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Long-Term Cryptocurrency Analysis: Bitcoin Outshines Altcoins Again

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The most valuable coin had another encouraging week, as it emerged from a brief but violent correction, just to reach new highs towards the end of the week, draining capital from altcoins. The total value of the market is stagnating near the all-time high, but BTC crossed the $100 billion mark as it surged past the $6000 price level, controlling 58% of the market.

With the long-term MACD clearly being overbought, and as the long-term target has been hit, investors should now be looking for exit points, even as the short-term uptrend is intact. The range projection target of the recent correction is found at $7000, but correction risks are already high, and only small positions should be kept in the current setup.

BTC/USD, Daily Chart Analysis

Most of the major altcoins are trading in narrow ranges this weekend after a slightly bearish week, as the optimism surrounding Ethereum’s major update faded and the second largest coin re-entered its previous range.

Litecoin, Dash, and Monero are still looking encouraging despite the lengthy correction, while the recently, while the relatively weak Ethereum Classic IOTA continue to show worrying signs. As the Bitcoin long trade is getting stretched,  let’s see the how the daily charts of the altcoins are shaping up.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum reversed its pre-Byzantium gains and dipped briefly below $300 amid the early-week correction but it recovered to the prior trading range, and remains bullish regarding the long-term picture. We still expect the coin to test the $380 level in the coming weeks, and only a break below the rising trendline would change the long-term setup. Support is still found at $300, $285, and $250 while resistance is ahead between $330 and $350.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin also fell sharply during the dip, and it is back below the previous trend channel, despite showing relative strength during the rebound. The coin still faces strong resistance near $64, but we expect the long-term rising trend to prevail, although more sideways price action is possible before a move towards the all-time high, especially if BTC enters a correction soon. Crucial support levels are still found at $56, $51, and near the $44 level.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple had a very volatile week after the break-out attempt that tested our primary target at $0.30, but failed at the crucial level. The coin fell all the way back to the initial break-out level after exiting the short-term trend, and although the long-term setup is still bullish, more volatile consolidation is now likely. Support levels are found just below the $0.20 level, near $0.18 and $0.16, while resistance is ahead around $0.22 and $0.26.

Dash

DASH/USD, Daily Chart Analysis

Dash remained very calm amid the volatile moves in the segment and it continues to trade in the correction pattern that developed after the August rally. The coin is well inside the long-term uptrend and we expect the advance to resume with no durable move below the current range, but the short-term picture is still only neutral. Long-term support is found at 4265, while key resistance is ahead at $360 and near $400.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic is trading below the $11 level again after struggling throughout the week, and failing to move above short-term resistance at $12.50. The coin is far from a short-term buy signal, as it is stuck in a downtrend, but the long-term picture is not decisively bearish, and a recovery is likely, with the current price levels still being attractive for investors. Crucial support is found at $9, while resistance is ahead around $13.50 and $16.

Monero

XMR/USD, Daily Chart Analysis

Monero has been closely correlated in recent days with Dash once again, although it outperformed its closest peer last week. The coin is trading in a very narrow range between the strong levels near $80 and $100, with the long-term picture still being very positive for investors. We still expect a strong leg higher following the consolidation, with targets at $100, $125, and around $150 and support below $80 near the $68 level.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA remained under surprisingly strong selling pressure throughout the week, and contrary to our expectations it failed to recover above the $0.45 level, as the short-term downtrend is still intact. The coin is currently testing the key $0.35 level, and a move below that would warn of further weakness, although the long-term picture is still encouraging for now. Above the $0.45-$0.48 zone, further targets are ahead at $0.56 and $0.64.

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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4.6 stars on average, based on 354 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

Stocks Go Nowhere Ahead of the Fed

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Global stock markets had a very quiet Tuesday, as traders took a step back before tomorrow much-awaited Fed rate decision. While most of the major indices finished the day virtually unchanged, risk assets gained ground in general, as investors sentiment improved following the slightly nervous Monday session.

