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Cryptocurrency Analysis: Coins Stabilize But China Doubts Persist

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The scary decline that started on Friday didn’t cause major technical damage in the most important coins, as the prior correction lows mostly held so far. The most watched Bitcoin stayed above the crucial $4000 level, and it’s now back near $4200 thanks to today’s modest rally. With the long-term pressures still being generally bearish, we expect more corrective price action in the most valuable coin, but until the primary support level is intact the short-term picture remains neutral.  Should the Chinese ban on crypt trading prove legit, the coin might be headed towards the $3800 and $3500 support levels, with another strong zone below those at $3150.

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BTC/USD, 4-Hour Chart Analysis

The other majors are in a slightly worse position, as BCT was also supported by safe haven buying in connection with North Korea, and the likes of Ethereum and NEO were also more affected by the earlier news on the Chinese ICO-ban. The small gains today didn’t change the short-term trends, and the recently surging currencies, Dash, Monero, and Litecoin are still overbought, while the more neutral coins like Ripple and ETC still look more promising for the coming weeks. Overall, the segment lost 20% of its market value, which currently stands at $145 million, and the coming week might be crucial to gauge the extent of the current correction.  Let’s see how the details

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Ethereum

ETH/USD, 4-Hour Chart Analysis

ETH didn’t break below the key $285 level following Friday’s flash crash, but it remains stuck below $300, 30% off its recent highs. The coin is getting close to neutral regarding the long-term picture, but we expect more volatility in the coming weeks, with a likely test of the $235-$250 support zone before the next sustained move higher. Resistance is ahead near $330, at $350, and near the $3890 level.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin bounced off the $64 level yet again during the weekend, and it remains in a short-term correction pattern, around the mid-point of the rising long-term trend channel. The coin is still expected to dip below $64 in during the correction, with the $56 and $51 levels providing strong support. Resistance is ahead at $75 and $80, with the all-time high above those levels near $96.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is holding above the $300 support level in the face of the overbought momentum readings, and the coin is still well inside its long-term rising trend. The crucial $360 level is ahead as primary resistance, while below $300, further support is found at $265 and near $220. We still expect a dip below $300 in the coming weeks, so long-term investors should still wait with opening new positions.

Ripple

XRP/USD, 4-Hour Chart Analysis

XRP recovered almost all of its flash-crash losses, and its trading right at the $0.22 level again, proving relatively strong amid the broad correction. We still expect the coin to outperform the segment in the coming period, with the long-term picture still being neutral, and with strong support just below $0.20, at $0.18. key resistance levels are ahead at $0.26 and near the $0.30 level.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is back in its long-standing trading range after Friday’s spike lower, and the coin is once again lagging the broader market after a short period of strength. That said the long-term picture remains encouraging, and the current price level still seems attractive from a long-term perspective. Primary resistance is now at $16, with further levels at $18, and above that near the all-time highs at $23, while support is at $14.50 and around $13.50.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero remains in similar technical positions as Dash, also being overbought after a huge rally. The coin held above the $100 level during the weekend, but it’s well off the $125 resistance. We still expect the currency to dip below $100 in the coming weeks and the $80 and $72 levels are the most likely targets for the move, with further support at $58.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is trading just above the $22 level after settling down following a very volatile week. The coin faces short-term resistance at $25, and with it being a good proxy for the effects of the Chinese crackdown, traders should pay close attention to the moves in the coming days. The downtrend remains intact in the currency, although the long-term picture is neutral after the more than 60% decline. Below $22, the coin has support at $16.50 while resistance is ahead near $30.

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  1. fermera_dany

    September 11, 2017 at 7:47 pm

    Thanks for the article.

    *You have a slight typo in the ETH levels.

    Resistance is ahead near $330, at $350, and near the $3890 level.

    Cheers

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Analysis

Bitcoin Bears Running Out of Gas, According to Price Manipulation Theory

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A group of researchers at The Crypto Fam have linked price manipulation to bitcoin’s bear market, suggesting that the arrival of institutional trading allowed investors to dump oversized holdings of digital currency.

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Bitcoin Price Manipulation?

According to a new theory, it is no coincidence that bitcoin’s long unwind began on Dec. 17, the same day that bitcoin futures were launched. Over the next several months, the bitcoin-dollar exchange rate would fall from a high near $20,000 to a low of $5,980.

