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Long-Term Cryptocurrency Analysis: Bitcoin and IOTA Lead Coins Higher

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The major cryptocurrencies followed through the initial post-crash healing process with a healthy rally, skipping the re-test that usually follows such a sharp move lower. The segment even powered through another ICO ban, this time in South Korea, which only caused a brief decline and the strongest coins are back at or near their rally highs.

Bitcoin getting closer to the $4400 resistance after leaving behind the $4150 level, with the most valuable cryptocurrency being in the forefront of the advance yet again. BTC is the closest to its all-time high among the majors, as it is up by more than 40% since hitting the bottom. With several strong support/resistance levels already below the current price, $4000, $3800, and $3500, the coin looks poised to test the all-time high near $5000 in the coming weeks.

BTC/USD, Daily Chart Analysis

The other majors are in different phases of the recovery, as correlations broke down since last weekend and with the prior leaders, Dash, Monero, and Litecoin underperforming the broader market, another group of coins is leading the advance. IOTA and Ripple were among the most active coins in recent days, and with the long-term charts showing potential gains, they could remain relatively strong. Let’s see the details of the daily charts.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum is battling with the $300 resistance after recovering above the key $285 level following the crash. The coin got hit hard by the Korean ban but it bounced quickly off the lows, as the short-term remains clearly positive. The token still faces strong resistance near $330 and $380, but odds favor a test of the all-time highs in the current leg higher.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin has been stick below the $56 resistance all week long, as the coin remained relatively weak after the previous stellar rally and the following crash. The coin is on the verge of a bullish MACD cross, and that could signal the end of the deep correction, and the start of the next rally.  Support is found at $51, $44, and $38, while primary resistance is ahead near $64.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple broke out of its declining short-term trendline, while the long-term picture remained neutral this week. The MACD indicator shows bullish readings, and a rally above $0.22, towards the $0.26 level seems imminent. The currency has strong support at $0.18, and near $0.16, while further resistance is ahead at $0.30.

Dash

DASH/USD, Daily Chart Analysis

Dash ended the week lower than last weekend’s levels, as the coin has been relatively weak during the post-bounce rally. The currency is still not far off its all-time high and given the relatively muted correction, more sideways price action is still likely before a sustained move higher. Support is found near $300 and $265, while resistance is ahead at $360 and near $400.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic showed surprising strength after a period of alarming weakness, and the coin is now trading above both the declining short- and long-term trendlines. That said, the long-term base formation is still ahead as resistance, but the picture looks much better than a week ago, and the current price levels are still attractive for investors. Strong support is found at the $9 level, while key resistance is ahead around the $13.50 level.

Monero

XMR/USD, Daily Chart Analysis

Monero is still inside the short-term declining trendline that dominates the correction in the coin. The currency is trading below the $100 level as well, but the long-term picture is still bullish, and after the correction runs its course 9the MACD is slowly getting closer to a buy signal) we expect the coin to outperform once again. Support is still found at $80 and $68, while resistance is still ahead at $125.

IOTA

IOTA/USD, Daily Chart Analysis

The coin has been among the strongest performers this week, as it broke out of the declining trend and from the short-term consolidation pattern as well. The MACD is clearly bullish after the lengthy move lower, and a rally above the $0.64 is likely in the coming week, with a possible test of the $0.75 level. Support is still found between $0.45 and $0.48, while further resistance is ahead at $1.10.

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)”

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 441 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

Futures Update: Deeper Correction Looms for S&P 500

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The S&P 500 FUTURES (SP) has been in a multi-year uptrend ever since it recorded lows of 665.70 in March 2009 closer to the end of the financial meltdown. If you are one of those who rode this trend early on, you would have substantially grown your capital over time. Even with the recent correction, you likely believe that the market will resume its uptrend very soon just like it did before.

Nevertheless, this is not the time to be complacent. The recent SP bounce is looking like the dead-cat type. This gives us reasons to believe that there might be more pain ahead for investors. In this article, we show how there’s a deeper correction looming for the S&P 500 index and, by extension, its futures.

