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Long-Term Cryptocurrency Analysis: Bear Market Continues With Major Technical Breakdown

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After months of choppy consolidation, yesterday, we saw the largest move in the cryptocurrency segment since April, which took the majors below key technical levels. Bitcoin’s drop is the most important event, since the most valuable coin violated a structurally important base support for the first time since its historic bull run to $20,000 started.

As we warned repeatedly, the market didn’t show signs of healing during the sideways drift, since no leadership developed, and the coins failed to show follow-through following the, sometimes explosive rally attempts, so our trend model remained overwhelmingly bearish throughout the consolidation.

The top altcoins completed their structural breakdowns well ahead of BTC, and the stability of Bitcoin was the most encouraging sign for crypto-bulls, so now, the broad selloff confirmed the next lower in the bear market.

BTC/USD, Daily Chart Analysis

After violating the primary support at $6275, Bitcoin’s selloff accelerated below the weaker $6000 level and the key zone near $5850 wasn’t enough to support the coin. The structural breakdown will likely lead to a test of the $5000-$5100 zone, while an unlikely recovery would be a very positive development. Primary resistance is now ahead near $5850, while further major support zones are found near $4500 and $3600, and traders and investors still shouldn’t enter new positions here.

ETH/USD, Daily Chart Analysis

Ethereum fell to a marginal new bear market low, outperforming Bitcoin from a short-term technical perspective, but that’s not enough to warrant optimism with regards to the long-term setup. ETH is still in a clear long-term downtrend despite the lengthy consolidation phase, and a test of the $160 level is likely in the coming period.

The coin is still on sell signals on both time-frames in our trend model, and traders and investors should stay away from new positions, with further support found near $130 and with resistance levels ahead near $200 and $235.

Ripple

XRP/USD, 4-Hour Chart Analysis

While Ripple is still the most bullish top coin from a technical perspective, it also got dragged lower by the broad selloff. XRP break the rising short-term trendline but it managed to hold the crucial long-term support zone between $0.42-$0.46, avoiding a long-term sell signal in our trend model.

That said, given the segment-wide trend caution is still warranted, and traders and investors shouldn’t enter positions here. Below the key long-term zone, strong support is now found at $0.355, $0.32, and $0.26, while resistance is ahead at $0.51 and $0.64.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to be among the weakest majors from a long-term perspective, and it fell clearly below its previous bear market low near $47, as expected. The coin also violated the next major support zone near $44, likely setting up a test of the $38 support.

LTC is still on sells signals on all time-frames, with the steep declining trendline clearly being intact, and traders and investors shouldn’t enter new positions here.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is currently testing its previous bear market low, showing some relative strength to the bearish leaders of the market, but the long-term picture remains clearly negative and new lows are very likely in the coming days.

The coin is on sell signals on both time frames in our trend model, and traders and investors should stay away from entering positions here. Below $130, further support levels are found near $115 and $105, while resistance is ahead near $150 and $170.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to lead the way lower, together with Litecoin, and it fell to a new bear market low yesterday. The coin is now testing the $7.5 support, after spiking below it yesterday, and the long-term picture continues to be bearish, so traders and investors should still not enter positions here. The next major support zone is found near $5.5, while resistance is head near $9.30 and $11.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is among the strongest coins from a short-term perspective, clearly trading above its bear market low despite yesterday’s broad breakdown. That said, the bearish move triggered a downgrade in our trend model, and although the coin will likely be a leader in the coming rallies, traders and investors shouldn’t enter positions here.

The long-term downtrend is clearly intact in the coin, with resistance levels ahead at $100, $108, and $125, while key support is found near $80.

NEO

NEO/USDT, 4-Hour Chart Analysis

Despite the brief periods of relative strength, NEO continues to be among the weakest majors, and the coin fell to a new bear market low below the key support zone in the $13-$13.75 area. The coin is on clear sell signals on all time-frames in our trend model, and further new lows are likely in the coming period. Strong resistance levels are ahead near $16.50, and between $21 and $22, and traders shouldn’t enter new positions in the coin.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA also hit new bear market lows during yesterday’s plunge, briefly falling back to the key $0.35 level. Now, the coin is hovering around the $0.40 level, and the sell signals are intact on both time-frames in our trend model.

IOTA is relatively weak compared to the broader market, especially from a long-term perspective, and traders and investors should wait until, at least, a short-term trend change before considering new positions in the coin, with strong resistance now ahead in the $0.45-$0.48 and near $0.57.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS confirmed its recent weakness yesterday as it plunged lower together with the broader market, and it traded below the key $4.5 level for the first time since August. That said, the coin is still above its bear market low, and bulls can still hope for a successful test, although odds favor a breakdown to new lows. The next major support level is found at $3.5, while resistance is ahead at $5 and near $5.35.

