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Cryptocurrency Analysis: Coins Settle Down as Rebound Stalls

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As the waves of last week’s Chinese legislative shift faded away, volatility fell to normal levels in the segment, as the total market value of the sector reached $140 billion again for a 40% gain. The post-crash surge in the major coins got stopped by the dominant short-term trendlines and the overhead resistance zones, with the price levels in focus being $4000 for Bitcoin and $285 in the case of Ethereum. The ETH token that breached $300 during the initial surge is consolidating near the key support/resistance level, with the declining trendline also being close in the close vicinity. We still expect a re-test of the $250 level before a sustained move higher, with further support at $235 and resistance ahead near the $330 level.

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ETH/USD, 4-Hour Chart Analysis

The deep correction that was accelerated by the Chinese decisions cleared the preceding overbought readings in all of the largest currencies, and as correlations are expected to break down as the move ends, the different coin will likely take diverging paths again in the coming weeks. Those majors that are already oversold or are after a longer consolidation, such as Ripple, IOTA, and NEO could outperform the market, while the likes of Dash, Monero, and Litecoin are likely to experience a choppy consolidation period following their lofty gains.  Ethereum Classic is the most suspicious of the major coins as it is still stuck under long-term support and a declining long-term trendline. Let’s see the detailed short-term analysis of the currencies.

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Bitcoin

BTC/USD, 4-Hour Chart Analysis

BTC is trading right at the $4000 resistance and slightly below the declining trendline after the volatile week, and the bounce cleared the short-term oversold condition. Another leg lower to test, at least the $3500 support is likely before a sustained move higher, but the long-term picture is not overbought anymore, and a durable dip below the crash lows is unlikely now. Below $3500 the $3150 and $3000 levels serve as support.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade below the $56 resistance level, as volatility decreased substantially in the coin as well after the crash and the subsequent bounce. While we expect more sideways price action in the currency, even a test of the crash lows and the long-term base formation is unlikely. Strong support is found near $50-$51, and around $44 while a line-in-the-sand resistance level is ahead near $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash failed to hold above the short-term trendline after the healthy bounce, and despite the relative strength that it showed, we expect the coin to continue the correction after the prior huge break-out The short-term MACD is close to a bearish cross, and that could signal the next leg lower in the consolidation phase. Strong support is still found near $300 and $265, with resistance ahead at $360.

Ripple

XRP/USD, 4-Hour Chart Analysis

XRP fell slightly after touching the resistance zone just below $0.20 but it remains well above the long-term base formation after testing it during the crash. The declining short-term trend is intact, and although we still expect the coin to outperform the segment in the coming weeks, the re-test of the $0.16 level is possible as the correction concludes. Support is now found at $0.18 and $0.16 while crucial resistance is still ahead around the $0.22 level.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic remains the weakest major concerning the shot-term picture, as it is still well below the long-term base formation that is found near the $13.50 level. The coin fell back below the declining long-term trendline as well, and despite the attractive price level, short-term traders should stay away from new positions until an uptrend is established. Strong resistance levels are at $16 and $18, while support is found near $9.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is hovering around the $100 since the initial rebound, and it is still stuck below the declining trendline as well. With the long-term picture still just being neutral following the monster rally and the crash int eh segment we expect further consolidation before a test of the prior all-time highs. Support levels are found near $80 and $68, while primary resistance is at $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is still trading near the $20 after settling down yesterday, and the coin is now very close to the declining trendline despite the volatile period of the previous weeks. While a dip towards the crucial $16-$16.50 zone is still possible we don’t expect a test of the crash lows in the coming period. Strong resistance is ahead at $22, $25, and $30 while further support is found near $13.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA remains the only major that is above the declining short-term trendline, but a move above $0.65 would be needed to confirm the new uptrend, and more sideways action is possible, as the broad correction concludes in the segment. That said long-term investors should already buy the short-term dips in the currency. Key support is found near the $0.45-$0.48 level, while resistance above $0.65 is ahead at $0.75.

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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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Analysis

Technical Analysis: Majors Stage Rally but Strong Levels Still Ahead

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The cryptocurrency segment has recovered from a broad correction today in early trading, with the most valuable coins all turning into green during the session, despite the bearish start to the overnight session. With bottom-to-top gains of up to 15%, the rally helped in easing the worries of bulls, especially in the case of the relatively weaker coins.

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Bitcoin and most of the largest altcoins remained stable during the selloff, and BTC recaptured the $10,000 level quickly after trading as low as $9600 overnight. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

BTC/USD, 4-Hour Chart Analysis

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That said, we expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

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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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Analysis

Pre-Market: Stocks Refuse to Fall Even as China Takes Over Key Insurer

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Although it should have been a very quiet week in China, thanks to the New Year celebrations, the recent surge in volatility and the plunge in equities didn’t pass without consequences in the key market. Just shortly after effectively shutting down the Chinese version of the Volatility Index (VIX) (presumably to calm the markets…), one of the main actors of the monstrous financial web, Anbang, of the country had to be taken over to avoid a systemic event and stop the “creative” financial engineering that involved criminal activity (the shadow of 2008).

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China will likely need many more duck-tapes like this one if it wants to stop the largest credit bubble in human history to collapse, but for now, the solution could work. Equity futures edged higher since yesterday’s volatile close, and as the major US indices are holding up well, not far off last Friday’s highs, our bearish short-term view might have to be revised.

Nasdaq 100 Futures, 4-Hour Chart Analysis

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As we discussed before, the long-term uptrend is intact, and we expect at least a re-test of the highs even if we are in a large-scale top formation, but we thought that the technical damage caused by the crash three weeks ago would require more healing.

We are not turning bullish just yet, but today’s session could finally decide if we the BTFD-crowd is strong enough to turn the tide after the choppy drift lower this week. We are still focusing on the Nasdaq, as the broader market seems to be following the lead of the tech benchmark, and a move 6850 (in the Nasdaq 100 futures, and still the 2735 level in the S&P) would be a very positive sign for bulls.

DAX Index, 4-Hour Chart Analysis

The German DAX index is also showing some tentative short-term relative strength although it remains almost 10% below its all-time high, and it remains a strong negative divergence to be monitored.

Forex Markets Quiet

EUR/USD, 4-Hour Chart Analysis

The main pairs are trading in a choppy narrow range today after the strong move in the Yen and the drop in the USD yesterday. US Treasury Yields are edging lower today, helping the calm in equities and currencies, but on a bearish note, commodity currencies failed to rebound so far, and they were providing good signals since the crash. Day-traders should note that the Canadian Dollar will likely be very active again, with the Canadian CPI report coming out pre-market.

To sum the outlook up, we are still leaning on the risk-off side here regarding the short-term outlook, but we wouldn’t bet the farm on that, as there are mixed signals before the weekend.

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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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Analysis

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

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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 113 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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