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Daily Analysis: Crypto-Rally Still in Focus as Stock Markets Remain in Limbo

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2441 -0.45%
DAX 12174 -0.45%
WTI Crude Oil 48.45 1.32%
GOLD 1294.00 0.31%
Bitcoin 4181 3.79%
EUR/USD 1.1812 0.43%

The broad rally in cryptocurrencies stole the show today, as financial markets remained hesitant before the much-awaited Jackson Hole FED-symposium. With trading volumes still being very low across the board, the relatively busy currency markets dominated the session. The much worse than expected US New Home Sales number put some pressure on equities and the Dollar, while the European PMI reports came in mixed. With the Fed’s annual meeting starting tomorrow, we expect volatility and volumes to pick up during the last two days of the week, with a strong focus on the Dollar and US Treasuries.

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NASDAQ, 4-Hour Chart Analysis

The major indices are trading slightly lower after the two day rebound, but they remain well off their correction lows, despite the still apparent internal weakness. European stocks are down again, as the Euro gained ground once again on the Greenback, as Dollar was pushed lower by the chatter regarding a possible government shutdown in the US. The Great British Pound also continued its bearish run, as evidence is mounting that the Brexit process is already affecting growth. Oil and gold are both up, as the precious metal continues its bullish consolidation below $1300, looking ready to finally exit its long-standing trading range. Oil is helped by the slightly bullish US inventories data, but it remains inside a declining short-term trend and below the key $48.50 level.

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Gold, 4-Hour Chart Analysis

Cryptocurrencies

All the major coins are up today, as the rebound in Bitcoin and the break-out of Ripple pulled the market higher, and he all-time high in total market capitalization also improved sentiment. BTC is back at the $4200 level, although the overbought long-term readings should still be alarming for investors here. The prior movers are holding their ground well, with Dash still hovering around $300, and Monero touching $100 for a new high in early trading before turning south. NEO ended its short-term correction with a bang, as the up-and-coming coin shot up by 20%, exiting its downtrend. As the cryptocurrency segment is worth more than $150 billion now (a staggering 200% jump off the correction lows) it seems that institutional adaption is back on track after the feared BTC fork.

XRP/USDT, 4-Hour Chart Analysis

Technical Picture

The most traded currency pair remains in a clear uptrend after the recent correction. The MACD indicator is back on a short-term buy signal after the bottom that formed just below 1.17. The pair might be ready to test the 1.20 level, but volatility is expected to rise significantly in the back end of the week as the Fed’s symposium starts. A clear break below 1.1675 could trigger a deeper correction, as the rising trendline converges with a strong support/resistance zone in the coming days there. The 1.1850 and 1.19 levels are ahead as short-term resistance.

EUR/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
9:00 EUROZONE ECB President Draghi Speaks
9:30 GERMANY Manufacturing PMI 57.8 57.8 58.1
9:30 GERMANY Services PMI 53.3 53.3 53.1
10:00 EUROZONE Services PMI 54.9 55.4 55.4
10:00 EUROZONE Manufacturing PMI 57.4 56.3 56.6
16:00 US New Home Sales 571,000 615,000 610,000
16:30 US Crude Oil Inventories -3.3 mill -3.3 mill -8.9 mill

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
10:30 UK Second Estimate GDP 0.3% 0.3%
10:30 UK Business Investmets 0.2% 0.6%
14:30 US Unemployment Claims 237,000 232,000
14:30 US Existing Home Sales 5.55 mill 5.52 mill
All Day US Jakson Hole Symposium

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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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