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Long-Term Cryptocurrency Analysis: Bitcoin and Ethereum Rally Continues amid North Korea Fears

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The most valuable coin topped $60 billion in market cap during the week for the first time ever, doubling from the correction lows in July in three weeks. The SegWit rally helped the whole segment in leaving behind the more than one-month long-correction, but the long-standing majors failed to break-out to new all-time so far, as the up and coming coins with momentum drew capital and the past week’s geopolitical tensions favored BTC as a safe haven asset.

BTC/USD, Daily Chart Analysis

Bitcoin completed the long-term correction and break-out pattern that we anticipated in June, and now it’s getting long-term overbought again, although the previous extreme readings are not yet hit. The final target of the move is around $4200, but we advise investors to reduce their holdings on the way up, as corrections tend to be violent from overbought readings. As Bitcoin is so much ”ahead of the pack” concerning long-term momentum, better reward/risk opportunities lie in the other majors, such as Ethereum, Litecoin, and Dash. With that in mind let’s see how the daily charts look after this bullish week.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum has been consolidating for most of the week, after hitting $310 on Monday and pulling back towards the $285 support. The long-term momentum indicators are still signaling plenty of upside potential, and a rally towards the previous all-time high seems likely in the coming weeks, with the well-established uptrend in place. The $330 level is the primary resistance here, with support found at $285 and near $250.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin recently provided a bullish cross on the daily MACD after the correction that started in July. The coin rallied up above $50 before entering a short-term correction with the other majors. The long-term picture is clearly positive, and an advance towards the $58-$60 zone is still likely in the coming weeks.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple failed to break-out from its protracted correction pattern that has been dominating the market since May (after a 6000% rally). The $0.16 support and the $0.18 resistance are in focus now, but the $0.22 level would be the strongest resistance in the case of a break-out.

Dash

DASH/USD, Daily Chart Analysis

Dash is still the closest to its all-time highs among the majors, although it failed to produce a break-out lagging BTC and ETH during the bullish move. That said, the long-term uptrend is clearly intact while the short-term triangle consolidation pattern is still holding the coin back. The range-projection target remains at $260, while support levels are found at $190, $175, and $150.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic continued to trade similarly to Ripple, staying within its consolidation pattern while holding above strong support. The coin remains bullish both short- and long-term, but a traders should wait with significant new positions until a break-out form the downtrend. The long-term MACD is neutral giving more opportunity to investors to increase their core positions.

Monero

XMR/USD, Daily Chart Analysis

Monero short-term rally halted at $52, but the coin remains relatively strong, given the almost 100% rally of its correction lows. The $46 support could be in the center of attention until the short-term correction runs its course, while a rally to $58 is still very likely in the coming weeks. Further support levels are found near $42 and $38.

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 291 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: Bulls Hold Their Ground as Coins Settle Down

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Trading volumes and volatility declined substantially in the cryptocurrency segment this weekend, as the major coins are trying to hold the key support levels that are just below the current prices. For now, Bitcoin, Ethereum, and Ripple all managed to avoid a break below the June lows and the technical damage is limited among the smaller coins as well, despite the still dangerous setups on the long-term charts.

That said, the general character of the market is still bearish, with high correlations between the majors, and robust resistance levels capping the rally attempts in most cases. With all of those in mind, and given the still active short-term sell signals in our trend model, traders should still not enter new positions here, as a test of the lows is likely in the coming week.

The market is still missing a leadership that could turn the short-term trend around, and the relatively weak coins that have been leading the way lower in the recent period are still not showing signs of strength, despite the occasional short squeeze rallies.

BTC/USD, 4-Hour Chart Analysis

BTC tried to get back above the $6275 support/resistance level several times since falling below it on Thursday but the attempts all failed so far. The coin is still in a clear downtrend, although the previous lows haven’t been tested yet.

From a long-term perspective, a durable break below $5850 would signal a structural bear market, so the coming period will be crucial for the whole segment. Primary support is at $6000, while resistance is ahead at $6500, $6750, $7000, and $7350.

Still No Real Momentum Among Altcoins

ETH/USD, 4-Hour Chart Analysis

The basic setup among the largest altcoins is unchanged similarly to BTC, with Ethereum trading between the $400-$420 support zone and the $450 resistance level since the Monday plunge. The coin is holding up above the June low, and it’s still relatively strong from a longer-term standpoint compared to Bitcoin.

On the contrary, ETH is looking weak short-term, and that also points to the continuation of the declining segment-wide trend. ETH is facing further resistance near $500, while support below $400 is found at $380 and $360.

XRP/USDT, 4-Hour Chart Analysis

Ripple barely managed to avoid a break below the June lows, and the third largest coin remains very weak from a technical standpoint, and strong selling pressure is apparent in its market. The coin should stay above the $0.42 level to avoid major technical damage, and he coming days could be crucial for bulls, with strong resistance ahead around $0.45 and $0.51.

