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Long-Term Cryptocurrency Analysis: Bitcoin, Ethereum, Ripple, Litecoin, Ethereum Classic, and Dash

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The cryptocurrency market went from hell to heaven in a matter of days, as the long-term correction that started in mid-June ended with a bang last Sunday. The liquidation-fueled final leg lower in Ethereum took the majors deeply into oversold territory, and this week was all about upside momentum adn rising prices.

That said, some of the coins, like ETH itself, are still stuck in their declining patterns, but the stronger currencies are already sporting uptrends, with Bitcoin leading the way higher after the lock-in of the BIP 91 protocol. BTC rallied by more than 30% bottom-to-top, as it got back in line with our one-month long projection for the correction.

BTC/USD Daily Chart Analysis

As we stated before the prior bearish move was the direct consequence of the spring’s stellar gains, but now, as the charts turned oversold in the latter stages of the correction odds favor at least a re-test of the previous highs in the segment. The total market value of the coins is nearing $100 billion again, with Bitcoin’s share jumping back to almost 50% amid the scaling-relief rally. As correlations naturally broke up after the panic abated, the majors will likely take diverging paths in the coming period. With that in mind, and as the weekend is quiet so far, let’s see how the most traded coins look if we take a step back.

Bitcoin

BTC broke out of the declining trend that dominated trading for more than a month and pushed above the %2750 resistance yesterday. The long-term MACD is still only in neutral territory, leaving ample room for more upside. While a short-term consolidation is possible here and some chips could be taken off the table, we expect at least a re-test of the highs and most likely a rally to new highs in the coming period.

Ethereum

ETH/USD Daily Chart Analysis

Ethereum lagged BTC in the second half of the week, and it is still trading right at the declining trendline, with strong resistance ahead between $325 and $250. The MACD is still in oversold territory and despite the current sideways price action; we expect a move out of the declining trend and the start of a new short-term uptrend.

Litecoin

LTC/USD Daily Chart Analysis

Litecoin is hovering around the $44 level after the volatile consolidation phase that took the MACD indicator back to neutral territory following the strong break-out. The currency held the above the key support zone during the expected correction, but another test of the $40 level is possible before a sustained move higher.

Ripple

XRP/USDT Daily Chart Analysis

Ripple remained inside its long-term correction pattern, as it has been relatively weak during the rebound this week. The coin is still yet to signal a clear trend change, and despite the fact that it is developing a base formation, we would still wait before opening new trading positions in XRP. That said investors could still add to their holdings on short-term dips, as the long-term momentum remains oversold.

Dash

DASH/USD Daily Chart Analysis

Dash remains the most bullish major, now joined by BTC, as the long-term MACD formed a bullish cross again, and the price of the coin is just below its all-time high after this week’ rally. An advance above $220 would signal a test of our long-term range projection target just above $250. Short-term traders should be looking for buying opportunities in anticipation of a break-out.

Ethereum Classic

ETC/USD Daily Chart Analysis

ETC has been the least volatile during the long-term correction among the majors, holding on to its lofty gains, consolidating between $14 and $18 with the exception of a couple of brief spikes. The long-term MACD is still in oversold territory, giving an opportunity for investors to add to their positions here, while the short-term picture is neutral.

How to Use These Charts?

As we stressed in our article on Bitcoin in June: “…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)”

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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Analysis

Bitcoin Update: Bull and Bear Scenarios

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To say that the last two days in crypto have been a bloodbath would be an understatement. Many altcoins have broken critical support areas. Some cryptos even registered new yearly lows. One of those is Bitcoin (BTC/USD).

Bitcoin dropped to as low as $5,188 on Coinbase and lost as much as 20% of its value within 48 hours. The move forced numerous retail traders and long term hodlers to give up their digital assets. It also reinvigorated bears who felt ecstatic that $6,000 support crumbled into pieces. Their renewed confidence gave them the voice to spread fear, uncertainty and doubt (FUD). The chatter of Bitcoin trading at $2,000 – $3,000 has been the noisiest in the last 48 hours.

If you’re an ordinary investor who believes in the revolutionary power of Bitcoin, the amount of FUD out there might shake your beliefs. However, is there a grain of truth in what bears are yapping? In this article, we reveal the possible bull and bear scenarios to prepare you for whatever comes next.

The Bullish Scenario

Bulls have a simple task ahead in the next few days. They just need to take Bitcoin above $5,800 before the week closes to preserve the weekly support. This has the potential to invalidate the descending triangle breakdown and create a bear trap. However, with heavy bearish pressure, this is easier said than done.

