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Litecoin Down 30% from Record High as Correction Continues

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Litecoin (LTC/USD) prices have seen heavy volatility over the past three weeks. Following a series of all-time highs, prices are down more than 30% in a synchronized global collapse instigated by China’s ICO ban.

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LTC/USD Correction Wipes Out Early-September Gains

The LTC/USD peaked at $90.90 on Sept. 2, according to CoinMarketCap. At $90 a pop, litecoin’s market cap approached $4.8 billion as 24-hour volume peaked at more than $1.8 billion. Prices are down more than $30 over the past two weeks to reach the current level of $61.00. The token is trading within a narrow range at the start of Thursday’s session.

To be frank, litecoin was severely overbought at the start of the September following a month of lateral moves. The Relative Strength Index has since moderated below 50.00. More correction is expected in the coming weeks, as prices target the corresponding Fibonacci retracement levels between $60.00 and $51.00.

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Crypto Meltdown Shaves $40 Billion Off Market Value

The major coins have declined sharply this month after Chinese regulators banned initial coin offerings (ICO), the crowdsourcing model that has taken the world by storm. China is said to be mounting a broader attack on the digital currency market, including an all-out ban on bitcoin exchanges.

The ban will only apply to trading of cryptocurrencies on exchanges, leaving OTC markets unaffected. Trading volume is expected to fall dramatically as a result, especially given China’s out-sized role in the crypto market. The country accounts for about 23% of bitcoin trades. It is also home to some of the world’s biggest bitcoin miners.

Digital currency is a contentious topic for Chinese policymakers, who have zero tolerance for any activity that undermines stability. The People’s Bank of China has intervened in the market on several occasions to evaluate the risks. For some analysts, the latest crackdown is a backhanded attempt at controlling capital flight.

Litecoin’s Future

As the fifth-largest cryptocurrency by value, litecoin has attracted a lot of attention over the past nine months. The bitcoin rival confirms payments faster and is more adaptive to up-scaling. Like bitcoin, the litecoin token is deflationary in nature because of the simple supply/demand logic that underlies it.

Just as bitcoin will have 21 million coins in its entire lifespan, litecoin will only ever produce 84 million. This finite supply is a big draw for investors.

Litecoin creator Charlie Lee says the major difference between bitcoin and altcoins is that the former will be used as a store of value, whereas the latter will be used for purchases.

Litecoin enthusiasts cite transaction speed, supply size and use case as the major catalysts for its expansion. These are also some of the more compelling reasons why they prefer it to bitcoin. However, as Melwin Philip of Seeking Alpha notes, there’s no reason why bitcoin and litecoin can’t be used in tandem.

Charlie Lee drives this point home when he describes bitcoin as “crypto gold” and litecoin as “crypto silver.”

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Altcoins

Trade Recommendation: Enjin (ENJ)

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Enjin Coin has recently finished its ICO and is currently available on a few exchanges. The primary metric to look at is the market cap of a company, especially after the initial exchange selloff. Most ICO investors are looking for a coin with a small market cap so that they can get 2x – 5x return. Enjin Coin has a very low market cap at the moment in relation to the maturity of the company. This will be a great candidate to swing trade. There are four reasons this coin is a swing trade candidate besides the fact that it has dipped to previous lows and is a great buy at the moment.

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1. Enjin currently has a contest running on Binance.com that will pay large amounts of ENJ tokens  to the top holders during the competition. This ends on November 25th. Basically, you just have to buy ENJ on Binance and hold it until the end of the contest. The top holders will be rewarded. Here is the contest info: Enjin Binance Contest

2. Enjin is releasing its Mobile Smart Wallet as well as the Minecraft plugin soon. This will allow game developers to use ENJ in the gaming community.

3. The chart shows the MACD crossing upward over the EMA 9-day signal indicating another bullish run.

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4. Enjin could be compared to GameCredits, which is currently trading on Bittrex. GameCredits has a market cap of $123,000,000; DigiByte has a market cap of $85,000,000. If Enjin only reached the market cap of DigiByte that would be a 5x ROI and if it reaches GameCredits’ market cap then investors would see an ROI of 8x. For the short term, the entry point is 0.00000265 BTC with a stop loss order placed at 0.00000242 with a profit target at 0.00000318 BTC.

Market: ENJ/BTC
Buy: 0.00000270 BTC
Stop: 
0.00000248 BTC
Profit Targets: 
0.00000324 BTC – 0.00000328 BTC

If your profit target hits 0.00000324 BTC, you will have made 20% return.

Disclaimer: The analysis is invested in ENJ.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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Cryptocurrencies

Trade Recommendation: Zcash

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The market is in the uptrend and we have to search for buy opportunities. MACD and DMI support upward movement and we can trade based on a breakout signal above 300.00 resistance level. If the price can break this resistance, we’ll get an additional signal confirming the upward movement. Entry level is 302.00 with stop orders at 283.80 level. Profit targets are 320.00 and 350.00 levels. This is a short term trade, but the part of trade volume can be left for long run. If you don’t use leverage, trading volume for this trade is up to 10% from your deposit.

Market: ZECUSD
Buy: 302.00
Stop: 283.80
Profit Targets: 320.00 and 350.00

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The trading signal is based on the Poloniex chart.

Disclaimer: The analyst is invested in Zcash.

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