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Daily Analysis: Cryptocurrencies Settle Down as Stocks Flat on Memorial Day

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2412 0.09%
DAX 12604 0.23%
WTI Crude Oil 49.65 -0.16%
GOLD 1271.00 0.18%
Bitcoin 2180 -0.43%
EUR/USD 1.1176 0.05%

Global stock markets are little changed today, as trading volumes are low due to the bank holidays in the US, the UK and China. The major European indices are slightly higher, but remain well of their previous highs, as they continue to lag the US benchmarks. Japanese stocks are somewhat lower, as the Yen is still strong, while US futures are trading near their all-time highs after last week’s rally. North Korea conducted another missile

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Currency markets are also quiet, with only the Pound being notably stronger against its major peers, despite the continued tightening of the snap-election polls. Gold is drifting higher once again, as the US Dollar is still under pressure, and the metal is trading right at the $1270, just below the crucial resistance at $1275. Oil is slightly lower after Friday’s bounce, as it is trading near the $50 per barrel level after falling from $52 to $48 following the OPEC meeting. The long-term trading range between $44 and $54 is still intact, as fundamentals remain questionable for the commodity.

Cryptocurrencies

Cryptocurrencies are very stable today following the steep correction and the strong subsequent bounce. Total market capitalization stands at $74 billion after falling below $60 billion during the decline, while the market share of Bitcoin is back below 50% thanks to the recovery in altcoins. There are already some relatively strong coins emerging after the highly-correlated fall, with Ethereum and Ethereum Classic showing positive signs, while Monero being up by double digits this morning, trading back above the $40 level.  Volatility is expected to pick-up tomorrow as traders return form the long weekend globally.

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Monero, 4-Hour Chart Analysis

Technical Picture

The NASDAQ is trading right at its all-time high after the recent deep correction, while the broad market continues to struggle. With the crucial Fed meeting just around the corner, and Trump’s Russian ties till making waves, the strength of the index is impressive, although market breadth measure still suggest weakness in the coming weeks. Short-term support is found near the 5700 level, and below that at 5675, with the key long-term zone at around the 5450 level.

NASDAQ 100, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
15:00 EUROZONE ECB President Draghi Speaks

 

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
03:30 AUSTRALIA Building Approvals 3.20% -13.40%
09:00 GERMANY Prelim CPI Index -0.10% 0.00%
14:30 CANADA Current Account -11.4 bill -10.7 bill
14:30 US Personal Spending 0.40% 0.00%
16:00 US CB Consumer Confidence 120.1 120.3
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2 Comments

2 Comments

  1. shyam_shankar

    May 29, 2017 at 4:01 pm

    I have read in your article only which exchange to believe?
    Trading with high volumes but why you are trading in Bitfinex instead of Polonix? and its my request to give analysis over BTC not against USDT because we will be more profitable with BTC over USTD.

    Thanks

    • Mate Cser

      May 30, 2017 at 6:53 pm

      Hi, I am trading multiple exchanges (sometimes for arbitrage opportunities). I post the charts that are the most reliable for me. I will be posting the charts yuo requested from Friday when I will start posting daily analysis on the coins! Thanks again for the input!

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Analysis

Technical Analysis: Bitcoin Grinds Higher as Records Tumble in Altcoins

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The historical surge in the segment, which is the second such move this year, continued today, with another round of break-outs in some of the major altcoins and tepid gains for BTC investors. Ethereum, Ripple, Dash, and first and foremost Litecoin was leading the charge, with the recent star LTC topping $300, just after a day of hitting the $200 mark.

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Litecoin defied all odds after reaching extremely overbought readings, and the coin rode the speculative wave, turning exponential, not unlike IOTA and Bitcoin previously. With the coin being stretched in an unprecedented way on all time-frames, investors could even consider selling their core positions at the current levels, as a deep correction is almost granted in the coming period. The first meaningful support level is found at $125, and a re-test of the $100 level is probable during the next major correction.