With that being said, the key levels to watch in addition to $5,800 are 5,500, 5,300, and 5,190. The line in sand is 4,800. Below that, we’ll very likely experience a full-blown and painful bear winter.

As of this writing, Bitcoin is working really hard to establish support at $5,500. This is a positive signal. It works well with our bullish scenario of an inverse head and shoulders reversal pattern on the 15-minute chart.

BTC bullish scenario

In this scenario, bulls have two great chances to make this work. They can create a bullish higher low setup at $5,500 or at $5,300 to complete the right shoulder.

Another play would be a quick relief rally between $5,600 to $5,700. From there, we would likely experience a heavy volume dump to prices between $4,800 – $5,190. With this scenario, we’ll get a solid double bottom structure in the 15-minute chart where bulls can stage a reversal.  

BTC double bottom

This double bottom scenario is where many hodlers would capitulate and at the same time, it would exhaust many sellers. For this to manifest, however, bulls must show that they’re ready to battle to the bitter end so they can close the week above $5,777. Otherwise, bears will continue to rampage unchecked.

The Bearish Scenario

From a technical perspective, the descending triangle breakout has an ultimate target of $2,800. In addition, Bitcoin has firm weekly and monthly support levels at $3,000. These are the reasons that fuel calls for Bitcoin trading at $3,000.

Bitcoin bear scenario

It’s safe to say that this is not a pretty sight.

For this to happen, Bitcoin must close below $5,800 this week and then retest $5,800 – $6,000 next week. This price action would confirm that $6,000 is now a resistance. Therefore, bears would be able to use all the strength of $6,000 as support and flip it into a heavy resistance area.  

If this happens, there’s a strong possibility of a long and painful Bitcoin bear market that can extend for many months. During this period, the market may range trade between $3,000 – $6,000. This is not the scenario that we’re looking for. However, it is always better to prepare for such possibilities.

Bottom Line

Richard Wyckoff said: “The more compact the trading range is, the more likely the stock is under control by professionals, and the greater the possibility for the swift explosive move upward following a spring or a shakeout…watch for them”. This is why we remain bullish in Bitcoin despite the massive dump. After the compact trading range in the last few months, we believe that this is the spring or the shakeout before the explosive move upward.

At this point, we are rooting for the bull scenarios mentioned above but we’re also seriously considering the bearish case. In short, we’re hoping for the best but also preparing for the worst.

 

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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3.7 stars on average, based on 270 rated postsKiril is a CFA Charterholder and financial professional with 5+ 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 Analysis And Chartbook: Dollar Dips on Dovish Powell as Brexit Deal Still in Question

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Friday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,711 -0.83%
DAX 30 11,265 -0.78%
WTI Crude Oil 57.59 1.80%
GOLD 1,221 0.66%
Bitcoin 5,555 -0.53%
EUR/USD 1.1380 0.50%

Today is shaping up to be another wild ride in financial markets after the recent volatile sessions, with currencies, bonds, and equities all experiencing heavy trading. The Brexit process, the confusion regarding the US trade tariffs, and the broad bearish technical shift in risk assets are all contributing to the wild moves, and Fed Chair Jerome Powell also increased uncertainty yesterday.

The central banker hinted on possible pause in the Fed’s tightening cycle next year, citing increased economic headwinds following the open attacks form President Trump regarding the “tight” policies of the bank.

As Mario Draghi confirmed the ECB’s quantitative tightening plans as well, the Greenback lost ground compared to most of its peers, even as the main European currencies continue to be under pressure due to the Brexit chaos.

EUR/GBP, 4-Hour Chart Analysis

The Euro and the Pound, which are trading near their yearly lows compared to the Dollar, are stuck in a very volatile broad trading range against each other. The EUR/GBP pair topped out just above 0.90 this year, and although since the August high it drifted back to 0.86, the Pound remains weak from a long-term perspective.

A no-deal Brexit could hurt the British currency more and even a push above the decade-long high near 0.93 could be ahead. Short-term, we expect volatility to remain high in the pair, and in forex markets in general, and a move out of the range could happen soon.

USD/JPY, 4-Hour Chart Analysis

Another possibly important move started in the USD/JPY pair and in gold in recent days, as the broad risk-off shift helped the Yen, with safe-haven flows favoring the currency and the precious metal again.