The rapid decline was aided by futures trading, which allows traders to short assets much more easily. As we’ve written before, shorting bitcoin was practically impossible prior to the launch of futures.

The theory posits that institutional money was stocking up on bitcoin well before Dec. 17, likely in anticipation of the CBOE/CME futures contracts. The bear market that ensued consisted of three major down moves, with the third leg beginning earlier this month.

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Each down move follows a similar pattern: (1) a fake-out dump, (2) a failed rally and (3) a major dump. Each leg down is driven by lower selling volume with each drop less severe than the previous.

The compelling study was presented this week in a series of tweets by The Crypto Fam, which describes itself as “a community of crypto enthusiasts bridging the gaps.” The group’s stated goal, according to its website, is to “make crypto not so cryptic.”

In describing the pattern, the researchers concluded that “the bear market is running out of gas” because their supply of bitcoin has declined since the pump culminated on Dec. 17.

“This is a very simplified explanation of how markets work. A great deal of the total BTC supply is not traded. Some is lost forever in idle or forgotten wallets. Other Bitcoin is hodled by strong hands who never sell. This gives [market makers] greater power with their share of BTC.”

End of the Downtrend?

With the bears and market makers running low on supplies, the researchers concluded that the end of the downtrend is near. Bounces are more shallow than before while bottoms aren’t nearly as low.

Bitcoin prices fell below $7,300 earlier this week but have since recovered to the $7,500 range. Since bottoming below $6,000, prices have failed to test new lows. On the opposite side of the ledger, rallies have also been limited to $12,000 and $10,000, respectively.

Institutional adoption is widely viewed as a positive development in the evolution of cryptocurrency trading, though the latest study sheds light on the downside risks of derivatives trading. A similar conclusion was drawn earlier this month by the San Francisco Fed, which compared the launch of bitcoin futures to innovations in securitization in the mortgage market. However, this model has been criticized heavily for mistaking correlation with causation.

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.

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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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4.5 stars on average, based on 417 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

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On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

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Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

(more…)

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: Oil Plunges Below $70 as Markets Mixed Before Long Weekend

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Financial markets are relatively calm today, despite the hectic week that was highlighted by the Turkish currency crisis, wild swings in bonds, and a step back in US-North Korean relations. Stock markets turned lower globally, with US equities outperforming the rest of the world, essentially drifting sideways all week long, thanks to the slight correction in the Dollar’s rally, and the dip in Treasury yields that was triggered by the dovish Fed meeting minutes.

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S&P 500 Futures, 4-Hour Chart Analysis

Today, the durable goods report came out before the opening bell and although the headline number was a tad worse than expected the more important core figure beat the consensus estimate, helping the slightly dampening economic outlook, even as yields continue to fall, especially with regards to long-dated Treasuries.

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EUR/USD, 4-Hour Chart Analysis

Although emerging market currencies are way less volatile today than recently, despite the rebound in the Dollar, equities shed their early gains and are now slightly in the red. The all-important EUR/USD pair hitting yet another 6-month low near 1.1650, and the test of the key long-term 1.1450-1.15 zone looks more and more likely in the coming weeks, even as the pair is a bit oversold.

Energy Markets in Turmoil as OPEC Signals Production Increase Again

WTI Crude Oil, 4-Hour Chart Analysis

It seems that the crude oil market is in for a strategic switch yet again, as the OPEC, together with Russia made it clear today that the price of the Black Gold finally reached a desirable level. The cartel will be targeting a higher level of output later on this year in order to keep the US shale players under pressure by capping the advance in the key commodity’s market.

The WTI contract reached a 4-year high at $72 per barrel recently and the Brent contract which is more exposed to Middle East woes rose as high as $80 per barrel after trading below the $30 level just two years ago. The last phase of the advance extended above the level where a large portion of the shale plays turn profitable, and as global growth worries also surfaced, the commodity entered a selloff this week.

Gold Futures, 4-Hour Chart Analysis

Safe haven assets continue to be bid despite the relatively calm environment, and gold hit a two-week high today despite the bounce in the Greenback as buyers are back after the wash-out plunge below $1300. With the long-term setup and fundamentals still being favorable for the precious metal, the short-term downtrend line is in danger here.

As US markets will be closed on Monday, which usually favors an active session, volatility might remain high throughout the day.

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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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