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Long-Term Cryptocurrency Analysis: Bitcoin Enters Correction as Altcoins Break Out

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The segment had a very eventful week, considering the cancellation of the Segwit2x fork, the bullish moves in several of the major altcoins, the new high in Bitcoin Cash, and the late-week dip of Bitcoin that stirred up the market.

BTC spiked higher to hit a new record high right after the Segwit2x drama, but the long-term forces got the better of the coin, and it fell more than 20% top-to-bottom, to hit a short-term low near $6300. The long-term setup remains overbought, and we expect further correction in the coming week, with support levels at $6300, $6000, $5800, and $5400. Traders and investors should wait with opening new positions, as a re-test of the previous major break-out level at $5000 is likely before the end of the deeper correction.

BTC/USD, Daily Chart Analysis

The prospects of the major altcoins still look more promising, even after the gains of the week, although volatility will likely remain elevated thanks to Bitcoin. Ethereum and Ripple are lagging their peers in the current move, as first Ethereum Classic and Litecoin, then Monero, IOTA, and Dash took center stage.

This weekend ETC is back in the driving seat, rallying hard today in Asian trading and hitting our next major target at $18. As the bullish setups are still intact in most of the coins, let’s see how the long-term charts look in detail after the busy week.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum is still stuck in the long-standing trading range between $285 and $315, despite the two failed rally attempts above the pattern in recent weeks. Although the coin is still above the rising long-term trendline, we would like to see a confirmation of the trend soon, in order to keep the buy signal intact. The long-term MACD remains in neutral territory thanks to the sideways price action, and targets are still ahead between $330 and $350, at $380, and near $400.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin first hit our initial target at $64 after its break-out than spiked as high as $67, just to enter a volatile short-term correction towards the end of the week. Despite the strong moves the long-term setup is virtually unchanged, with the daily MACD still being in neutral territory, and the coin being among the relatively strong majors from an investment perspective. Support levels are now found at $56, $53, and $51, with further targets ahead at $75 and $82.50.

Ripple

 

XRP/USDT, Daily Chart Analysis

Ripple experienced a failed break-out from the short-term trading range amid the altcoin rally, and it fell back into the pattern on Friday, confirming the short-term relative weakness. Traders should wait for a short-term trend change before entering new positions, while investors could add to their positions, as long-term momentum is neutral. Support is still found just below $0.20, $0.18, and $0.16, while resistance is ahead near $0.22 and $0.26.

Dash

DASH/USD, Daily Chart Analysis

Dash broke out of its lengthy correction pattern and rallied past $330 but failed to pass the $360 level for now. That said, the coin remains one of the strongest altcoins, and we expect a test of the all-time high near $400 in the coming weeks. The long-term MACD is far from being overbought, and despite the likely increase in volatility, the short-term uptrend is also encouraging. Support levels below $330 are at $300 and $265.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic consolidated its recent gains in a bullish fashion during the week, attempted a failed move above the short-term pattern on Friday, but surged up to our next target at $18 today in early trading. While the lofty gains of the coin will likely lead to more shot-term corrections, ETC remains bullish on all time-frames, and a test of the $23 resistance is likely in the coming weeks, with key support levels at $16 and $13.50.

Monero

XMR/USD, Daily Chart Analysis

Monero joined its closest peer Dash and broke-out from the lengthy consolidation pattern between $80 and $100. The coin breached our primary target level near $125 before entering a short-term correction, which left the bullish move intact. We still expect a test of the all-time high near $150 in the coming period, as the long-term momentum remains close to neutral.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA led the altcoin rally regarding percentage gains, as it rallied from the vicinity of the $0.35 level and reached the $0.60 level above our primary target at $0.56 before entering a short-term correction. Traders should still play the developing uptrend, while investors should hold on to their positions here. Support levels are found between $0.45 and $0.48, while further targets are ahead at $0.64 and $0.75.

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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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 348 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

Markets Looking for Direction as Dow Eyes All-Time High

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Global stocks have been trading without clear direction so far today, even after Asia kicked off the day in a bullish fashion, with the Shanghai Composite rallying for the second session in a row following Trump’s tariff announcement. The Nikkei retreated a bit after its recent surge, but Europe followed China’s lead and the majority of US stocks are also sporting gains, even as the Nasdaq is in the red, with the likes of Amazon (AMZN), Microsoft (MSFT) and Apple (AAPL) lagging behind.

Dow 30 Index Futures, 4-Hour Chart Analysis

The Dow, which has been relatively strong in the past weeks is outperforming again, thanks now mainly to the jump in mega-cap banks, and the index is edging ever closer to its all-time high from January which is less than 1% away currently. Should the industrial average set a record high, the correction that started with the February mini-crash would be erased by all the US indices, further widening the divergence compared to the rest of the world.

DAX 30 Index CFD, 4-Hour Chart Analysis

Looking closer at Europe, the DAX is trading at its highest level since the first days of the month, similarly to the EuroStoxx50, but the longer-term downtrends are not in danger yet. British assets were in the center of attention today, since the CPI came in higher than expected in the UK, giving a brief boost to the Pound in the generally choppy environment in the Forex segment.

In the US, the housing market provided the most excitement, with building permits significantly missing the consensus estimate of 1.31 million, coming in at 1.23 million, while housing starts beat expectations with 1.28 million units vs. the 1.24 units expected. The sector remains under pressure from rising rates, and activity is clearly below the cycle-peak earlier this year.