Stellar

Stellar/USDT, 4-Hour Chart Analysis

Stellar has been one of the strongest coins in recent months, and it is still trading well above its bear market low, similarly to its close peer Ripple. Stellar breached the key support/resistance zone surrounding the $0.24 level again, and the possible failed break-out above the declining long-term trendline is threatening with a test of the structurally important $0.1775-$0.195 zone. For now, the long-term picture is neutral, but traders and investors shouldn’t enter positions here.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 421 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Forex Update: Dollar Drifts Lower With All Eyes on the Fed

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1368 0.19%
GBP/USD 1.2648 0.20%
USD/JPY 112.55 -0.23%
AUD/USD 0.7201 0.34%
GOLD 1,250 0.14%
WTI Crude Oil 48.53 -1.32%
BTC/USD 3,565 1.96%

With just one day left until the week’s main event, the Fed’s rate decision, it’s no surprise that forex markets are having a very choppy session, with the Dollar and the main safe-haven assets being in focus. The USD has been under pressure in the last couple of days amid the louder and louder critiques regarding the Fed’s rate hikes, and although economic numbers continue to be positive in the US, and the consensus still points an increase tomorrow, leaving the rates unchanged wouldn’t be as shocking as one week ago.

Economic numbers were mixed today, with the German IFO index missing the consensus estimate, but with the US housing market showing stability for the second month in a road. Building permits and Housing Starts both bounced back more than expected amid the pullback in Treasury yields in November, pointing to a still relatively healthy economy in the US.

While the Dollar only managed a small pop higher following the releases, as Treasury yields plunged to new multi-month lows again, the underlying bullish trend seems safe for the reserve currency.

Technical Analysis

GBP/USD, 4-Hour Chart Analysis

The Great British Pound is having another active session, and although it briefly surpassed the crucial 1.27 level against the Dollar, it fell sharply later on, leaving last week’s key technical breakdown intact.  While choppy trading is expected across the forex segment up until tomorrow’s key Fed announcements, the Pound could remain active, with the Brexit chaos and Theresa May’s shaky position still causing headaches for traders.

EUR/JPY, 4-Hour Chart Analysis

While risk assets rebounded today after yesterday’s volatile and bearish session, the main safe-haven assets, such as the Japanese Yen and gold continue to perform well, especially compared to the risk-on currencies. The EUR/JPY pair which has been trading in a broad bearish consolidation pattern since October is testing the key support zone between 127.50 and 127.75, threatening with a key breakdown in the coming weeks. While the short-term momentum indicators are slightly oversold, the pair is clearly bearish both short- and long-term and traders should be looking for entry points on the short side.

USD/CNH, 4-Hour Chart Analysis

Some analysts call the Dollar/Yen pair “most important currency pair of 2019”, and the pair continues to trade in the close vicinity of its October low, despite the recent trade-related optimism. A clear dovish surprise tomorrow could send the Yuan soaring, even in light of the recent weak Chinese economic data, but for the coming months, new highs are very likely (meaning new lows for the Yuan), and a drop to 6.85 would be an optimal entry point for traders.

WTI Crude Oil, 4-Hour Chart Analysis

Oil continues to be in a steep broader downtrend, and despite the deeply oversold long-term momentum readings, the crucial commodity only managed to consolidate in a sideways trading range after dipping below the key $50 per barrel price level in the WTI contract.

Yesterday, the price of the contract fell below its prior low, and today the commodity plunged by more than 5%, violating the $47.50 per barrel level for the first time since mid-2017. Barring a quick recovery, the breakdown could extend to the $44 per barrel level but a strong support zone is already found between $46.50 and $47.

Key Economic Events Tomorrow

ChartBook

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

AUD/JPY, 4-Hour Chart Analysis

GBP/JPY, 4-Hour Chart Analysis

USD/CHF, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

 

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 421 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

2018 Top Stocks

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

As 2018 is heading towards its end, one can say it was a harsh year for stock investors. The major US indices are on track for yearly losses, while over 2017 they were 30% up. Let us see, however, which companies were the biggest gainers in 2018, with the largest yield, excluding the dividends.

Traditionally, biotech companies are leaders, with thousands of percent YoY growth; however, one would surely rather buy shares of a famous company with a solid track record than make wild guesses whether a new biotech starlet will rise from a few cents to a few bucks or not. The cannabis-related companies were among the leaders this year, too, with their yield growing by 1,000% or even more right after IPO’s; Tilray (NASDAQ: TLRY), for instance, added 1,500% just in two months. This was more like of a bubble, however, that finally did explode, with the price going back to its normal levels.

Apart from the unknown and small companies, the top gainer is Twilio Inc. (NYSE: TWLO), which rose by impressive 306% over 2018.

Founded in 2008 and headquartered in San Francisco, CA, Twilio is a tech company that develops online communication software. It successfully ran its IPO on NASDAQ in 2016. Since then, its earnings have always beaten the analysts’ expectations, reaching a total of $169M, from initial $64M.

