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Cryptocurrency Analysis: Correction Continues as Volatility Surges Across the Board

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It’s been a wild session for cryptocurrencies after yesterday’s crazy trading, with most of the major coins registering extreme price swings. The surge in volatility led to record trading volumes and some of the main exchanges experiencing technical difficulties, while the segment’s roller coaster ride continued.

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Bitcoin fell as low as $9000 as it took out yesterday’s lows, but the decline was interrupted by wild rallies, with the coin trading in a more than 15% daily range. The digital currency is stuck below the $10,000 level and given the severely overbought long-term picture, the correction will likely reach much lower, although a re-test of the highs is still possible after the initial break-down. Key support levels are still found at $8200, $7700, $7000, and $6700.

BTC/USD, 4-Hour Chart Analysis

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Ethereum followed the most valuable coin closely during the current correction, and the price of the ETH token also fell below yesterday’s minimum today, getting close to the prior all-time high at $400, after the prior break-out and rally up to the $500 level. As the short-term momentum is now neutral, a meaningful bounce can happen at any time, but we expect the broad to continue despite the bounces, with a possible test of the $380 and $350 levels in the coming period.

ETH/USD, 4-Hour Chart Analysis

Dash is by far the best-performing cryptocurrency lately, and the coin even hit a marginal new high amid the bounce today, while the rest of the majors suffered meaningful losses, with the total market cap of the segment retreating by around 20% off its recent highs.

Volatility is expected to remain elevated after the stellar rise, and we advise traders to wait until the overbought readings are cleared before entering major positions. Let’s see the detailed short-term outlook for the most traded altcoins.

Litecoin

 

LTC/USD, Daily Chart Analysis

Litecoin suffered major losses after breaching the $100 level yesterday, and it tested the $75 support today, before rebounding back above $80 thanks to the broad rally. The short-term MACD is headed for oversold territory and a meaningful bounce is likely in the coming days, but we expect a durable consolidation phase following the recent rally, with further support below $75 found at $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash rose above $800 surprisingly despite the yesterday’s crash, hitting yet another record high, defying the negative trends in the segment. While we still think that the coin is among the strongest regarding the investment prospects, a deeper correction is very likely in the coming weeks, and better buying opportunities will emerge. Key support levels are found at just above $600, at $500, $470, and near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple remained relatively weak from a long-term technical perspective, as it has been following the segment lower during the correction. That said, the coin remains on a buy signal for investors, with strong support levels around the $0.2250 and $0.20 levels. We expect volatile trading to continue in XRP as well, with targets ahead at $0.26 and $0.30.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to trade in the vicinity of the prior high at $23, after the sharp correction off its recent all-time high. The coin is still overbought regarding the long-term momentum, but the short-term MACD points to a bounce in the coming days. We expect the correction to continue, with strong support levels found at $18l, and $16.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero hit joined the correction in earnest after hitting our final target for the current leg higher near $200, and the coin spiked almost back to the $150 level today, testing the previous all-time high. The long-term picture still suggests further correction, and a move towards the $125 level seems likely before another durable rally.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO fell back to the vicinity of the crucial $30 level, as the volatile crypto-correction dragged the coin lower as well. That said, the encouraging long-term view is unchanged, and we expect the recovery in the currency to continue towards the all-time highs after the broad correction runs its course. Further support is found at $27, while targets are still ahead $40 and $50.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA showed relative strength during today’s secondary sell-off after spiking below the previous all-time high at $1.10 yesterday. Despite the current strength, the coin is still extremely overbought on all time frames, and investors should wait with opening new positions until a deeper correction. Support levels below $1.1 are still found at $1, $0.75, $0.64, and $0.56.

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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.

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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