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Cryptocurrency Analysis: Sell-Off Accelerates as China Bans ICOs

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The crypto segment lost $30 billion in market cap since last Friday’s all-time high, as the correction that we have been expecting started in earnest. The latest news regarding a Chinese ban on ICOs delivered a huge blow to the already fragile market and the most important coins are all substantially lower, with NEO being especially hard, given its exposure to China. Bitcoin is holding up well amid the sell-off, which is particularly heavy in the Ethereum ecosystem, with double-digit losses across the board. Ethereum is now trading back near the previously important $285 level, after quickly breaking below the $330 and $300 supports. We expect more corrective price action in the coming period, with a likely target zone between $230 and $250.

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ETH/USD, 4-Hour Chart Analysis

NEO is down by more than 35% amid the negative news, but the recently surging Litecoin is also down by almost 20% thanks to the broad selling pressure. Monero and Dash are still well above their prior all-time highs, but they are already in a 30+% correction top-to-bottom. Ethereum Classic and Ripple retraced their recent break-outs but they remain promising at the current levels, being in different phases of the market cycle than the rest of the majors. Investors are still advised to wait until the long-term overbought condition is cleared, but given the steep initial decline, the correction might unfold quicker than the previous one which took several weeks to complete. Let’s see how the short-term charts look amid the massacre.

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Bitcoin

BTC/USD, 4-Hour Chart Analysis

Bitcoin dipped below primary support today in early trading, confirming the deeper correction that we have been expecting. The coin is still in overbought territory despite the more than 15% decline, and traders and investors should expect more downside movement and elevated volatility in the coming period. Crucial support levels are found near $4000, $3800, $3500 and near $3150.

Litecoin

LTC/USD, 4-Hour Chart Analysis

LTC fell sharply together with the market, and it’s now back near the previous crucial resistance at $64. The coin remains overbought, but the majority of the price decline might be already concluded, and a volatile sideways period could be ahead. That said, the $60, and $56 levels are still below as possible targets, and traders should wait with new positions until an uptrend is established.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is trading near the $300 price level that has been a crucial support/resistance line in the recent move higher. The coin cleared the short-term overbought readings, but a re-test of the $265 support is still likely, as the long-term momentum still needs time to get back to neutral. The long-term uptrend is not in danger, but traders should be cautious with new positions here.

Ripple

XRP/USDT, 4-Hour Chart Analysis

Ripple retraced almost all of its break-out gains amid the broad correction and it now trades below $0.20 yet again. The long-term picture still looks positive for the coin, but short-term volatility could be very high, and short-term traders could face more downside. Support is found at $0.18 and $0.16 while resistance in the zone around $0.22 and at $0.26.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is also back near the crucial $16 level after touching its prior all-time high during the weekend. We still expect a strong move higher after the current correction, and the current levels are attractive for long-term positions, although more short-term losses are also in the cards. Support is found around the $14 level while resistance is ahead near $0.18 and $0.23.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero fell back to the $100 level as we were expecting, but the coin is still well above the prior highs after the monster rally of the previous period. We expect more correction in the coin in the coming weeks, with a possible re-test of the $80 level. Below that strong support is found near $72 and around $58. Resistance is now ahead at $125 and near the prior highs above $150.

NEM

NEM/BTC, 4-Hour Chart Analysis

NEM continues to trade in the same broad range pattern as before the sell-off compared to BTC. We still expect the coin to outperform the most valuable cryptocurrency and test the 0.00009 level in the coming weeks. Support levels are found near 0.0000575, and 0.000048 while resistance is ahead at 0.000065 and at 0.000075.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO got hit hard by the news on the Chinese ban, and the coin fell well below $30, and outright crashed below the $22 support as well today, almost reaching the next support zone near $16. While the long-term impacts of the ban are not clear yet, we expect high levels of volatility as the market assesses the damage. The long-term picture remains bullish and the current levels look attractive for investors, despite the uncertain short-term outlook.

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1 Comment

1 Comment

  1. Chris G

    September 4, 2017 at 9:56 pm

    Watching eth today … once it hit 310, spiked to 325 – which was fairly baffling. I can only assume more correction and volatility. Be interesting to see where ltc goes – I’m just holding back until this perfect storm settles … whew!

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

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Analysis

XRP Looking to Make a Significant Rally

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The XRP/USD pair went into a deep correction after hitting 0.29490 a month ago. It nosedived to the major support level of 0.19052. The pair consolidated for a few weeks which gave the market the legs to test resistance at 0.22924.

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Technical indicators show that the pair was ready to breach its immediate resistance, which it did this morning. Now that resistance has broke at 0.22924, it’s time to buy. This successful breakout will take the pair to 0.23997 first and 0.26563 next before hitting the target of 0.26796 which is coincidentally a major resistance level.

Technical indicators hint that the market would most likely be overbought by the time it hits 0.26796. Should it respect the major resistance level, the likelihood of the market turning extremely bearish increases. Therefore, it is recommended to closely watch your trail stops to preserve your gains.  

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Summary of Strategy

Buy: As close to 0.22924

Support: 0.22224 and 0.20081

Target: 0.26796

Stop: If the market breaches 0.20081 as next reliable support is 0.19052

 

Disclaimer: The writer 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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Analysis

Technical Analysis: Ripple Breaks Out as Bitcoin Tests Highs

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Cryptocurrencies are having another bullish session as the total value of the market surged to a new all-time high near $225 billion, with the help of the rally in BTC and Ripple, and despite the drop in the value of Bitcoin Cash. The most valuable coin its record high yet again after the brief but steep weekend correction, despite the still overbought long-term picture. We still urge traders and investors to wait for a deeper correction before entering new positions here, with support levels found at $7000, $6700, and $6000.

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BTC/USD, 4-Hour Chart Analysis

Ripple has been the other main mover of the day so far, as the coin skyrocketed on huge volume and breached the $0.26 level before turning lower and stabilizing near $0.23. The coin triggered a short-term buy signal by moving above $0.2250 and it remains bullish on both time-frames, despite the pull-back, with another major target level ahead at $0.30.

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Ripple/USD, 4-Hour Chart Analysis

The other majors are little changed expect IOTA, which further added to yesterday’s gains and reached overbought readings, while Ethereum Classic and Dash continue to drift lower in short-term correction patterns. Let’s see the detailed analysis of the short-term charts.

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