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Long-Term Cryptocurrency Analysis: Correction Continues as Ripple Goes Berserk

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It has been a hectic and emotional holiday week for the crypto segment, and it is far from being over as the major coins are in the midst of a volatile weekend before the New Year. Ripple continued to make headlines as the strongest coin by far, rocketing past Ethereum for the second place of the capitalization list, even as ETH remained relatively strong amid the broad correction.

Bitcoin almost traded within last Friday’s daily range all week long, except a brief period over the $16,000 level, but the selling pressure never really abated. The coin is now back near the lower end of the range, after falling below the key $13,000 support again. We expect the correction to continue with a likely dip below the $10,000 level, although the extreme momentum levels are now cleared. Primary support is at $11,300, with further levels found at $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, Daily Chart Analysis

Ripple’s uptrend continued in earnest throughout the week, and it not only broke out above the $1.25, hitting the range projection target and triggering a sell signal yesterday, but took out all stops and spiked way above the $2 level today in early trading before entering a pull-back. Now even short-term traders should stay away from new positions, given the extreme overbought momentum readings, as a deep correction is likely already underway. Key support levels below $1.50 are found at $1.25, $1, $0.85, and $0.68.

XRP/USDT, Daily Chart Analysis

Let’s see the outlook for the other major altcoins before the New Year.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum is holding up well amid the broad sell-off, although the long-term momentum indicators still suggest more correction. That said, given the lengthy consolidation period before the recent break-out, the coin should remain strong during the bearish cycle. Key support levels are still found at $625 and $575, while the all-time high is ahead at $850 as resistance.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin continued its correction as expected, and it is now trading just above the $200 level after today’s sell-off, with still being relatively weak compared to the other majors. We expect the currency to test last Friday’s lows soon, and a dip to new lows is also likely during this cycle. Key support levels are found at $125 and $100, with a weaker zone around $170, and primary resistance ahead between $250 and $260.

Dash

DASH/USD, Daily Chart Analysis

Dash traded near its mini-crash low today and the coin is now also relatively weak following the stellar rally of the previous months. The coin looks ready to continue the correction after the post-crash bounce, and the $815-$865 support zone is unlikely to hold, with further important levels found just above $600, at $500, $470, and near $410.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic already dipped below the Friday low, being one of the weakest majors during the correction, and we expect another leg lower below the prior all-time high at $23. The extreme overbought readings are getting cleared, but investors should still wait with adding new positions until a more favorable risk-reward opportunity. Strong support under $23 is found at $18, while primary resistance is ahead at $30.

Monero

XMR/USD, Daily Chart Analysis

Monero broke the dominant rising trend today, and with the MACD still showing extreme readings, a deep correction is likely underway in the coin. While the $300 support held up during the sell-off, we expect a move below that, with further key levels found at $240, $200, $180, and $150.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA remained under strong selling pressure amid the broad bounce, and the coin tested the $3 level yet again today, still being among the weaker majors. The long-term MACD is still in a bearish setup, and although the coin is ahead of the other majors in the cycle, further corrective price action is likely. Support levels are still found at $3, $2.35, and $1.50.

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

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 414 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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3 Comments

3 Comments

  1. MinerMatt17

    December 31, 2017 at 7:41 pm

    You guys have made trade recommendations for Iota, Monero, and Bitcoin to a lesser extent that don’t jive with this post.

    I think it might be beneficial if you guys made your recommendations in concert with these analysis, as it gets very confusing and sends mixed messages.

  2. Namkyue Kang

    January 2, 2018 at 7:31 am

    When dip?

  3. Chris G

    January 2, 2018 at 5:59 pm

    would be interested in your analysis of cardano as well

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Altcoins

Binance Coin Price Analysis: BNB Still in Trouble Despite Recent Strong Fundamental Prospects

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  • BNB/USDT moving within an ascending channel formation, subject to a breakout to the downside.
  • There is much anticipation ahead of Binance’s DEX launch, expected in early 2019.

Binance Coin (BNB) has made a decent recovery since being slammed in November and into the early part of December. The price had initially dropped a whopping 58%, before then being able to stabilize most recently on 7th December. Since, BNB has jumped as much as 20% to the upside, moving within an ascending channel formation. However, despite the gains of late, a similar bounce was initially seen on 25th November to 5th December, before another dump. BNB/USDT had tanked a chunky 35%, after this brief period of stabilization.

Strong Fundamental News Flow

The world’s largest exchange by traded volume will some be launching their own decentralized exchange (DEX), expected for early 2019. There is much excitement and buzz across the social media space for this to go live. The development team have already noted that their BNB will be moving from its ERC-20 token status, which is currently on the Ethereum blockchain. As a result, this will be transferred to their own proprietary blockchain, which is set to be called Binance Chain.

In terms of a decentralized exchange, this technology can facilitate a new type of pair matching, allowing users to be able to place orders in addition to trading cryptocurrencies. This can be done without the need of an intermediary institution, managing the ledger or even controlling the user’s funds.

Elsewhere, Binance recently announced that they will be adding a new feature for the benefit and to attract more institutional investors. They will have the facility to create sub-accounts on the Binance exchange. Finally, the company have also exercised further use of their token, BNB, as these can now be used via Tripio to secure bookings.

