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Analysis

Cryptocurrency Update: Ethereum Leads Rebound

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Bitcoin

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BTC led the decline at the end of last week, and the rebound also started when Bitcoin bounced off the $1875 support. Since then, the correlation between the coins broke down significantly and BTC has been drifting higher, hitting $2300 before today’s US session. While the rally was strong, caution is still the name of the game here, as the short-term technical picture still is still neutral at best. Another re-test of the $2000 level remains the most likely scenario, with the trend line of the recent rally being in danger.

Ethereum

ETH emerged as the leader of the rebound, jumping above the $200 level and to a new high against BTC, almost doubling in value from the Saturday bottom. Ethereum’s market capitalization reached 50% of Bitcoin’s value, as it remains the cryptocurrency with the quickest expansion rate in Dollar terms.

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Ripple

Ripple has been lagging the other majors throughout the rebound, and it fell almost 10% against BTC today, XRP is below the short-term resistance level at $0.2275 and it might be ready to test the long-term trendline near 0.17. A rally above 0.25 would open up the road for a new advance.

Litecoin

Litecoin’s technical position was the least affected by the deep correction, as it remained in the broad consolidation that it has been trading since topping out 3 weeks ago except a short spike lower. The forming base between $20 and $23 is serving as primary support, with strong resistance at $26.50.  The primary support might be in focus in the coming days, while a rally above $27 would be strongly bullish development.

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5 Comments

5 Comments

  1. embersburnbrightly

    May 31, 2017 at 12:40 am

    I suspect Bitcoin will indeed struggle for a while to reach any further massive gains, with some short-term further corrections possible. It seems a lot of the money in the cryptocurrency market is being drawn out currently in support of Ethereum. I think it is just a matter of time before Litecoin breaks through to begin another rally, given that Litecoin can be bought at a good rate currently and the coin offers faster and cheaper transactions than Bitcoin. I feel it has been off the radar a bit as Bitcoin hit some key psychological numbers; but that Litecoin’s time to shine is coming. Ripple may indeed come down a bit further in the short term, but it may not be a bad idea to use any further low rates to stock up a bit on Ripple and Litecoin, prior to the almost certain rebound and subsequent rally from these two altcoins. I used the same approach with Ethereum, buying extra coins when the price dropped for a bit. Investing in those extra ether coins is certainly paying off handsomely now — with a 154% gain (and growing) in about 1 month. I must also give acknowledgement and thanks to Hacked.com for helping to steer me in that direction. I am new to this but learning quickly, in no small part due to the information provided here. Thank you!

    • embersburnbrightly

      June 1, 2017 at 4:04 am

      As I type this, slightly more than 24 hours following my initial comment above, Litecoin is up 11% and Ripple is up 36%. Ethereum continues to hold steady. The muse Kenny Rogers once sang, “You gotta know when to hold ’em; know when to fold ’em.” Very happy right now to have held onto my Ethereum, Litecoin, and Ripple!

      (Might also be the first time that Kenny Rogers was referred to as a muse??)

      • Mate Cser

        June 1, 2017 at 5:20 am

        Absolutely, in this market selling your core positions in a correction might make you regret it quickly. The fundamentals remain rock solid, but as a trader, especially on leverage, you gotta control risk. These moves, however big the percentages are, didn’t change the overall technical setup.

        • embersburnbrightly

          June 1, 2017 at 5:49 am

          I am finding this site to be a wealth of information; and Ripple is currently up by 52%. Wow. I know it won’t last and that a sell-off for profit is inevitable, but it seems like there is still room for additional growth longer-term with this coin. Thank you for the reply!

  2. Gabriel

    May 31, 2017 at 7:54 am

    Thank you for this analysis. Despite the aggressive ups and downs, it is interesting to see that new bases are forming and that long term trends are holding.

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Analysis

Daily Analysis: Dollar Rally Continues amid Fed Chair Confusion

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2554 -0.09%
DAX 12995 -0.07%
WTI Crude Oil 51.53 -0.66%
GOLD 1287.00 -1.22%
Bitcoin 5652 -0.86%
EUR/USD 1.1751 -0.38%

Yesterday’s trends are mostly continued in financial markets, such as the low-volatility levitation in stocks and the slightly more active trading in currencies with the apparent Dollar strength. The Great British Pound continued to be under pressure amid the amplified Brexit-related worries, but most of the other majors also lost ground to the Greenback.

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The Dollar rally has been fueled by the rise in the odds of some of the hawkish Fed Chair candidates, while overall, the “race” for the positions looks more chaotic than ever. Interestingly, the long-end of the yield curve is refusing to follow the short-term moves, and without the effects of the Fed’s QE program, the yield curve would probably be inverted by now, signaling strong recession risks.

Dollar Index (DXY), 4-Hour Chart Analysis

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The major stock indices are virtually unchanged yet again and even the previously surging Nikkei entered a consolidation, adding to the unusual October lull. Commodities have been quite active thanks to the Dollar’s vigor, with crude oil and gold both turning lower. Oil gave back most of yesterday’s gains as the Iraqi-Kurdish conflict turned out to be less violent than previously feared, and the brief rally fizzled.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The major coins are having a mixed session at best, as yesterday’s rebound wasn’t durable, and most of the coins turned back lower again. That said, despite the recent choppy price action, the total market cap of the segment is close to its all-time high, even as only Bitcoin is trading near its own record price level.

