Long-Term Cryptocurrency Analysis: Bitcoin, Ethereum, Ripple, Litecoin, Dash
One week after our previous long-term look at cryptocurrencies, the major coins are still in correction mode, as they are working their way through the overbought readings that built up in the monster rally of this late spring. Bitcoin and Ethereum remain in the epicenter of the correction, although compared to the first half of the week, correlations broke down slightly, pointing to a less “panicky” environment. The Monday lows are still well below the current prices, as the majors are testing strong support zones this weekend.
After three weeks of correction, and since our first warning, Bitcoin and Ethereum got very close to a being neutral considering the momentum indicators, meaning that we are likely in the bottoming process already, and the market already saw the lows. That said, given the huge prior rally, more sideways consolidation is likely before the next leg of the bull market.
BTC/USD Daily Chart Analysis
BTC more or less followed the possible trajectory that we anticipated last week, as it continues to follow the pattern of its previous complex corrections, like the one highlighted in March. We still expect more consolidation “waves” before a sustained move out of the pattern, with a possible re-test of the $2150 support, although volatility might stay muted compared to the wild moves of the previous two weeks.
ETH/USD Daily Chart Analysis
Ethereum completed a 50% correction once again, and the long-term MACD indicator is now approaching neutral territory. The coin tested and respected the long-term trendline this week and bounced off the support zone near $200 after a climactic move on Monday. The currency is right at the convergence zone that we pointed out last week, but more corrective price action is still likely after the huge rally with possible spikes lower to test the major support levels around $250.
LTC/USD Daily Chart Analysis
Litecoin is still in a different technical position than the two most valuable coins, as it is consolidating a recent break-out to new highs. The rising long-term trendline is converging with the prior high at $38 in the coming days, providing a possible take-off point for a next leg higher. That said, the correction of the two majors could still drag the coin lower to test this week’s lows, despite the bullish long-term picture.
XRP/USDT Daily Chart Analysis
Ripple is still stuck in a long-term consolidation after its 7-fold rise in two months. The coin is trading in a broad range that has been intact since the end of May. The MACD indicator is glued to the 0 level, and short-term traders are still yet to get a buy signal since the failed break-out more than one week ago. Long-term investors could still add to their positions here, near the base that formed during the correction.
DASH/USD Daily Chart Analysis
Dash has been acting strong throughout the week, and it’s trading only 15% off its prior high, putting the coin at par with Litecoin in technical strength. The long-term picture is clearly bullish, but the slightly overbought MACD and the ongoing correction in BTC and Ethereum could mean that traders still have to wait for a break-out to new highs, although a dip below the crucial $150 support looks unlikely now.
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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