US Yields Continue Surge after the BOJ Meeting

2-year US Treasury Yield, 4-Hour Chart Analysis

The upward pressure on yields is apparent today again, with Treasuries plunging and rates rising across the curve. Today, the 30-, 5-, and 2-year yields all hit multi-year highs, and the 10-year yield is also close to the highs it hit in May, as rate hike odds continue to climb before next week’s Fed meeting.

USD/JPY, 4-Hour Chart Analysis

The Bank of Japan didn’t surprise the market today, sticking to its policy despite some recent tightening rumors, and the Yen is virtually unchanged after the decision, with a slight bullish bias.

Gold Futures, 4-Hour Chart Analysis

Commodities are higher today, even as copper gave back most of its early gains, with gold drifting higher towards the $1210 level and WTI crude oil getting back above the key $70 per barrel level. The precious metal is boosted by the slightly weaker Dollar, while oil gained ground after the larger than expected crude inventory draw in the US.

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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 348 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

Crypto Update: Worst Seems to be Over for Stellar and Cardano

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With so many cryptocurrency pairs losing as much as 90% of their value from this year’s high, it may seem that altcoins are deep in bear territory. Even if you’ve been following our bullish breakout series, the pullbacks in the last two few weeks would have made it easy for you to doubt our claims. However, we stand by our assertion that the overall crypto sentiment is slowly becoming bullish. The altcoins that we cover today serve as additional evidence.

In this article, we show how the worst appears to be over for Stellar and Cardano.

Stellar/Bitcoin Analysis

The last two weeks have been very difficult for Stellar/Bitcoin (XLM/BTC) investors. The pair appears to have breached the uptrend line when it dropped to as low as 0.00002933 on September 11, 2018. At that price level, XLM/BTC lost over 56% of its value from the 2018 high of 0.00006789.

Those who cut their losses after the pair breached the uptrend support would have been badly whipsawed. Stellar/Bitcoin eventually managed to recover the support.

Weekly chart of Stellar/Bitcoin

With the recovery of the support, the outlook is bullish for XLM/BTC. First, the false break of the support is bullish. In most cases, this can ignite a rally to the top end of the range or the resistance.

In addition, the weekly RSI appears to have broken out of its own falling wedge. This is a very good sign that bulls are gaining momentum. Keep in mind, the RSI has been trapped inside this falling wedge since April 2018.

Lastly, the recovery of the support marks the end of the E wave, which is often the last wave down. With bulls taking back the support, we have a convincing case that the worst is over for XLM/BTC.

Cardano/Bitcoin Analysis

Just like XLM/BTC, the last two weeks have also been difficult for Cardano/Bitcoin (ADA/BTC).The pair came off lows of 0.00000969 on September 12, 2018. At that point, the market was down by almost 90% from the 2018 high of 0.00008788.

To many crypto investors, ADA/BTC may be fighting to stay alive. Bears have given their best shot and it may have appeared that the market was down for the count. However, just as ADA/BTC looked hopeless, the market bounced back like a true champion.

Weekly chart of ADA/BTC

As if on cue, ADA/BTC bounced as soon as it hit the support trendline of the falling wedge. This price action emboldened bottom fishers to enter long positions. The increasing demand coupled with decreasing supply due to bearish exhaustion are creating the ideal conditions for a bullish reversal.

As of this writing, ADA/BTC is taking out resistance of 0.000011. Breach of this support will enable the market to reverse its trend and bid goodbye to bear territory.

Bottom Line

Cryptos are slowly stepping out of bear territory. The last few weeks have been difficult but overall, altcoins are becoming bullish. This seems to be the case for both XLM/BTC and ADA/BTC. The worst appears to be over for the two altcoin pairs as they prepare to finally reverse their trend.

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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3.6 stars on average, based on 235 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Analysis

Ethereum Making a Decision Where to Go

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Ether is losing its value slightly today on Sep 19, trading at around $207.98. Losing 0.25% on Wednesday is not that surprising after a very hard Monday (although Tuesday was neutral). The crypto was above $210 when the session started, but then failed to stay near the local highs, says Dmitriy Gurkovskiy, Chief Analyst at RoboForex.

On H1, the bearish trendline is at $216, which is confirmed on D1. The resistance levels at $216 and $220 are strong, and they must be broken out in order to go up or at least pull back upwards.

In case Ether fails to find any drivers, it will likely consolidate at around $205. This is exactly where the key support lies, while the resistance is at $216, as mentioned above.

The MACD is negative on D1, moving along the signal line, still giving a moderate buy signal, while the Stochastic is not going anywhere and is not issuing any signal, while being in the positives.

Lately, Ether is very much volatile, with no certain direction. Last week the cryptocurrency spiked 32%, but early this week it reverted and started falling. Ether is vulnerable to the general negative sentiment in the crypto market, although the inside news influence it, too.

People are waiting for the Constantinople update, as well as for the introduction of Ether futures on CBOE which should take place before the end of the year. Meanwhile, low activity in ICOs does no good to Ether’s price either.

Recently, news has come that the Ethereum network reduced its reward for mined blocks, from 3 to 2 ETH. This nearly equals the profits of Ether and Bitcoin miners, so some ETH miners are sure to switch to Bitcoin after this happened, especially those that are unable to cover their costs and expenses (and there are quite a few).

The only positive piece of news now is the pending payment option in MyCrypto wallet designed by Ethereum. This option enables scheduling the payment date and time, which simplifies matters when it comes to recurring payments, such as subscriptions.

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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4.4 stars on average, based on 7 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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