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Analysis

Daily Analysis: Gold Smashed Lower Before Central Bank Meeting Again

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2436 0.05%
DAX 12765 0.26
WTI Crude Oil 42.98 -0.22%
GOLD 1245.00 -0.90%
Bitcoin 2458 -6.23%
EUR/USD 1.1202 0.06%

Another important central bank meeting, now involving all the major ones, and another suspicious flash-crash happened in gold, similarly to the one before the Fed meeting two weeks ago. This could mean that someone woke up this morning and thought “Hmm I should probably sell my $2 billion of gold now, and why not at once?” Joke aside, the precious metal is back to last week’s levels and it will be crucial to see if it can get back above $1250, or another swing lower got triggered. Global stock markets are broadly higher today, despite the much worse than expected US Durable Goods Orders which pushed the Dollar lower again.

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Gold’s Flash Crash, 5-Minute Chart Analysis

Oil rebounded slightly today as there is no new development in the Qatar crisis, but it remains on depressed levels and the trend is still clearly lower. Apart from the Dollar weakness currency markets are calm once again, and generally, volatility is low globally. Stocks are still close to their all-time highs, but momentum remains suspicious, and the negative summer seasonality also suggests caution for stock bulls.

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Cryptocurrencies

The crypto-market remains in a deep correction, with Ethereum being down by more than 30% of its highs while Bitcoin is also trading 20% lower, near the $2500 level. All the majors are substantially lower this Monday, with Ethereum Classic and Ripple showing the most short-term relative strength, while Dash is also doing fine, holding above the $150 level. Litecoin is testing its prior all-time high after its strong move higher, while the smaller coins are also mostly down by double digits, with Bytecoin holding up well in the face of the broad decline.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The S&P 500 rallied in early trading today, and but fell back to the Friday close after the US open, as stock markets remain in a low volatility, low volume limbo below their all-time highs. The benchmark failed to gain momentum after its beak-out last week, and the crucial support level near 2417 might be back in focus this week. Below that, another key level is found at $2400 while the prior high at $2450 serves as primary resistance here.

S&P 500 Futures 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
10:00 GERMANY IFO business Climate 115.1 114.7 114.6
14:30 US Core Durable Goods Orders 0.1% 0.4% -0.5%

Key Economic Releases on Tuesday

Tuesday UK BOE Financial Report
Tuesday US CB Consumer Confidence 116.2 117.9

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Analysis

Technical Analysis: Litecoin and Ethereum on the Move as Rotation Continues

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The altcoin bull run continued today despite the US Thanksgiving holiday, as trading remained active in the majors, and another important break-out occurred, this time in Ethereum. Litecoin is also strong today, and the coin is testing the key $75 resistance level, as it follows in the track of ETH again. The currency still looks set to hit the next target at $82.50, with the all-time highs below just below the $100 level also in sight. While the long-term momentum is edging towards overbought territory, the coin remains bullish on both time-frames, with strong support still found at $64 and $56.

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LTC/USD, 4-Hour Chart Analysis

Ethereum scored a new record high after moving past $400 for the first time in five months, and considering the lengthy consolidation before the move, more upside is likely for the second largest coin. With the long-term momentum still not being overbought, the token’s price might test the $500 mark in this leg higher, with Fibonacci targets ahead at $475 and $512. Support levels are found below $400 at 4380 and $350.

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ETH/USD, 4-Hour Chart Analysis

Ripple is also attempting another bullish move, while Monero and Dash are consolidating just below their recent highs, while IOTA is in a short-term correction pattern as well. More and more altcoins are now in the latter phases of their rallies, just like Bitcoin, but traders still have opportunities with favorable risk-rewards ratios. Let’ see the short-term charts.

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Analysis

Break-Out: Another Crazy Rally in Ethereum?

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What crazy rally you might ask? Bitcoin is the star, right? Everything was about BTC (and BCH) in the last few months, and lots of traders forget the gains that ETH posted amid the take-off of the ICO Rocket during the spring.

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Comparing ETH and BTC in 2017

By the numbers, out of the two largest coins, 2017 is still the year of Ethereum as the 3600% rise in the token’s price dwarfs Bitcoin’s impressive 630% gain. Could Ethereum be on the verge of another epic surge? Before answering that question, first let’s see what happened with the coin in recent months.

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How Did We Get Here?

ETH/USD, Daily Chart Analysis

Ethereum finally broke above the magical $400 barrier that has kept a lid on the token’s price for five months after the crazy run-up in May. What first followed after that stellar move, was a 70% decline top-to-bottom, with a flush-out panic low in July.

Our trend model turned long-term positive even before the spike lower, but since then, the coin only managed to get close to the all-time highs, while Bitcoin eclipsed the previous star with its dominant performance. Now the tide might be turning, as ETH is finally gathering bullish momentum and today it breached the $400 mark, flirting with a break-out from the giant triangle consolidation pattern.

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Altcoins

Zcash Dip Offers Chance to Buy

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The ZEC/USD pair went into a downtrend for several days after hitting the 435 level in June. It shed more than half of its value before establishing strong support at 140. The market tried to reclaim resistance at 310 twice, but was sent back on both occasions. As a result, we have a massive reversal structure that might skyrocket the pair into a new all-time high.

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The market closed above 310 a couple of days ago on weak volume which is why it’s struggling to stay above that level. Technical indicators show that momentum is weakening, increasing the likelihood of a dip. A slight correction not only gives the market legs for its next move up, but it also offers you a chance to place orders.

They key indicator to watch for is volume. As long as volume remains sluggish, the market will most likely slide down to 280 first and then 262 next. That’s a good zone to accumulate positions. If volume suddenly spikes, at least 230k at Bitfinex, then we have a legitimate breakout that will take the market to 465.

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 Summary of Strategy

Buy: between 280 and 262 OR confirmed breakout with volume of at least 230k at Bitfinex

Support: 280, 262, and 243

Resistance: 310, 352, 400, and 412

Target: 465

Stop: If the market breaches 243

 

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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