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Analysis

Cryptocurrency Analysis: Ethereum Holds Strong amid Broad Correction

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The crypto-coin market is very active today, as yesterday’s string of break-outs and pull backs triggered volatility in the majors and the small cap coins as well. Ethereum’s surge reached as high as $400 in early trading, but the decline in Bitcoin “infected” the other coins during the US session. As we noted in our long-term outlook, both BTC and ETH are in overbought territory, and that could mean that a consolidation period or a deeper correction is in the works.

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Bitcoin

BTC/USD, 4-Hour Chart Analysis

Bitocoin’s sell-off accelerated after it broke the swing low at $2600 but it bounced off the support level near $2450. Further support is found at $2350 and at $2150, which corresponds with the rising long-term trendline. The short-term trend switched to negative, while the long-term trend is still intact. Investors should be looking for entry points as the price falls, while short-term traders should wait for bullish signs before entering new positions.

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Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum remains the strongest major short-term, as it is still inside the rising trend channel on the USD pairdespite this afternoon’s dip.  The currency is now trading right at yesterday’s maximum near $350 after a brief spike below short-term support. The $300 level is the initial target for a correction, as it is right at the rising short-term trendline currently. The BTC pair is still in a strong uptrend as the value of ETH is getting closer and closer to BTC’s

ETH/BTC, 4-Hour Chart Analysis

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin experienced a failed break-out attempt along with Monero, yesterday, as it briefly rose above $32, but fell back to the long-term consolidation pattern amid the Bitcoin correction. The long-term picture is unchanged despite today’s volatility with the coin still being in a corrective phase following April’s surge. The short-term trend is currently neutral, with support levels found at $27.50, $26.25. The BTC pair is little changed as it is still stuck in a range between 0.10 and 0.115.

LTC/BTC, 4-Hour Chart Analysis

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple failed to gain relative strength against Bitcoin and it continues to trade in a long-term corrective pattern, although the break below the long-term trendline on the USD chart is a bearish sign.  A sustained below $0.23 would warn of a decline towards $0.20 with further strong support at $0.18. The BTC pair is weak, but the currency is still holding on above the key support between 0.00008 and 0.00009.

XRP/BTC, 4-Hour Chart Analysis

Monero

XMR/USD, 4-Hour Chart Analysis

Monero failed to break-out to new all-time highs uyesterday and fell below the crucial $50 level today, being dragged down by BTC. The short-term trendline has been broken and more consolidation is expected, with a possible re-test of the long-term trendline that is currently found near $42.

Dash

DASH/USD, 4-Hour Chart Analysis

The Dash/USD pair is still looking bullish despite today’s volatile session, as the coin rose as far as $200 after breaking out above the $150 level and hitting our targets for the move. If the broad correction continues, the coin has further support near 140, and at the prior correction-low near 130.

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Analysis

Technical Analysis: Litecoin Continues Surge as Bitcoin Tests Highs

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With the crypto world being focused on the historical futures launch, the major coins all enjoyed buying following a hectic weekend, and a volatile week as a whole. BTC itself got another boost from the widespread publicity and the volatile correction of the recent days ended, with the most valuable coin bouncing back towards its all-time high.

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While the long-term picture remains severely overbought, the short-term picture is not stretched and further gains are possible even amid the elevated correction risk. That said, investors should wait for a more favorable entry point to ad dot their holdings, while traders should control position sizes in the light of the long-term setup. Major support levels are now near $13,000, $11,300, and $10,000, with stronger levels still at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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The major altcoins are all up today, but only Monero and Litecoin are still within short-term uptrends, and the segment as a whole is still dangerously overextended, and a deeper correction is very likely in the coming weeks. LTC continued its recent break-out, getting close to the $200 level, and joining the extremely overbought group regarding the long-term momentum, and triggering a long-term sell signal in our trend model. Key support levels are found $100 at $75 and $64, with a weaker primary level at $125.