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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4.6 stars on average, based on 291 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: USD/INR Showing Signs of Weakness Yet Remains Bullish Long-term

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The US Dollar/Indian Rupee (USD/INR) pair has been in a strong bull run ever since it took out resistance of 53.50 in April 2012. The breakout ignited a massive rally that pushed the pair to as high as 69.528 in August 2013. In a little over year, investors raked in almost 30% in profits.

Unfortunately for buyers at this level, 69 proved to be a major resistance. Five years later, that resistance is still giving investors nightmares. The good news is time appears to be on the side of the bulls. In this article, we show why long-term investors shouldn’t lose sleep even though USD/INR appears to be heading down.

The Pullback of USD/INR is a Setup for a Comeback

USD/INR has looked unstoppable recently after it generated a higher low of 63.16 early this year. While the rally was impressive, the pair eventually ran into a brick wall at resistance of 69. So far, bulls look exhausted. It seems they don’t have what it takes to breach a resistance level that has stood for half a decade.

USD/INR Daily Chart

A quick look at the daily chart reveals multiple bearish signals. First and most important, bulls attempted several times to go above 69 but to no avail. The long red candle yesterday symbolizes their defeat.

On top of that, a bearish divergence emerged on the daily RSI. This is compounded by the bearish cross on the daily MACD. If that’s not enough, the 4-day, 8-day, and 21-day moving averages are all trending south.

As an investor, it is easy to lose your confidence in the market after seeing these signals. However, the incoming drop is actually good for the overall health of the market. It is very likely that bulls will take advantage of this temporary weakness and buy on dips. This sentiment is one of the reasons why we believe USD/INR remains bullish long-term.

The Emergence of a Large Continuation Pattern

Breakouts from multi-year consolidation periods often spark a rally that generates handsome returns to investors. This is what happened when USD/INR broke out of the inverse head and shoulders pattern in April 2012.

USD/INR Inverse H&S

Now, it seems that USD/INR is looking for a repeat performance while dancing to a different tune. The pair appears to be in the final leg down of a large ascending triangle pattern, thus explaining the short-term weakness. This is actually one of the best structures that can take down a major resistance like 69. The series of higher lows puts tremendous pressure on the resistance.

USD/INR Weekly Chart

As bulls hold on to positions, the supply in the market becomes more and more limited. This forces new investors to buy at higher price, hence the formation of higher lows. Eventually, the supply becomes so tight that even a five-year resistance like 69 won’t be able to withstand the onslaught of buyers.

When that happens, USD/INR is likely to explode like it did before.

Bottom Line

USD/INR might be on the way down. However, we believe that this pullback is nothing but a setup for a comeback. The impending retracement is most likely the last wave of an ascending triangle pattern. Investors can sleep soundly, confident that the market will likely reward them with substantial profits in the future.

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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3.7 stars on average, based on 191 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

Pre-Market: Dollar Jumps as Chinese Troubles Mount

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Global stock markets are a tad higher today following the US open, with the main US indices lagging behind somewhat after a hectic overnight session. With forex markets stealing the show yet again, equities tried to maintain their bullish momentum from yesterday, but the after-hours gains were mostly erased thanks to the renewed rally in the US Dollar.

S&P 500 Futures, 4-Hour Chart Analysis

With the economic calendar being empty in Europe and the US, all eyes were on some of the big US banks that reported earnings before the bell, kicking off the earnings season. Wells Fargo (WFC) missed expectations, while JP Morgan (JPM) and posted better than expected numbers, but for now, the market’s reaction is muted, and the two giants have already been diverging in line with today’s surprises in recent months. Citigroup (C) also beat the consensus estimates, but the stock opened lower as the guidance disappointed investors.

WFC, 4-Hour Chart Analysis (JPM Comparison)

Reported earnings are set to hit record highs thanks to the tax cuts and the modest growth in the US, but as usual, the market’s reaction will be more important than the actual numbers, especially given the strong global divergences that we have been monitoring in recent months.

Commodities Mixed as Yuan Tumbles but Dollar Rally Looms

The Chinese trade balance release made the biggest waves so far today, as the record high level of the indicators points to a widening momentum difference, with regards to growth between the two largest economies of the planet. The recent trade conflict between the US and China seems to be hurting the latter country more, and if we look at asset prices, the divide is even more apparent.

USD/Yuan, 4-Hour Chart Analysis

The Chinese Yuan got close to its recent lows against the Dollar after the release and the reserve currency gained ground compared to most of its peers, which is another bad news for emerging market currencies, which remain under pressure.

Copper Futures, 4-Hour Chart Analysis

With the Greenback’s strength weighing on commodities, the relative strength of copper is worth noting, as the battered metal remains above the key support zone that we pointed out earlier this week. Despite the bounce, Dr. Copper is still signaling troubles for the global economy, with the Chinese woes especially hurting the global growth narrative. In the meantime, crude oil is virtually unchanged after the recent volatile period, while gold is testing its recent low near $1240, trying to stabilize in the face of the strong Dollar.

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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 291 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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