Bearish Short-Term

S&P 500 futures may have rejected lower prices when it bounced off lows of 2,371 on December 26, 2018. However, there’s very little about this bounce telling us that the market remains bullish. In fact, several technical indicators suggest that this is a relief rally rather than a true recovery.

Daily chart of SP

First, we can see the SP creating a V-shaped pattern. While a market can reverse using this pattern, it rarely happens. When it does, there’s always time given for accumulation at the bottom. This is something that we do not see in the market’s V-shaped structure. Without some form of accumulation to keep the move up sustainable, the market is at risk of giving up all of its gains.

Gold (XAU/USD) as sample of V-shaped reversal

Speaking of a solid base, the rally somehow materialized even with declining volume. This usually happens in an oversold market where sellers take a step back and allow the market to recover so they can short the bounce. We can see this possibility playing out in the S&P 500 futures as the market approaches resistance of 2,619.60.

With weak volume and fading bullish momentum, we expect the S&P 500 futures to resume their slide in the next few days.

Weak Long-term Technical Setups

The technical setups in the longer time frame affirm our assumption that more pain is ahead for this futures market. First and most importantly, there seems to be a divergence between volume and price. In a healthy bullish market, price goes up as volume increases. This makes sense as a growing demand in the form of increasing volume lifts prices.

On the other hand, a rising market with weakening volume is a red flag for most investors. It hints that the market is unhealthy and may be manipulated by an unknown entity. We’re seeing  this divergence in the S&P 500 futures.

Volume divergence on the monthly chart

On top of that, the 100 MA on the weekly chart is acting as a firm resistance. It is crawling closely to our immediate resistance of 2,619.60. In addition, the weekly RSI appears to face heavy resistance at 50. All these indicators suggest that bears are primed to take over the market.

Weekly chart of SP

Projected Move

With all these bearish signals in front of us, bulls must now do everything they can to take back resistance of 2,619.60 in order to dissipate the growing bearish sentiment. Failure to do so would mean that the market has flipped 2,619.60 support into a firm resistance (S/R flip). This would send a strong message that bears are flexing their muscles.

Should this happen, we expect SP to revisit lows of 2,317 where a technical bounce is likely to happen. However, this bounce will likely be weak and would not have the steam to go above 2,469. That S/R flip should be the final nail in SP’s coffin.

Projected SP price action

A break below 2,317 would ignite panic selling in the market. The next support below that level is 1,920. Interestingly, the 100 MA on the monthly chart is also crawling around that price area. This is the target for those who want to short the market once SP takes out support of 2,317.

Bottom Line

The S&P 500 futures may have recently bounced. However, all signs point to an even deeper correction. With bearish short-term and long-term setups, the market may be headed for more pain.

 

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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3.8 stars on average, based on 308 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

Crypto Update: Coins Retreat After Rally Attempt

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While yesterday the major cryptocurrencies recovered their weekend losses and bounced back above their prior lows, the bounce got halted before changing the short-term technical setup. As the world is focused on today’s key Brexit vote, trading volumes are once again very low, but the lack of bullish follow-through is a warning sign for traders here even considering the low level of trading activity.

We haven’t seen signs of a developing leadership in recent days, with correlations remaining high and with the top coins failing at the first major levels of resistance for now. That said, should the coins hold above yesterday’s lows and push above consolidation range, the formation of a bear-trap pattern is still possible even as odds still favor the continuation of the bear market.

In light of the short- and long-term setups, traders and investors should still stay away from entering new positions, with our trend model still being on sell signals on both time frames for the majority of the top coins.

BTC/USD, 4-Hour Chart Analysis

While the breakdown in Bitcoin got bought yesterday, the bounce failed to reach the $3850 level and the most valuable coin is still hovering near the $3600 level, leaving both the neutral short-term, and of course, the long-term sell signal intact in our trend model.

A move above $3850 would be a positive sign for bulls, but odds still favor a negative outcome and a likely test of the $3000 level in the coming weeks, so even short-term traders should still away from entering new positions here. Further, weaker support is found near $3250, with resistance ahead between $4000 and $4050, and near $4450.

ETH/USD, 4-Hour Chart Analysis

Although Ethereum briefly topped the $130 level after plunging below the $120 support, a failed breakdown pattern hasn’t been confirmed in the previously leading coin, and the short-term sell signal remains in place in our trend model.