Following Powell’s dovish words, the pair could be ready to test the 112 level again, especially should the major stock indices continue lower in the coming week. Below 112, the 111.40 and the 110.70 levels provide support, while strong resistance is ahead near 113.70 and 114.50.

Another Selloff in Stocks as Bearish Pressures Mount

Global stock markets are lower today, despite yesterday’s reversal and late-day rally on Wall Street, which was sparked by renewed trade optimism, following rumors on a possible halt of the US tariffs on Chinese goods.

The rumors were quickly denied, but there is more and more evidence that the Trump administration might be changing its aggressive strategy, while China also seems more flexible in light of the economic slowdown and the turmoil in Chinese assets.

FTSE 100 Index CFD, 4-Hour Chart Analysis

The Brexit chaos is also weighing on equities in Europe and across the globe, with British assets clearly being under pressure, despite the rally attempts on the positive headlines regarding the draft withdrawal plan.

For now, the fate of the plans is still highly uncertain, despite the progress made by Theresa May. The hawkish words of Draghi also added to the bearish pressures today, as the Eurozone CPI was in line with expectations.

Nasdaq 100 Futures, 4-Hour Chart Analysis

The major US indices all opened lower today, despite the continued decline in Treasury yields, with clear weakness in the tech sector and small-caps. Industrial Production missed the consensus estimate in October, with a monthly growth of only 0.1%, and the previous reading was also revised lower.

The key benchmarks are not far above the October lows, the recent rally attempts all failed, so given the bearish global technical picture, conditions in equity markets remain hostile for bulls.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

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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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Analysis

Crypto Update: Coins Consolidate After Key Breakdown

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The cryptocurrency segment is still under the influence of this week’s key technical breakdown that carried several majors below crucial support levels. Bitcoin’s moves have been dominating the market in recent days, and as the most valuable coin formed a short-term bottom, the top coins entered a choppy consolidation phase, retracing some of their steep losses.

Ripple and Stellar continue to outperform the broader market from a technical perspective, and some other coins, like Ethereum and Monero are also holding up above their previous bear market lows, but the overall picture is still overwhelmingly bearish in the market. The total value of the coins is slightly above the $180 billion mark, but further losses are likely in the coming weeks, with all of the majors being well below the breakdown levels, confirming the move.                

BTC/USDT, 4-Hour Chart Analysis

Bitcoin found support near the $5350 price level even though it spiked as low as $5200 during the rout, while the bounce carried the coin up to $5650. The breakdown is clearly intact in BTC and our trend model remains on sell signals an all time-frames, with a test of the $5000-$5100 zone still being likely in the coming period.

Bitcoin faces strong resistance in the long-term zone near $5850, with further key levels at $6000, $6275, and traders and investors shouldn’t open new positions here, with the long-term downtrend clearly being intact.

XRP/USDT, 4-Hour Chart Analysis

Ripple overtook Ethereum in terms of market capitalization again, thanks to its relative strength this week, and the coin is still clearly holding up above the long-term support zone between $0.42 and $0.46.

That said, our trend model is still on a short-term sell signal, and given the bearish segment-wide trends traders shouldn’t enter new positions here, even as the coin will likely be among the leaders of the future rally attempts. Further support levels are found near $0.375 and $0.355, while resistance is still ahead at $0.51, $0.54, and $0.57.

Ethereum Holding Its Ground above Bear Market Low

ETH/USD, 4-Hour Chart Analysis

While Ethereum failed to recapture the $180 resistance level during the bounce, it also avoided a sustained move below the previous bear market low near $170, despite the spikes towards the $160 support. Ethereum short-term stability is a slightly positive sign, but without further signs of strength, the coin remains in a clearly bearish technical setup. With that in mind, traders and investors should still stay away from the coin, as odds still favor the continuation of the broader downtrend.

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade below the $44 support/resistance level after the clear break to new bar market lows, and it remains one of the weakest major from a technical perspective. A move towards the next major support zone near $38 is likely in the coming weeks, even if a bounce up to the $47 level is in the cards. Litecoin is on sell signals on both time-frames in our trend model as well, with further strong resistance levels ahead at $51 and $56.

EOS/USD, 4-Hour Chart Analysis

EOS is hovering around the key support zone near $4.50 since a spike towards the bear market low near $4.30 during the steep selloff. The weak bounce didn’t change the technical setup, and the coin is still likely to fall below the previous low, as the declining long-term trend is clearly intact. Our trend model is on sell short-, and long-term trend signals, with strong resistance levels ahead at $5 and $5.35.

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 396 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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