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Daily Analysis: Bitcoin Steals the Show, as Stocks Remain Stable

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Tuesday Market Recap

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Asset Current Value Daily Change
S&P 500 2383 -0.23%
DAX 12478 6.00%
WTI Crude Oil 48.62 -0.45%
GOLD 1256.00 -0.66%
Bitcoin 1471 7.20%
EUR/USD 1.0891 -0.07%

 

Global stock markets are slightly higher today, following the long weekend in Europe. Last week’s trends remained intact for the most part, as the major indices are still hovering at or just below their all-time highs, with the NASDAQ and European stocks still being relatively strong. Apple will report earnings today after the market close, and the Federal Reserve holds its monetary meeting on Wednesday, and those could mean that today’s session will be a less active one. Japanese stocks continue to rise strongly as the Yen’s weakness still pushes the Nikkei higher.

The Dollar and the Yen are still drifting lower while the Euro and the Pound remain among the strongest major currencies, as traders are still unwinding bets against European assets following the first round of the French elections. The Swiss Franc is also benefiting from the broad European rally, while other safe-haven assets like the Yen and gold are still struggling. Oil is also very weak despite the positive global sentiment, as the fundamental weakness of the commodity outweighs the risk-on environment, pointing to further losses for the sector.

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Gold futures, 4-Hour Chart Analysis

Bitcoin

Bitcoin’s surge to all-time highs intensified this week as the largest cryptocurrency exploded above $1400, topping its previous record high by more than 10% now. BTC continues to ignore the fork-related fears and the rise of its competitors, and it looks set to hit $1500 in the coming days. Several coins entered a correction after the broad rally last week, as traders focused more on Bitcoin. Ethereum, Dash, Ethereum Classic, Ripple, Monero, NEM, and Litecoin are all off their recent highs.

Bitcoin, 4-Hour Chart Analysis

Technical Picture

The DAX is still trading in a holding pattern since the French election, near its all-time high at 12,500, but it still failed to cross that crucial level despite the positive sentiment. The bearish cross on the MACD indicator suggests short-term weakness. The benchmark might be ready to re-test the previous highs near 12,370 or even the rising trend-line at 12,250. Another major support zone is found at that level between 12,085 and 12,150.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Monday and Tuesday

Day Country Release Actual Expected Previous
Monday UK Treasury Sec Mnuchin Speaks
Monday US Personal Spending 0.00% -0.10% 0.20%
Monday US ISM Manufacturing PMI 54.8 56.6 57.2
Tuesday CHINA Manufacturing PMI 50.3 51.4 51.2
Tuesday AUSTRALIA Base Interest Rate 1.50% 1.50% 1.50%
Tuesday UK Manufacturing PMI 57.3 54 54.2

 

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
10:30 UK Construction PMI 52.1 52.2
11:00 EUROZONE Prelim GDP 0.50% 0.40%
16:30 US Crude Oil Inventories -3.6 million
16:00 US ISM Non-Manufacturing PMI 56.1 55.2
14:15 US ADP Employment Report 178,000 263,000
20:00 US FOMC Statement
20:00 US Base Interest Rate 1.00% 1.00%
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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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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.

Featured image courtesy of Shutterstock.

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