With the bearish long-term picture in mind, and with the oversold short-term momentum readings now cleared, the outlook for the coin remains negative, even as the resumption the counter-trend rally is still a possibility here. Further support below $120 is found between $95 and $100, while resistance is ahead at $160 and near $180.

Altcoins Still Stuck in Downtrends Across the Board

LTC/USD, 4-Hour Chart Analysis

Litecoin’s rally stooped near the upper boundary of last week’s consolidation range, and although the coin is safely above the key $30-$30.50 support zone, the momentum of the bounce is waning. The bearish long-term forces still seem to be dominant, and the coin is well below the primary resistance level near $34.50, so our trend model remains on sell signals on both time-frames. Further strong resistance ahead near $38 and $44 and with support is found near $26 and $23.

XRP/USDT, 4-Hour Chart Analysis

Ripple experienced a brief period of relative stability after the weekend sell-off, but that didn’t change the bearish overall picture for the coin, and technicals are still hostile for bulls here. The coin continues to hover around the $0.32 price level, but we still expect a move below $0.30 in the coming weeks with a test of the bear market lows being the most likely scenario.

Another strong support level is found near the $0.26 level, with resistance ahead near $0.3550, $0.3750, and in the key long-term zone between $0.42 and $0.46.

XMR/USDT, 4-Hour Chart Analysis

Monero is also among the weaker majors and although it bounced back together with the broader market, it failed to sustainably recapture the $45 level, and it remains in clear short- and long-term downtrend. Our trend model is o sell signals on both time-frames as well, and the re-test of the bear market low just below $38 seems very likely in the coming weeks.

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 441 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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Altcoins

EOS Price Analysis: EOS/USD Back in Unsettled Territory, as Price Runs into Sellers Again

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  • The EOS/USD bulls are unable to sustain any upside momentum following a breach of critical support.
  • Near-term supply is eyed in the early $2.5000 region. A break above would likely open the door for another retest of the big $3.0000.

The EOS price was seen creeping lower again in the early part of trading on Tuesday. This comes after a big jump to the upside seen in the second part of the session on Monday. EOS/USD had gained a chunky double-digits, around 12%, at the close of the daily. Buyers came in after the low print on Sunday 13th at around $2.25. This was within a market demand zone, tracking from $2.25-$2.35, having supported the price on occasions in December and January.

Recap: Big Breach of Critical Support

EOS/USD daily chart.

As a reminder, EOS/USD throughout its most recent bull run, which was seen from 6th December right up to 9th January, was well-supported. An ascending trend line could be observed, providing necessary comfort to the bulls. However, all runs must come to an eventual end, and the bears smashed through this support on 10th January. Given the break through this vital area, it exacerbated the move to the downside. The price had dropped a heavy 22%, taking a big blow after a strong run.

Barriers Blocking Bulls

The bulls have been cut short for now, not being able to have sustained that momentum from the session on Monday. Trading has been extremely choppy since 19th December, via the daily chart view, highlighting a real lack of consistency in either direction. A consecutive streak longer than two days from either bear or bull camp hasn’t happened since the run higher in mid-December. This demonstrates just how mundane and non-committed market participant are for now.

In addition to the last statement above, further technical levels and areas continue to plague direction. To elaborate, there are more areas that the price must deal with now in comparison to the smooth bull run higher seen in 2017. Separately, if looking at 2018, the bears generally had an easy ride south. This is thanks to the cryptocurrency instruments being so young still in age.

Key Near-term Levels

For the bulls to see greater upside, a break of near-term supply within the early $2.5000 region will need to push prices forward. This should open the door to a fast move to see a retest of the breached ascending trend line. In proximity to this is the psychological $3.0000 mark, which has proven to be a huge barrier for the bulls. To the downside, the mentioned demand area of $2.35-$2.25 is critical, and a failure to hold will be very punishing. Lastly, EOS/USD would be subject to a move sub-$2.0000, where support can be eyed. As a further worth case, then $1.5500 to be retested, the December low.

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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4.6 stars on average, based on 106 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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