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Analysis

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.

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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

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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)”

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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

Daily Analysis: Stock Rally Fades as Walmart Weighs on Sentiment

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2715 -0.73%
DAX 12,487 0.81%
WTI Crude Oil 61.56 0.02%
GOLD 1331.00 -1.84%
Bitcoin 11720 6.24%
EUR/USD 1.2336 0.61%

It’s been another very hectic session in US equities, with the main indices diverging substantially, as it has been the case ever since the market made it back to the key break-down levels of the crash two weeks ago. The rally through those key levels was not an easy feat, as we expected, and although the Nasdaq cleared the hurdle last week, and even added a bit to its gains today in early trading, the S&P 500 and the Dow failed to follow the tech benchmark.

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S&P 500, 4-Hour Chart Analysis

The Dow has been pushed lower by Wal-Mart (WMT) throughout the day, as the retail giant (now officially named Walmart) disappointed with its earnings report, with especially the crucial on-line segment missing the growth estimates, putting WMT’s quest against Amazon into doubt. Jeff Bezos’s crown jewel popped higher after the release and that helped to widen the gap between the Dow and the Nasdaq.

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WMT, 4-Hour Chart Analysis

A monster-sized Treasury issuance was the other main event of the day, as bond markets are still nervous because of the rapid rise in yields, but the market absorbed the bonds without any major issues and yields finished the day little changed.

We maintain our bearish short-term view on stocks, despite the strength in the Nasdaq, and a test of the correction lows still seems likely in the coming weeks, but as the long-term uptrend is still intact short positions should still be treated as counter-trend trades, with strict risk management.

Forex Markets and Commodities

EUR/USD, 4-Hour Chart Analysis

The Dollar, which rallied strongly in early trading, remained stable compared to its main peers amid the Treasury issuance and the stock sell-off, with even the safe-haven Yen failing to rally against the Greenback. The reserve currency gained significant ground against commodity-related Aussie and Loonie too, and we expect that trend to continue, should the re-test in the stock indices materialize.

Oil had a mixed session, with an early rally and a late sell-off, similarly to stocks, as the further escalation of the Syrian conflict remains a gloomy option for the Middle East, while the broader market trends and the US supply surge are pushing the price of crude lower.

Gold also pulled back yet again of its rally highs, continuing its correction, as the Dollar strength hurt precious metals despite the late-day risk-off shift.

Cryptocurrencies

The segment had a mixed day, with Bitcoin gaining and most altcoins losing ground, in the wake of the bullish news flow surrounding the largest coin. The slight increase in volatility in US stocks “spilled over” to the crypto market in late trading, with most coins finishing the US session on a negative note.

While the losses were relatively small in most valuable digital currencies like Ethereum, Ripple, NEO, Bitcoin Cash, and Cardano, the real outlier was Litecoin, which pushed above $250 after breaking-out from its short-term correction, while also weathering the late-session sell-off.

Stellar/USDT, 4-Hour Chart Analysis

Stellar and IOTA were the weakest majors, losing more than 5% on the day. Stellar now gave back most of its post-crash relative strength, as it remains stuck in a broad declining trend, although it is still well above the crash lows, and a break-out remains likely in the coming week, similarly to the other slightly lagging coins.

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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

Technical Analysis: Bitcoin Still Pushing Higher as Altcoins Mixed

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The day that kicked off in a bullish fashion for cryptocurrencies turned slightly negative for the majority of the coins in the second half of the session, as US stock markets re-opened after the long weekend. Bitcoin, Ethereum Classic, and Litecoin were the early leaders of the segment, but only the most valuable coin stayed bullish throughout the session, as both LTC and ETC ran into resistance in the second half of the day.

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BTC, which was boosted by the positive news regarding the Bitcoin Core Wallet’s SegWit introduction, topped $11,700 for the first time in more than a month, and the coin is getting close to the $200 billion mark in market value yet again.

BTC/USD, 4-Hour Chart Analysis

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As the currency hasn’t completed the previous short-term correction, with the MACD indicator still showing overbought readings, another pullback in the coming days wouldn’t be a surprise, but the short-term uptrend is clearly intact.

The $13,000 and $14,250 levels are ahead as the next major targets, with a weaker level near $12,000, while support is now at $11,300, $10,000 and between $9000 and $9200.

ETH/USD, 4-Hour Chart Analysis

As we mentioned, Litecoin and Ethereum Classic both pulled back in late trading, while the largest altcoins, Ripple and Ethereum failed to rally in the first place, as the majors are diverging considerably. XRP and ETH drifted sideways throughout the session, while turning slightly lower later on and Ethereum is still struggling with the strong resistance ahead.

The declining trendline is just above the current price level, and the short-term relative weakness reinforced our view that further correction is likely before a clear break-out, with key support levels found at $845, $740, $625, and $575, and resistance above the trendline at $1000 and $1175.

(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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Analysis

Pre-Market: US Stocks Return on a Bearish Note after Long Weekend as Dollar Rallies

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After the hectic session on Friday, US equities took a long break thanks to the Presidents’ Day yesterday, but the technical setup that we have been monitoring remained intact. The major indices formed a short-term top exactly in the Line-In-The-Sand area that seemed likely to stop the post-crash rally at least temporarily.

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S&P 500, 4-Hour Chart Analysis

The key levels to watch during today’s session will likely be 2735 and 2700 in the S&P 500 (25350 and 24800 in the Dow), but below 2735 the benefit of the doubt is on the bears’ side.

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So short-term, we continue to lean on the bearish side here, at least short-term and we expect the market to head for a test of the correction lows in the coming period. European and Asian markets continue to underperform their US peers, despite the strength in the Dollar, and that doesn’t bode well for bulls, as Europe has been spearheading the decline so far.

Dollar Still in the Center of Attention

EUR/USD, 4-Hour Chart Analysis

Europe bounced higher today following the release of the better than expected (but worse than the latest) German ZEW Economic Report but that didn’t stop the drift lower in the common currency. The EUR/USD pair fell back below 1.2350 after the fake-out on Friday that indeed proved to be a bull trap as we speculated, and a test of the rising trendline is now possible in the coming days.

USD/JPY, 4-Hour Chart Analysis

On a positive note, the main safe-haven assets, the Japanese Yen and Gold, are also losing ground to the Greenback today, and that could point to a less significant shift in the risk appetite of investors.

That said, commodity currencies are still under pressure, and they have been a good proxy so far for judging the risk-on/risk-off divide, and with oil and copper turning lower this morning, another round of selling could be underway.

WTI Crude Oil, 4-Hour Chart Analysis

Looking at the bond markets, rates are edging higher across the yield curve and the Volatility Index (VIX) is also on the rise again, and all looks set for another active day in US markets, with plenty of trading opportunities in equities and currencies alike.

We expect Wednesday to be the most interesting day of the week, as the arguably most important release, the FOMC meeting minutes will come out in late trading. Until then, the volatile, technicals-led trading could continue.

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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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