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Analysis

Long-Term Cryptocurrency Analysis: The Anatomy of a Crash

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Although the extent and the actual weight of the Chinese cryptocurrency trade ban are still questionable, the major coins outright crashed this week, accelerating the projected deep correction. The segment lost 40% of its total market value before a roaring snapback rally that eased some of the pain of crypto-bulls. Bitcoin was at the forefront of the decline, although coupled with the ICO ban, the likes of Ethereum and NEO are more affected by the new legislation, and indeed ETH fell more during the correction than BTC.

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Bitcoin is now trading back near $3600 in a very volatile environment, after breaching the $3800 level in early trading. The long-term momentum readings are quickly reaching oversold levels, and although we still expect the correction to go on in time, and a re-test of the lows is possible, the price low might already be in. Long-term investors should already be adding to their positions on the short-term dips, but a spike below the prior high could reach down to the $2800 support.

BTC/USD, Daily Chart Analysis

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The other majors are also expected to trade in volatile ranges that could be damaging for leveraged traders, but even the most overbought coins like Litecoin, Monero, and Dash are now neutral regarding the long-term picture and investors could already be looking for buying opportunities as the correction unfolds.  Let’s see the details of the daily setups.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum reached and dipped below our primary target zone for the correction yesterday, as the crash brought the coin down to $200. Now the token is trading near $250, the upper boundary of the strong support/resistance zone. The long-term picture is now slightly oversold, and the $200 level will likely be the bottom for the correction.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin spiked lower together with the broad market and found it only found support inside the long-term base formation before the huge rebound. We don’t expect the coin to re-test its lows, as several strong support levels are below the current price level, at $51, $44, and $38. The MACD indicator is neutral, and more sideways price action is likely before a sustained move higher.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple held up relatively well during yesterday’s sell-off, and the coin is back at $0.18 today, as the long-term base formation stopped the decline. XRP is holding up above the prior declining trend channel, and we still expect the currency to move towards the $0.30 level in the coming weeks, and investors could still add to their positions.

Dash

DASH/USD, Daily Chart Analysis

Dash completed a roundtrip between $300 and the prior high near $220 since last week, and the coin remains among the strongest majors. A dip back towards $265 is likely in the coming week, but we don’t expect the crash lows to be broken. Long-term investors should add to their positions short-term dips.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic is alarmingly weak after the bounce, trading well below the long-term base formation. The coin decoupled from Ripple after an extended period of similar movements, and it is now one of the weakest majors concerning the technical picture. Strong resistance is ahead around the $14 level, while support is only found near the $9.

Monero

XMR/USD, Daily Chart Analysis

Monero is also among the strongest majors, similarly to Dash, and it was among the few currencies which stayed above the June highs during the crash. The long-term MACD is back to neutral, but we expect more range trading, likely between $80 and $100, before a  sustained move higher as the broad correction concludes. Support is still found at $80 and $68, while resistance is still ahead at $125.

How to Use These Charts?

As we stressed in our article on Bitcoin: “…not all strategies are binary (either holding an asset or not).There are many long- and short-term investment and trading strategies that can be successful in a roaring bull market like the one that the crypto-coin segment is experiencing, but mixing the time-frames and mixing trading and investing (see our article on the topic) could lead to troubles.”

Here is a reminder of some of the possible strategies once again:

  • Buy and hold, without caring about day-to-day (or even month-month) fluctuations
  • Buy and hold a core position and add on the major dips; a very powerful strategy
  • Buy a certain amount every week or month, and even-out your entry price, without the hassle of timing the market
  • Try to catch major turning points to reduce and “re-boost” your position
  • Trade short-term movements with stop-losses, targets, and strict risk management (this is trading not investing)”

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Analysis

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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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

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Analysis

XRP Looking to Make a Significant Rally

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The XRP/USD pair went into a deep correction after hitting 0.29490 a month ago. It nosedived to the major support level of 0.19052. The pair consolidated for a few weeks which gave the market the legs to test resistance at 0.22924.

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Technical indicators show that the pair was ready to breach its immediate resistance, which it did this morning. Now that resistance has broke at 0.22924, it’s time to buy. This successful breakout will take the pair to 0.23997 first and 0.26563 next before hitting the target of 0.26796 which is coincidentally a major resistance level.

Technical indicators hint that the market would most likely be overbought by the time it hits 0.26796. Should it respect the major resistance level, the likelihood of the market turning extremely bearish increases. Therefore, it is recommended to closely watch your trail stops to preserve your gains.  

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Summary of Strategy

Buy: As close to 0.22924

Support: 0.22224 and 0.20081

Target: 0.26796

Stop: If the market breaches 0.20081 as next reliable support is 0.19052

 

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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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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