DAX 30 Index Futures, 4-Hour Chart Analysis

European and Asian stocks were steadily holding on to last week’s gains, with even the Chinese market settling down with only slight losses, despite the country’s exit from the scheduled trade talks with the US.

On Wall Street, the Nasdaq and the Russell 2000 outperformed the Dow and the S&P 500, signaling a risk-on shift under-the-hood, even as the major indices traded in very narrow ranges in the low-volume low-volatility environment.

EUR/USD, 4-Hour Chart Analysis

Currencies had a much more active season, even as the major pairs didn’t experience real trending moves, before the central bank meeting. The EUR/USD pair, which has been in the center of attention for days finished with small gains after some sudden spikes in both directions, as traders tried to bet on tomorrow’s renewed guidance by the Fed.

In economic news, the US CB Consumer Confidence Index came in above expected at 138.2, a 17-year high, just shy of the all-time high set in 2000, right at the time of the peak of the Dot-Com bubble. On the other hand, the Case-Shiller Housing Price Index missed the already modest consensus estimate, with an only 5.9% yearly price increase, once again confirming the slowdown in the segment in the rising yield environment.

XHB (Homebuilder ETF), 4-Hour Chart Analysis

Shares in the sector are down by 20% on average compared to the January bull market high, and as Treasury yields in the US are still hitting multi-year or even decade-long highs across the yield curve, further pain could be ahead for bulls in the coming months.

That said, a dovish surprise tomorrow could set up a pullback in yields and a possible bounce in the sector, even as the general tightening trend will almost certainly persist for a while.

Rate Hike Near Certainty with All Eyes on the Fed’s Guidance

The odds of the third hike this year by the Fed are almost 100% for tomorrow, but even major changes, and sizeable surprises are possible, with regards to the economic guidance and the Central Bank’s preferred monetary as well.

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

The US-China trade war could serve as a dovish excuse, despite its limited effects so far, while the US economy provided plenty of ammunition to hawks, such as strong growth, an uptick in some of the key inflation measures, and a tight labor market.

While the 2-Year Treasury yield failed to close at a new cycle high, the short-end of the curve is at a decade-long high, so a bigger surprise could lead to a very volatile afternoon session tomorrow.

Copper Futures, 4-Hour Chart Analysis

Commodities also had a mostly quiet and mixed session with WTI Crude oil slightly retreating off its 10-week high near $73 per barrel and gold holding on near the $1205 level, but copper experiencing more volatility and closing with muted losses after Chinese markets reopened.

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

Ripple: One Thing That Doesn’t Make Sense

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If you are bored or just tired of reading about Washington politics, just come over to the crypto world.  But be warned, the headlines can be just as singularly focused and confusing as anything inside the beltway.  Like Ripple for example, it has had everybody talking for the last week. The coming week is likely to be no different. All eyes will be on XRP.

Ripple, of course, is the crypto force that offers its payment networks as settlement infrastructure technology to a growing number of major financial institutions such as UBS, Santander and UniCredit.

Using Ripple, banks can bypass the antiquated SWIFT system. This cuts transfer of international payments to a few seconds from something like three days.  That could save banks billions in fees.

Ripple’s XRP token has had it share of critics, some of which is reflected in XRP being one of the worst performing cryptos this year falling from $3.65 in March to $0.26 on September 13th.

Sudden About Face

Since then, everything has been uphill.  It started a few days ago when CNBC hosted Ripple’s Sagar Sarbhai.  The interview touted high speed xRapid as ready for commercial launch.  Sagar also presented a laundry list of 120 banks that were on board with its xCurrent software.

That interview lit a spark that resulted in a double in the price of XRP and grabbed the attention of just about everyone in the crypto community. Strong technical buy signals were flashing.  In addition announcing that two new banking clients (NCB of Saudi Arabia and PNC) had joined RippleNet, all other fingers were pointing to Sagar’s xRapid announcement.

Following all this comes the headline in Business Cloud website: RIPPLE CRYPTOCURRENCY TO HIT KEY $1 THRESHOLD, PREDICTS CEO Nigel Green, founder of deVere Group, the world’s largest independent financial advisory organization. If that weren’t bold enough, Green’s $1 prediction is for year-end.

