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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

Crypto Update: Coins Remain Under Pressure but Supports Still Hold

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The correction of the post-crash rally is still dominant in the cryptocurrency segment, despite the encouraging bounce on Friday, as Bitcoin is dragging the market lower. The coin turned relatively weak in recent days after an extended period of outperformance, but even BTC is holding up well, with the bearish momentum being far from disastrous.

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Ethereum’s relative strength, on the other hand, is slowly building, as we first noted it during the Thursday sell-off, and the second largest could be spearhead the next leg higher. The early leaders of the rally, Ethereum Classic and Litecoin are also acting bullish, and the overall picture remains in line with the orderly correction scenario.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin still hasn’t tested the key $9000-$9200 zone despite several waves of selling that hit the coin, but it’s still stuck below the $10,000 level. We expect a short-term bottom in the coming week, as the momentum of the decline suggests accumulation, and investors should use the dip to add to their holdings, even if a test of the primary support zone is still possible here, with further resistance levels ahead above $10,000 at $11,300, $11,750, and $13,000.

LTC/USD, 4-Hour Chart Analysis

Litecoin put in a higher short-term low during the weekend, retaining its leading position in the rally from a technical standpoint. The MACD indicator already gave a bullish signal after dipping into negative territory, but should Bitcoin continue to struggle, LTC could be in for more consolidation before despite the relative strength. The $200 level is still in focus with a strong resistance zone just ahead between $220 and $235, with the rally high at $250, while further key support is at $180.

Altcoins Mixed in Quiet Trading

ETH/USD, 4-Hour Chart Analysis

Percentage changes are not significant today following yesterday’s decline, and most of the majors are holding up above or near key support levels, with relatively low volatility and notable divergence between the coins.

As for the recently weaker coins, Ripple is still trading well below the $1 level, while IOTA managed to bounce hard off the correction low reaching back to the $1.9 resistance, and edging closer to a break-out from the still dominant downtrend.

The rest of most established coins are still drifting lower, with no major moves in the last few days, so without notable red flags, we remain positive regarding the long-term setup.

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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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Analysis

Daily Analysis: Oil Extends Rally as Nasdaq Leads Stocks Higher

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2749 1.38%
DAX 12,483 0.18%
WTI Crude Oil 63.58 1.29%
GOLD 1330.00 -0.16%
Bitcoin 10,14 -0.09%
EUR/USD 1.2295 -0.28%

US equities built up some bullish momentum towards the end of the week, ignoring the technical damage that the volatility-crash caused, and the major US indices rallied into the close today, squeezing the shorts. The Nasdaq, which led the rally as we expected, took out the key 6850 level in late trading and added another percent to, incredibly enough, finish only a hundred point of the all-time high.

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NASDAQ 100 Futures, 4-Hour Chart Analysis

Should the tech benchmark retest the high next week, it will be amid very strong negative divergences, but hey, those divergences have been building for months now. The rally in equities was boosted by the dip in Treasury yields, especially at the long end of the curve, while Amazon continued ot lead the charge, closing right at the historic $1500 per share level.

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Russell 2000 (Small Cap) Index, 4-Hour Chart Analysis

The advance in the Dow and the S&P 500 is much less convincing and with small caps also lagging the tech-behemoth juggernaut, we remain skeptical regarding the sustainability of the move. That said, if the broader indices stay above the key levels, we will be trading the long side in equities, even as from an investment standpoint, valuations are still way above acceptable.

Forex Markets and Commodities

The lackluster performance of European and Asian stocks adds to the negative divergences, especially as the Euro stopped appreciating against the Greenback, and that should be helping stocks of the old continent. Of course, the DAX and the EuroStoxx 50 could play catch-up next week, barring another surge in the common currency.

EUR/USD, 4-Hour Chart Analysis

The most-traded forex pair remains in a short-term downtrend, as it failed to recapture the previously broken rising trendline, and the commodity related risk-on currencies also remained under pressure. The Canadian Dollar did bounce back off yesterday’s 8-week lows, boosted by the much hihger than expected inflation release and the jump in the price of crude oil.

USD/CAD, 4-Hour Chart Analysis

Oil benefited from the positive shift in sentiment, while the Syrian situation, which took a backseat in the headlines, still supports the rally. The Japanese Yen and gold were stable amid the risk-rally and that adds to our suspicions regarding the upside potential form these levels.

Cryptocurrencies

The segment started out the day with a strong bounce that carried the major coins higher by around 10%, but given the recent steep short-term pullback, even that wasn’t enough to turn the tide, and the day ended with an (almost usual) sell-off after the US close. Despite the recent volatility, the overall picture is still encouraging, with most of the majors being safely above the crash lows, likely in a new bullish cycle that has the potential to last for several more weeks or even months.

While new all-time highs are it guaranteed following the 60-70% declines among the largest coins, but even without those, plenty of upside potential is left for investors. With that in mind, investors should hold on to their coins and even add to their holdings on the short-term dips like the current one.

ETH/USD, 4-Hour Chart Analysis

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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.

(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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