MongoDB (NASDAQ: MDB), another tech company, is second. Mongo was founded in 2008 and is headquartered in New York City.

In 2017, it ran its IPO, but it was not until February 2018 that its share price suddenly went massively higher – the yield rise totaling 201%. The earnings report released in early 2018 attracted a lot of new investors, as the company beat many analysts’ expectations.

Tabula Rasa HealthCare Inc (Nasdaq: TRHC), yet another tech company, takes third place. This one was founded in 2009 and is headquartered in Moorestown, NJ. The company operates only in the US, developing various healthcare technologies. Over 2018, Tabula Rasa HealthCare stock price rose 169%.

While some tech companies rising nicely, the whole sector has been desperately down.

Social media giant Twitter (NYSE: TWTR) went up by 65%, but at the same time, Facebook (NASDAQ: FB) lost 18%, under pressure coming from both privacy scandals and the shortage of new users.

The Dow Jones Industrial Average (INDEXDJX: DJI) failed to rise by even 1% in 2018, losing instead around 0.91%. However, some companies included into this index managed to rise by dozens of percent.

Speaking about the biggest losers, Goldman Sachs (NYSE: GS) takes the ‘lead’ here, with a 31% fall over 2018. The bank is followed by IBM (NYSE: IBM) and Caterpillar (NYSE: CAT), that also failed to rise and plunged by 21.30% and 20.00%, respectively.

Just like the DJIA, the S&P 500 has been down so far, losing 1.68%. Still, some companies included into this index managed to rise by as much as 60%.

The worst S&P performer was General Electric (NYSE: GE), which is now attempting to reduce costs and stay in the market; it looks like investors do not trust this company enough, though, that’s why General Electric has lost almost 60% so far this year.

The best performer among indices in 2018 is Nasdaq 100, which added nearly 4%. Among the leading companies in this index, one should note Amazon, Illumina, Netflix, O’reilly, Twenty-First Century Fox, and Workday, all rising by over 40% YoY.

Meanwhile, the Chinese JD.com Inc (NASDAQ: JD) lost 47%, mostly because of the Sino-US trade war. Besides, its CEO, Liu Qiangdong, was arrested being accused of sexual harassment, which added pressure to the company and reduced the trust among the investors. In case Liu is sent to jail, the risks for JD.com will increase drastically.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 22 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Altcoins

EOS Price Analysis: EOS is Set Up for Bigger Gains, Following Recent Technical Development

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  • EOS has jumped around 45% between the sessions of 15th – 17th December. 
  • Bulls shrug off all negative related news flow that has surrounded EOS in recent weeks.

The EOS/USD bulls are on a serious mission to recovery. Unlike several of its peers, a slowdown in momentum has not been seen with the EOS price. More importantly, a breakout has been observed from a range-block, of which EOS/USD was confine within. This had been the case since the 7th December, managing to escape however on 17th and capitalize further on that.

EOS Shakes off Negative Commentary

Over the past few weeks, there have been several negative bits of news flow. Recently, as covered by Hacked in a prior article, the Cardano founder, Charles Hoskinson, had a fair few words to say about EOS. He had noted that action from regulators was potentially right around the corner for EOS. Hoskinson had specifically raised concerns about the EOS token sale.

Elsewhere, it was recently covered by Chinese press that EOS decentralized apps (DApps) have been victim to hacks totaling around $1 million since July. The report cited data which was collected by PeckShield, who are a blockchain security organization. This suggests that the DApps on EOS have been hit by at least 27 breaches from July up to late November. This is an amount of 400,000 EOS, equivalent to 8 million yuan, at the time of the published report.

Lastly, at the back-end of last month, there was some FUD surrounding the CTO of Block.one, Daniel Larimer. The community and social media space were concerned about Larimer working on new projects. This prompted worries that he may be leaving EOS, keeping in mind the EOS mainnet hadn’t even reached a year.

EOS has pretty much shrugged much of this FUD off, as seen with this latest rally. It has far outperformed its peers with the big gains collected over the past two sessions.

Technical Review EOS/USD

EOS/USD daily chart

EOS/USD had a decent extension to the upside after breaching the confinements of the detailed range-block.  The bulls initially jumped a chunky 45% over the period of 15th to the 17th December. However, into the session on Tuesday, the price has run into some minor resistance, seen at the 4th December high area. This can be noted within $2.60 territory.

The pullback being observed at the time of writing isn’t too much of a surprise, given the burst higher in such a short time frame. Profit-taking is only natural in this case. It is a minor retreat ahead of further potential moves north. Eyes will be on the breached range-block for support, the top of that seen at $2.18.

Should the bulls gather enough momentum for a push above the minor near-term resistance seen, then a fast 60% move could be seen. This would take EOS/USD back towards $4.40, where another minor supply zone is observed. Further north, a reclaim of the pre-November fall levels, i.e., $6 territory, is the next major target.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 88 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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