LTC/USD, 4-Hour Chart Analysis

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Ripple finally ended a long period of relative weakness today, and the only major on a long-term by signal jumped over primary resistance at $0.26 and crossed the $0.30-$0.32 too in the euphoric sentiment. As the coin is not long-term overbought following the 6-month long consolidation, the buy signal in XRP remains intact, with the only major resistance level being found at the all-time high near $0.425.

XRPUSDT/USD, 4-Hour Chart Analysis

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Analysis

Technical Analysis: Litecoin Continues Surge as Bitcoin Tests Highs

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With the crypto world being focused on the historical futures launch, the major coins all enjoyed buying following a hectic weekend, and a volatile week as a whole. BTC itself got another boost from the widespread publicity and the volatile correction of the recent days ended, with the most valuable coin bouncing back towards its all-time high.

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While the long-term picture remains severely overbought, the short-term picture is not stretched and further gains are possible even amid the elevated correction risk. That said, investors should wait for a more favorable entry point to ad dot their holdings, while traders should control position sizes in the light of the long-term setup. Major support levels are now near $13,000, $11,300, and $10,000, with stronger levels still at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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The major altcoins are all up today, but only Monero and Litecoin are still within short-term uptrends, and the segment as a whole is still dangerously overextended, and a deeper correction is very likely in the coming weeks. LTC continued its recent break-out, getting close to the $200 level, and joining the extremely overbought group regarding the long-term momentum, and triggering a long-term sell signal in our trend model. Key support levels are found $100 at $75 and $64, with a weaker primary level at $125.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Long-Term Analysis of the Silver Market

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Silver

The silver market has once again caught investors’ interest as the price is nearing areas not seen since late 2008.

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2017 started at a low point for silver, and it seems it will end the year that way as well, meaning investors who bought at the beginning of the year haven’t suffered nor gained much.

This doesn’t mean, however, that the price hasn’t moved during the year. After the low start of the year, silver quickly tacked on about 18% to a top of $17.50 per ounce.

In terms of fundamentals in the silver market, things look a bit complicated for 2018. There are multiple forces pulling in different directions for the price of silver going forward:

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Positives

  • A sharp stock market correction can be expected to occur some time in 2018. Most likely, this will happen sooner rather than later. Stock market crashes always trigger a flight to safety, meaning gold, silver, and quite possibly bitcoin, can benefit.
  • We are seeing signs that inflation may be starting to rise again, although this is not confirmed yet. Rising inflation is always good for precious metals.
  • If the US federal budget deficit widens as a result of the new tax reform, the US dollar may suffer as a consequence. Goldman Sachs put out a note to investors in November 2017 saying that the US debt is “on track” to reach an “unsustainable” level in coming years. Fed Chair Janet Yellen has also said about the US debt that it is “the type of thing that should keep people awake at night.” Rising debt levels creates uncertainty about the economy, which is generally good for gold and silver.

Negatives

  • Central banks around the world seem committed to raise interest rates in 2018. Rising interest rates are bad for precious metals because it would make it more attractive to put money in the bank.
  • The cryptocurrency bull market is on track to continue, diverting attention and capital away from precious metals as a traditional store of value. However, this one is uncertain, as it may also be considered a positive in the way that the rise of cryptocurrencies brings the inflationary and unsustainable nature of fiat currencies into focus.
  • The US dollar may have hit a bottom in 2017 and trade higher compared to other major fiat currencies going into 2018. A stronger dollar is always bad for precious metals, which are priced in dollars.

Silver chart

When looking at the chart, we can see that silver is back down to were it started the year, which coincides with a major support area where it has turned several times in the past few years.

From a technical perspective, silver has been trading in a triangle pattern on the longer-term weekly chart, with the price now trading very near the lower end of the triangle, adding confluence to our bias that silver will trade up from here.

Silver failed to live up to our prediction from early 2017, and is now even trading well below the level from that time.

A low price by any measure combined with two major technical support levels adds confidence to our trade and makes silver a low risk and potentially high reward trade for 2018.

Depending on your own strategy and investment style, you may want to wait for the price to break out from the current triangle pattern it has been trading in for the past year and a half. You would then give up some of the potential return for an even safer trade. After that, major resistance is found around $17.50 and $18, with lots of upside potential if we can finally break through those levels.

Featured image from Pixabay.

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