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Cryptocurrency Analysis: Market Turns Lower Again Before the Weekend

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Choppy market conditions remained dominant, as we expected, after the segment-wide crash and the subsequent spectacular bounce. Trading volumes plunged back to normal levels as the majors settled down, but correlations remained high across the board, and the short-term downtrend in Bitcoin and most of the largest coins is still intact.

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The sector is headed into the weekend on a negative note, as the majors are trading near their short-term ranges, although the losses are muted so far, and the crash lows are far away from the current levels.

Bitcoin is trading right at the crucial $11,300 support/resistance level that we have been monitoring all week long, and the coin is now almost back to neutral regarding the short-term momentum. As the downtrend in the currency is still clearly dominant, and given the bearish long-term setup, we expect a move towards the crash lows before a more durable rally. That said, the outlook is now neutral after the deep correction, with strong support below $11,300 at $10,000, $9000, $8200, and $7650.

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BTC/USD, 4-Hour Chart Analysis

Altcoins are still closely following the moves in BTC, trading in similar patterns since the onset of the crash. Ripple, which has been one of the most active coins of the week turned lower of the declining trendline after topping $1.60 during the bounce. The coin that collapsed more than 70% of its highs will likely stay within its downtrend in the next weeks, but the final low might already be in and investors could still add to their positions on the short-term sell-offs near $1.25 and $0.85.

XRP/USDT, 4-Hour Chart Analysis

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum is trading near the $1000 level, as it’s moving largely in line with the other majors, within the developing short-term downtrend. The coin remains overbought from a long-term perspective and we expect the correction to continue, so both investors and traders should wait for a more favorable setup before entering new positions. Key support zones are still found near $850, $740, $625, and $575.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin dipped back below the $200 level yesterday, and it failed to recover above it today, showing signs of relative weakness again. Alhtough the coin could be among the first majors to hit a final bottom, we expect further volatile sell-offs before the end of the cycle, and traders should remain cautious with new positions although investors could accumulate LTC on the short-term sell-offs near $125 and $100.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is also among the weaker coin after the crash and it trades right in the crucial support/resistance zone around the $825 level, as we expected. The coin will likely re-test the $600-$650 zone before the end of the cycle, as the correction is still ongoing, but investors could be looking for entry points near those levels and below that around $500, as the long-term picture is more constructive now.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is still relatively strong from a technical perspective, holding up above the $30 level, after only briefly dropping below the key $23 support during the crash. We still expect the correction to continue in ETC, but the final low might already be in, and investors could already add to their holdings on the short-term sell-off near $25 and $23.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is the strongest major coin this week, holding up above the $300 level, and moving past the $330 resistance several times. Despite the strength, traders should still stay away from new positions here, as the broad correction in the segment remains intact and a re-test of the crash low at $240, or a dip to $200 is still possible, with further support found at $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO has been among the biggest losers of today’s sell-off as the overbought coin is getting closer to its rising short-term trendline. The currency is in a similar setup as Ethereum, and we expect it to undergo a deeper correction as well. Traders and investors should wait for a better risk-reward ratio before entering new positions, with key support levels found at $100, $80, $64, and $56.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA lost some of its early technical strength today, as it failed to reclaim the $300 level, but the coin remains well above the December crash lows, and we still expect a relatively early bottom compared to the other majors. That said, traders should wait for a confirmed trend change before entering new positions, while investors could already look for entry points near the main support zones between 2.25$ and $2.35 and around  $1.5, and the short-term zone just below $2.

Featured image from Shutterstock

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: No Questions Answered

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Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2718 0.97%
DAX 12,468 0.31%
WTI Crude Oil 62.61 2.02%
GOLD 1332.00 0.52%
Bitcoin 9780 -8.00%
EUR/USD 1.2324 0.26%

It was a strange day indeed in equity markets, with mixed signals popping up across the board after yesterday’s crazy quasi-FED day. An ugly overnight session, followed by a strong pre-market rally, an early-day pump, and a late-day dump. That is the summary of the day, but under the surface, there is a real struggle between market forces, with still an edge for bears in the battle for control.

