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Analysis

Daily Analysis: North Korea back in Trump’s Crosshairs?

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2438 0.03%
DAX 12789 -0.21%
WTI Crude Oil 43.84 0.74%
GOLD 1247.00 0.24%
Bitcoin 2720 2.53%
EUR/USD 1.1144 0.07%

Global markets are recovering from the small shock that Donald Trump caused yesterday, when he updated the world regarding North Korea on Twitter. The unusual tweet sent risk assets tumbling, and caused a sudden spike in Bitcoin and Treasuries. Stock markets are still well below their highs from yesterday, but they bounced off the overnight lows in thin summer trading. Trading volumes are expected to remain muted, while day trading to get increasingly challenging, as volatility continues to hover around multi-decade lows.

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GBP/USD, 4-Hour Chart Analysis

Commodities and the major currencies are mostly unchanged with the exception of the Pound that posted a healthy rebound following two days of losses. The GBP was lifted by the speech of a Bank of England member, as the central bank is still a bit schizophrenic when it comes to the future of interest rates. The Dollar is consolidating near its post-Fed highs, and that keep the pressure on gold that is still trading below $1250. Oil is slightly higher today after a favorable US inventories release.

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Cryptocurrencies

The coins are also choppy today, even after the brief volatile period yesterday, with Ethereum’s relative weakness and BTC’s strength being the most notable changes since the sudden move. ETH is trading near the $350 level after spending several days in the vicinity of $375 resistance. Ripple is still trading above the crucial $0.30 level after yesterday’s rally, but the momentum of XRP stalled during the sharp dip in the evening. The other major currencies are not showing strong moves, while interestingly Bitcoin’s market share is back at the 40% of the total coin-market cap of $112 billion today.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The NASDAQ is still acting weak (the S&P 500 hit new all-time highs yesterday mind you), as it has been the case for almost two weeks now.  The support at 5650 and the short-term resistance near 5775 still hold, and although a surge above the latter could set up a move to the previous highs, the picture looks more bearish given the weak bounce. Volume has also been progressively getting lower during the consolidation phase, as the MACD indicator got back to neutral.

NASDAQ 100 Futures, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
10:30 UK Public Sector Credit 6.0 bill 7.3 bill 9.6 bill
16:00 US Existing Home Sales 5.62 mill 5.54 mill 5.57 mill
16:30 US Crude Oil Inventories -2.5 mill -1.2mill -1.7 mill

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
14:30 CANADA Core Retail Sales 0.6% -0.2%
16:30 US Initial Jobless Claims 241,000 237,000

 

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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.

Featured image courtesy of Shutterstock.

 

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