LTC/USD, 4-Hour Chart Analysis

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Long-Term Analysis of the Silver Market

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Silver

The silver market has once again caught investors’ interest as the price is nearing areas not seen since late 2008.

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2017 started at a low point for silver, and it seems it will end the year that way as well, meaning investors who bought at the beginning of the year haven’t suffered nor gained much.

This doesn’t mean, however, that the price hasn’t moved during the year. After the low start of the year, silver quickly tacked on about 18% to a top of $17.50 per ounce.

In terms of fundamentals in the silver market, things look a bit complicated for 2018. There are multiple forces pulling in different directions for the price of silver going forward:

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Positives

  • A sharp stock market correction can be expected to occur some time in 2018. Most likely, this will happen sooner rather than later. Stock market crashes always trigger a flight to safety, meaning gold, silver, and quite possibly bitcoin, can benefit.
  • We are seeing signs that inflation may be starting to rise again, although this is not confirmed yet. Rising inflation is always good for precious metals.
  • If the US federal budget deficit widens as a result of the new tax reform, the US dollar may suffer as a consequence. Goldman Sachs put out a note to investors in November 2017 saying that the US debt is “on track” to reach an “unsustainable” level in coming years. Fed Chair Janet Yellen has also said about the US debt that it is “the type of thing that should keep people awake at night.” Rising debt levels creates uncertainty about the economy, which is generally good for gold and silver.

Negatives

  • Central banks around the world seem committed to raise interest rates in 2018. Rising interest rates are bad for precious metals because it would make it more attractive to put money in the bank.
  • The cryptocurrency bull market is on track to continue, diverting attention and capital away from precious metals as a traditional store of value. However, this one is uncertain, as it may also be considered a positive in the way that the rise of cryptocurrencies brings the inflationary and unsustainable nature of fiat currencies into focus.
  • The US dollar may have hit a bottom in 2017 and trade higher compared to other major fiat currencies going into 2018. A stronger dollar is always bad for precious metals, which are priced in dollars.

Silver chart

When looking at the chart, we can see that silver is back down to were it started the year, which coincides with a major support area where it has turned several times in the past few years.

From a technical perspective, silver has been trading in a triangle pattern on the longer-term weekly chart, with the price now trading very near the lower end of the triangle, adding confluence to our bias that silver will trade up from here.

Silver failed to live up to our prediction from early 2017, and is now even trading well below the level from that time.

A low price by any measure combined with two major technical support levels adds confidence to our trade and makes silver a low risk and potentially high reward trade for 2018.

Depending on your own strategy and investment style, you may want to wait for the price to break out from the current triangle pattern it has been trading in for the past year and a half. You would then give up some of the potential return for an even safer trade. After that, major resistance is found around $17.50 and $18, with lots of upside potential if we can finally break through those levels.

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Analysis

Long-Term Cryptocurrency Analysis: Look Out Below?

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After last week’s observation that a major top is in or near in the segment, the Bitcoin surge continued for almost a week, with Thursday’s wild session taking the coin as high as $19,000 (the article uses Bitstamp prices) on some exchanges. While the currency already pulled back by more than 20% the long-term picture is still extremely overbought and a much deeper correction is likely in the coming weeks.

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BTC spiked below $13,000 today, violating the primary weak support at $13,300, with further levels now at $11,300, $10,000 and $9000, but stronger support only found at $8200 and $7700. Next week’s futures launch could cause another jump in trading activity, and volatility is expected to remain very high amid the likely correction.

BTC/USD, Daily Chart Analysis

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While not all altcoins participated in the, supposedly, last part of the rally, IOTA, Monero, and towards the end of the week Litecoin, also stretched above all conventional targets with IOTA also turning exponential after a deal with Microsoft. The coin exploded by more than 350% before entering an initial sharp correction, breaking the steepest short-term uptrend. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.

IOT/USD, Daily Chart Analysis

Let’s see how the long-term charts of the other altcoins look after the crazy week.

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