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Analysis

Ethereum Hits Five-Month Highs as Support for Altcoins Grows

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Ethereum trekked higher on Thursday, with prices crossing $380 for the first time since the summer. The recent up move has lacked any major fundamental catalysts, and appears to be driven largely by technical trading and improved investor appetite for all things cryptocurrency.

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ETH/USD Price Levels

Ether traded as high as $383 U.S. on Thursday before later consolidating right around the $381 level for a daily gain of roughly 2.7%. At current levels, Ethereum’s total market cap is valued at $36.4 billion.

The world’s no. 2 cryptocurrency by market cap is trading at its highest level in over five months. Prices appear to have caught a tailwind in mid-November, right around the time that the backers of the Segwit2x bitcoin hard fork abandoned their plans to split the original blockchain.

ETH/USD faces immediate support near the $355-$360 level. On the opposite side of the ledger, markets are eyeing all-time highs above $400. Market participants can continue to expect strong resistance at this psychological level. Ether is also susceptible to overbought resistance, with the Relative Strength Index (RSI) grinding toward 70.

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Ether tokens have added nearly 16% over the past five days, and are fast approaching all-tim ehighs near $396.

Despite recent gains, Ethereum has been no match for bitcoin. The original cryptocurrency surged past $8,000 this week en route to new record highs. As such, the ETH/BTC exchange rate recently found itself hovering near multi-week lows. Prices were last seen at 0.04623 for a gain of 2%. This cross has tumbled more than 43% over the past month.

With talks of $10,000 bitcoin, the ETH/BTC cross will likely face stronger headwinds in the immediate term.

Tether Controversy

Ethereum and other cryptos took a mild hit earlier this week after Tether announced a $31 million cyber breach. The heist occurred on Nov. 19 when a hacker diverted funds to an unauthorized bitcoin address. Tether has not yet been able to retrieve the funds, but it has campaigned hard to get other exchanges to blacklist the wallet address associated with the heist.

Although Tether has nowhere near the same credibility as bitcoin or Ethereum, news of any cyber attack tends to weigh on the broader market.

Ethereum wallets are constantly under attack, with Parity Technologies being the most recent example. The leading Ethereum developer apparently froze more than $190 million worth of funds because of a novice hacker. A total of 587 multi-signature wallets were compromised and a total of 513,774.16 ether were frozen.

Ethereum-based Derivatives?

Talks of Ethereum derivatives were in the news on Wednesday after Banca IM released a whitepaper detailing how an ether smart contract could be used for evaluating default risk. Banca IM, a subsidiary of Intesa Sanpaolo, believes the future of the quadrillion-dollar derivatives market may be conceived on the blockchain.

In the whitepaper, author Massimo Morino argues that the blockchain can boost transparency in the derivatives market.

He says:

“The fundamental idea is to perform a change — a reform if you want — of the business model of financial derivatives to exploit in the best way the technology of the blockchain to get derivatives which are more transparent, which are more secure.”

Disclaimer: The author 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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1 Comment

1 Comment

  1. Chris G

    November 23, 2017 at 5:17 pm

    hit my profit targets at $380 and $395, left 20% for the long run … pretty amazing – maybe time for me to start digging into alt-coin space

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Analysis

Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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