Secondly why can’t the SEC come up with an answer?

Never Say Yes

Let’s start with the easy question first: what’s up with the SEC?  Having dealt with this teflon organization for over 30 years, their actions with regard to VanEck-SolidX are the same pattern they have followed forever.  Practically never do they approve anything. Instead they provide two choices: reject or delay. By delaying the VanEck-SolidX application they are accepting the ETF concept in principle but laying out objections that must be corrected.

The result of this regulatory song and dance, don’t expect a decision until the last minute. The reason is that the main issues are not likely to be resolved in time. In fact, I doubt that the ETF proposal gets approval for perhaps as much as another year.  Here is why.

SEC Speak: Obfuscation

According to Jake Chervinsky, attorney for VanEck, the SEC asks “18 multiple part questions covering seven pages.” He adds: “It’s not encouraging to see the SEC ask if the bitcoin futures markets are “of significant size” despite having already concluded last month that they’re not.”

This is a tactic in obfuscation that the SEC loves when an applicant has not provided an adequate response.  In this case there is no objective answer to how liquid a market must be to meet the measure of significance.  Moreover, there is little or nothing that can be done in the short run to create greater liquidity.

The SEC is a political body as much as any agency of the Federal Government.  In raising the issue of liquidity, they can stand behind their role of protecting the public without at the same time hindering public access to a class of assets, even at current depressed levels, is worth $200 billion, more or less.

The SEC Is Right With Their Delays

Does the crypto world really benefit, as this stage of its evolution, by fostering a group of ETFs?  The argument in favor says that this is the way to simply and safely offer the individual investor a way to participate in a diversified portfolio of crypto.  That sounds noble – or is it just something that makes lots of money for those who create them?

But so far, at least from the viewpoint of the SEC, ETF applicants have not created a more secure domain.  More importantly, even if this were not the case, what does the investor gain from investing in a diversified list of crypto when Bitcoin overshadows about every other altcoin?

With nothing against those that believe in the benefits of ETFs, the benefits in current terms is far better for the ETF sponsor that it is for the investor.

Looking just at the math, an individual investor could be just as well off buying Bitcoin, Bitcoin Cash, Ripple, Ethereum and EOS. Admittedly, it is somewhat more complicated finding a place to buy and store Ripple, but with this small portfolio, you cover 75% of the entire crypto asset class. If security is an issue simply go to  blockgeeks.com/cryptocurrency-safe/ and select from a list of hardware wallets.

So whether the SEC gives their approval of VanEck-SolidX in December or February might make a difference if this were 2020 or sometime thereafter.  As for now, it really isn’t critical to the mass acceptance of crypto.

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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4.4 stars on average, based on 105 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Stocks Pull Back From Highs as Pound Plunges

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After yesterday’s record-breaking session, US stocks once again broadly opened at all-time highs, even as the momentum of the global rally waned. Chinese stocks kick-started the day by extending their relief rally off their 4-year lows and Europe also ticked higher, although the major indices couldn’t hold on to their early gains. Since the US open stocks are drifting lower, but with no major events scheduled for today, a calm afternoon session is likely on Wall Street.

GBP/USD, 4-Hour Chart Analysis

The slight weakness came on the heels of the weaker than expected European flash Manufacturing and Services PMIs, while Theresa May’s Brexit ultimatum also weighed on local equities. The Great British Pound fell sharply on the news too, erasing yesterday’s lofty gains and briefly getting close to the 1.30 level, as the Dollar rallied across the board.

NASDAQ 100 Futures, 4-Hour Chart Analysis

The Nasdaq has been lagging the Dow and the S&P 500 from a short-term perspective and the tech benchmark is once again leading the way lower today. The worse than expected guidance by Micron (MU) from yesterday is weighing on the segment and the market-leading tech giants are also weaker than average.

10-year US Treasury Yield, 4-Hour Chart Analysis

All eyes are still on the bond market, as Treasury yields are near multi-year highs concerning almost all maturities, and with the 10-year yield being very close to signal a trend change in the multi-decade structural downtrend.

While next week’s rate hike by the Fed is near certain, the outlook for the next year will likely be crucial, and given the positive US economic trends and the trade wars’ contained impact, the market’s rate hike expectations are rising across the curve.

Futures and Option Expiries Lead to Choppy Trading

Today is an important day for futures and options traders, as the quarterly contracts are expiring across asset classes, and that has a huge effect on stock and commodity markets as well, with high volumes and volatile trading especially around the key strike prices. Strong trends are rare on these sessions and day-traders should be cautious of sudden volatile spikes in even the most traded assets.

Copper, 4-Hour Chart Analysis

Commodities already experienced volatile swings throughout the day, with especially gold being tossed around the $1200 level that has been in the center of attention in the past weeks. Shorts in copper have been squeezed heavily before the end of the week, with the crucial metal surging above key support with the rally in Chinese stocks, while WTI crude oil retreated from a more than two-month high above the $71 per barrel level as the Dollar rallied.

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 350 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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