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NASDAQ 100 Futures, 4-Hour Chart Analysis

It seems that the Nasdaq is still the key, as the relative strength of the tech benchmark is the most reliable gauge of the market direction, at least regarding the intraday trends. That said, at the end of the day, the Nasdaq closed in the red 4 times in a row, at least as far as the normal trading day is concerned, and still, the major indices are trading not far off last Friday’s top, despite the downward drift.

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Forex Markets and Commodities

Adding to the confusion, the Dollar corrected lower after a positive period, and with Treasury yields trading all over the place, investors were left scratching their heads yet again. The Japanese Yen was the clear winner of the day among currencies, as the primary safe-haven got bid heavily during the Asian session, and it remained throughout the up-and-downs of the day, despite the strong bounce in stocks and risk-on currencies.

USD/JPY, 4-Hour Chart Analysis

The EUR/USD pair had a very active and volatile session, but the common currency remained above the lows from two weeks ago, while also halting below yesterday’s highs, so all-in-all, no technical conclusion to draw. As in stocks, the next clear directional day will be crucial, as the tug of war is getting tenser and tenser.

EUR/USD, 4-Hour Chart Analysis

The Canadian Dollar plummeted during the day, thanks to the dismal Retail Sales figures, but it finished well off its lows, boosted by the stock recovery and the jump in the price of crude oil. The Black Gold was pushed higher by the surprisingly bullish US inventory data, and the WTI contract closed back above $62.50 per barrel.

USD/CAD, 4-Hour Chart Analysis

Gold continued to follow the Euro, finishing the day slightly higher, but the precious metal showed notable relative strength during the Asian session, and that could be the precursor of a move to new rally highs, should the bearish scenario play out in equities.

Cryptocurrencies

The segment had another bearish session, and the bleeding continued after the US session, with BTC leading the way lower this time around after a long period of relative strength. A crucial test might be ahead of the most valuable coin, as the $9000-$9200 support zone would be a perfect target for the current correction, to keep the uptrend going. That said, that zone is still almost 50% above the prior low, leaving plenty of room for the coin to bottom out.

BTC/USDT, 4-Hour Chart Analysis

With all of the major altcoins also sporting significant losses, bulls would like to see more of the early relative strength that some coins have been showing, to establish a leadership that can guide the segment out of the plunge. For now, the crash lows are way below the current levels, and the bullish long-term scenario remains intact.

Featured image from Shutterstock

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 109 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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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(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: Bulls Try to Fight Back after Ugly Overnight Session

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Following the steep late-day downturn on Wednesday, which followed the not-to-hawkish FED meeting minutes, Asian markets and US equity futures continued lower with a vengeance. The very active overnight trading is another sign of the regime change in traditional financial markets that we have been monitoring for the last two weeks, ever since the “Black Monday of 2018”.

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Dow Futures, 4-Hour Chart Analysis

EUR/USD Changing Behavior

The European session brought about an oversold bounce that stabilized markets from stocks to currencies. The EUR/USD pair that has started acting “normally” considering its relationship with US Treasury yields lately, is headed south once again, trading only 0.5% above its recent correction lows after clearly breaking below the rising trendline.

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EUR/USD, 4-Hour Chart Analysis

The bull-trap that we identified a few days ago was the start of the current leg lower, and if the regime change will be persistent, the most traded forex pair could be back to the role of the “risk-on/risk-off” indicator that has been the privilege of commodity currencies in the last couple of weeks.

USD/JPY, 4-Hour Chart Analysis

The Japanese Yen is showing notable strength after its overbought dip, and the primary safe-haven currency could be in for more gains, should the risk-selloff continue. The Yen also gained ground on the common European currency, following the dovish ECB meeting accounts and the misses in the German IFO business climate indicator and the British GDP, which all question the European growth-monetary tightening narrative.

Canadian Dollar in for a Wild Ride

USD/CAD, 4-Hour Chart Analysis

With the Canadian retail sales report and the US crude oil inventory data coming out soon, forex traders should expect sizeable moves in the recently weak currency, while the USD should also be very active during the US stock market session.

All eyes are on Treasury yields again, with the slight correction today helping the bounce in stocks and other risk assets. The Nasdaq could be the motor of a stronger rally on Wall Street, but we wouldn’t bet the house on that, as the short-term technical setup remains bearish, and a re-test of the correction lows is still the most likely scenario for the coming weeks.

Featured image from Shutterstock

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 109 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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