Upcoming SWELL Conference Prompts Even More Speculation

There seems to be some real substance behind Sarbhai’s CNBC interview. On October 1-2, Ripple is hosting the SWELL event in San Francisco, CA. The event is meant to connect the world’s leading experts in policy, payments and technology for a proactive dialogue in global payments today.

The event will be packed with political literati including former President Clinton. It is easy to conclude that Ripple is geared up for a major news event. Speculation is that xRapid will be announced and given a date for launch.  When you consider that a keynote address from Bill Clinton could cost Ripple well over $100,000 why would they waste his star power on simple chit chat.

Looking Good

It is fair to say that recent news and the prospects for a potential bombshell announcement next put Ripple in as good a position as it has been in some time.  Who would ever sell XRP at this point? The Wall Street Journal reports that Jed McCaleb, one of the co-founders of both Ripple and Stellar, “has recently stepped up sales of billions of XRP tokens he is thought to own”.  Back in 2013 he owned 9 billion XRP tokens.

OK, so every once in awhile, every crypto entrepreneur needs to pay the rent, but this is more than chump change. To keep things in balance, McCaleb has not worked with Ripple for about five years and, under his lockup agreement, he is entitled to sell up to 750 million XRP annually once year five is passed.  That should be enough dough to pay just about anybody’s rent. Lately, however, the desire to get out of XRP has pushed beyond the lockup agreement.

Why Would Anyone Sell XRP?

With all the good news ahead and the long term outlook for Ripple never looking brighter, who wouldn’t want to own XRP?  This is even more curious given the depressed nature of the XRP price.

Everyone who owns an asset has the right to making independent decisions and there may be special things in McCaleb’s plan that factor into his urgency to sell.  However, there is a section in Investment Analysis 101 that says to ask lots of questions when founders and large inside owners are sellers.

One thing is obvious. After a thoroughly frustrating 2018, there are more reasons to own XRP than to be selling.

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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4.4 stars on average, based on 107 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Long-Term Cryptocurrency Analysis: Bearish Trend Intact Despite Explosive Rally Attempts

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The negative trend in the cryptocurrency segment continues to be dominant, with almost all of the top coins trading below the structural support levels that were broken during the summer months. Bitcoin is still above the $5850 level, the last base support before last winter’s explosive speculative event, but Ethereum, Ripple, Litecoin, and the other main altcoins all continued relentlessly lower.

Most of the majors formed a bottom in August, even though Ethereum continued to lead the way lower amid the bleak sentiment and capital flight. Several oversold rally attempts already failed in the segment, leaving the long-term declining trends intact, with last week Ripple providing hope for bulls with its explosive move higher.

While some of the coins tried to follow Ripple higher, the development of a healthy leadership failed yet again, add our trend model continues to be overwhelmingly bearish from a long-term perspective. With that in mind, the short-term buy signals should still be treated cautiously by traders. The August lows are not in direct danger right now, and a more durable bottom might already be in, but a broader rally would be needed to confirm a trend change.

BTC/USD, Daily Chart Analysis

While BTC has been holding on relatively well during the summer months, in the past weeks, as the largest coin was hurt by selling related to large wallets. The coin failed to show bullish momentum despite its stability, and a break below the key long-term support zone near $5850 is still possible here.

Primary support is at $6275, and in the case of a breakdown below $5850, the next major support zone is found near $5000, while resistance is ahead at $7000, between $7200 and $7300, and in the $7650-$7800.

ETH/USD, Daily Chart Analysis

After spiking below $180 and forming a panic-bottom, Ethereum rallied up to $260, but due to the extent of the preceding decline, it didn’t reach the declining trendlines which dominated the market for several months. The coin has been leading the selloff in the segment, and now a re-test of the lows is once again likely, even if a more durable bottom is already in.

Short-term support is found at $200 and $180, while below the recent low, further zones are found near $160 and $130, with resistance zones ahead between $275 and$280, near $300, and in the $330-$335 zone.

(more…)

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 354 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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