The optimism regarding Ethereum major Byzantium upgrade wasn’t enough to lift the second most valuable coin today, and the price of the ETH token retreated below the key $330 level after touching $350 yesterday after the upgrade’s lock-in. Ripple and NEO have been among the most active majors today, but with opposing performances, as Ripple fell significantly after yesterday’s break-out attempt, while NEO defied gravity and jumped above the $30 level after a corrective period.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The S&P 500 is grinding higher despite the overbought short-term momentum readings, and the benchmark is trading very close to its all-time high. The 2550 level is still in focus, but until volatility remains near record lows, the minuscule moves are unlikely to change the technical setup. While a sudden drop in prices could quickly negate the recent break-out, the consolidation could very well lead to further upside, as bulls remain firmly in control, despite the lofty valuation levels.

S&P 500 Futures, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
02:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.00% 3.00% 2.90%
11:00 GERMANY ZEW Sentiment 17.6 20.3 17
12:00 EUROZONE Final CPI 1.50% 1.50% 1.50%
15:15 US Industrial Production 0.30% 0.40% 0.20%
15:15 US Capacity Utilization Rate 76.00% 76.20% 76.10%

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Analysis

Technical Analysis: NEO Jumps as Broad Markets Turns Lower

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As the new waves of regulatory changes keep on hitting the segment, the major cryptocurrencies are mostly lower today. After the major update of Ethereum, and the recent surge in the price of Bitcoin, choppy conditions developed, with no clear short-term trend in most of the coins.

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NEO is the best performing major today, as it surged back to the $30 level after a frustrating period that was dominated by a downward drift.  The coin is now just below the key resistance level, and it could be ready to test the $34 level, with a further target found at $40. The long-term picture still looks positive, with strong support levels at $27 and $25.

NEO/USDT, Daily Chart Analysis

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Ethereum is in a consolidation after the encouraging rally towards the end of last week, while Bitcoin is also correction after its stellar rise. The two largest coins pulled the rest of the majors lower, while Ripple remained very volatile after touching the $0.30 level yesterday, trading below the $0.26 again.

Litecoin, Dash, Monero, and IOTA are all a bit lower today, while Ethereum Classic found some relative strength, although it remains stuck in a declining short-term trend. All in all, the segment is still in a clear uptrend, so let’s see which coins are the most promising regarding the short-term picture.

(more…)

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Analysis

Daily Analysis: Volatility Near Record Low 30 Years After Black Monday

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2555 0.12%
DAX 13003 0.09%
WTI Crude Oil 51.88 0.82%
GOLD 1296.00 -0.61%
Bitcoin 5680 2.95%
EUR/USD 1.1793 -0.25%

Stocks markets in the US are at a standstill near their all-time highs, with the major indices trading in extremely narrow ranges yet again. Volatility, as measured by the VIX, is close to its all-time high, in stark contrast to the average October readings, as this month is the most negative for equities regarding seasonality. In fact, this October is the least volatile ever so far, while this week is the 30th anniversary of the most volatile day ever on Wall Street.

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A Riskless Market?

On Black Monday in 1987, the Dow crashed by more than 23% during one session, as widespread bullishness coupled and novel portfolio techniques lead to a massive wave of selling. Although such one-day moves should be prevented by circuit breaking rules in today’s market, the notion that risk is non-existent in the current environment is as dangerous as it was three decades ago.

VIX, Weekly Chart

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Stocks have been very quiet across the globe today, with only the Nikkei continuing its break-out to two-decade highs yet again. In Europe, British assets were the most active, as the Brexit talks seem to be in quite a big trouble, and that pushed the Pound and the Euro lower compared to the Dollar. The Greenback’s rally put pressure on gold as well, and the Japanese Yen also declined, as safe-haven assets were sold in the calm environment.

Nikkei Index, 4-Hour Chart Analysis

Oil has been very active as the Iraqi army took control of Kirkuk defying the Kurdish resistance, the WTI contract rose as much as 2% before retreating below the $52 per barrel level, and as we speculated during the weekend, the spike is unlikely to cause a structural change in energy markets, and we expect the range trading environment to continue in the crucial commodity.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

Today was a big day for the crypto segment thanks to the Byzantium update of the Ethereum network, and although the hard fork went smoothly, the session ended on a slightly negative note. Ethereum pulled back towards the $330 support/resistance level, while Bitcoin remained stuck near the $5700 level after recovering from Sunday’s dip.

Ripple has been the other major mover of the day as the coin first surged higher and hit the $0.30 resistance just to fall back swiftly below the $0.26 level towards the end of the day. Despite the decline, the currency is still in a clear uptrend, but more volatile moves are expected in its price. Among the smaller coins, Stellar Lumens more than doubled in price after the announcement of a deal with IBM, as blockchain adoption continues in full force, pointing out the sound fundamentals behind the boom in the segment

ETH/USD, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
3:30 CHINA CPI 1.6% 1.6% 1.8%
3:30 CHINA PPI 6.9% 6.3% 6.3%
14:30 US Empire Manufacturing Index 30.2 20.3 24.4

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
2:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.0% 2.9%
11:00 GERMANY ZEW Sentiment 20.3 17.0
12:00 EUROZONE Final CPI 1.5% 1.5%
15:15 US Capacity Utilization Rate 0.4% 0.2%
15:15 US Industrial Production 76.2% 76.1%

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