Technical Review – BNB

BNB/USDT 4-hour chart

Price action over the past six sessions now is moving within an ascending channel formation. This comes after the decent bounce from the low on 7th December, having dropped to a low of $4.1200. At the time BNB/USDT was very much oversold, dropping to 26 via the RSI on the 4-hour time frame. Technically, such moves are subject to a potential breakout to the downside.

Support Levels

BNB/USDT weekly chart

Near-term support should be noted at $4.8000, which is the lower part of the observed ascending channel. Further south, eyes would be on the 7th December low at $4.1200. BNB/USDT is already trading around the lower levels seen since December 2017. Lastly, should the above-mentioned be breached, then a fall to $3.2500 could be on the cards. This is a weekly support seen for 17th December 2017 week commencing.

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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4.5 stars on average, based on 84 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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Altcoins

Cardano Price Analysis: ADA Moving Within A Deadly Range Block

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  • ADA remains vulnerable to further downside pressure, and there is potential for another 50% drop.
  • IOHK launch two new Cardano tools, ‘Plutus’ and Marlowe for smart contract writing.

Cardano’s ADA price has been very much depressed for the past five weeks now, dropping well over 60% within this period. As a result, ADA/BTC it has been forced to trade around the lowest levels seen since December 2017. It still has yet to show any promising signs of it escaping this stubborn downside trend.

Over the past five sessions, the price has managed to stabilize, producing a near-term bottom within the $0.02800 region. Important to note, with the above-detailed, ADA/USDT price action is moving within a narrowing range-block. This is subject to a potential breakout, causing a deeper drop, as part of this bearish market.

IOHK Launch Two New Cardano Tools

Earlier this week, IOHK, the engineering company that builds cryptocurrencies and blockchains, announced two new tools. These will be for the writing of smart contracts on the Cardano network. The tools named Plutus and Marlowe have now been launched in test format. They have been introduced to provide great value of assistance for start-ups, financial services and fintech industries, and academia. In all cases, the tools allow for preparation of blockchain contracts which will run on Cardano.

Plutus

Plutus will be providing general purpose programming language and tools for Cardano. The scientists and engineers at IOHK were able to combine the discipline of the Haskell functional language with Cardano. As a result, the creation of a platform for fintech developers to write secure and robust smart contracts is being developed.

Marlowe

Marlowe is a streamlined way for non-programmers to generate code and create software products. It has been noted at an easy-to-use tool. Even professionals operating within the finance industry who do not have any programming experience can build these automated financial contracts on the blockchain.

There was full coverage on this and an exclusive interview with IOHK and Cardano’s Charles Hoskinson, on this. See more.

Technical Review – ADA

ADA/USDT 4-hour chart

Looking via the 4-hour char view for ADA/USDT, vulnerabilities remain to the downside. As touched upon earlier, following the steep falls through November into December, price action has found some firmer footing. However, with this consolidation state, a range-block has been formed, which is subject to exposure by the bears.

ADA/BTC weekly chart

The near-term support as part of this current range should be noted at $0.02800. If this fails to hold, there could be some chunky downside to come. Judging from ADA/BTC, there could be room for another 50% move south. Further south eyes would be on the next major area of comfort, seen at the 0.00000550 region.

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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4.5 stars on average, based on 84 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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Analysis

Forex Update: Dollar Drops, Risk-On Currencies Rally on Trade Optimism

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1366 0.43%
GBP/USD 1.2634 1.19%
USD/JPY 113.25 -0.10%
AUD/USD 0.7223 0.26%
GOLD 1,249 0.09%
WTI Crude Oil 52.16 0.37%
BTC/USD 3,444 2.74%

The forex market saw another very active session, with the key topics of the recent weeks still making headlines and causing wild swings in the major currency pairs. The Brexit saga took another turn today, as Prime Minister Theresa May faced a no-confidence vote in her party following the delay of the vote on the draft plan in the British Parliament.

The result of the vote is not yet known, but analysts expect the PM to win the vote after she stated that she won’t run for another term in light of the Brexit-related chaos. The Pound has been rallying so far today together with most of the risk-on currencies, with yesterday’s decision to grant bail to the recently arrested CFO of Huawei boosting investor confidence across the globe. President Trump also hinted on progress on the ongoing talks, and that led to a sizable drop in the USD and in US Treasuries, as safe-haven flows reversed.

Technical Analysis

USD/CNH, 4-Hour Chart Analysis

The Dollar/Yuan pair, which has been crucial for all markets in recent months, broke its short-term uptrend on the news, and it fell to its lowest level in almost a week. The Chinese currency is still weaker compared to its post-trade-truce levels, but it’s also clearly above its October lows, despite the continued weakness in the Chinese economy thanks to the trade-related optimism.

That said, the long-term trend is clearly positive in the pair, and negative in the Yuan, and the credit-related troubles, which will likely weigh on the currency for years, will likely outweigh the topic of trade next year. We still expect the likely trade deal to cause a strong bounce in Chinese assets, but it’s unlikely to change the broader trends especially given the broad bearish shift in global risk assets.

EUR/GBP, 4-Hour Chart Analysis

The EUR/GBP pair is testing the recent break-out level amid the continued Brexit uncertainty, with the 0.90 level being in focus throughout the day. The short-term uptrend remains clearly intact in the pair, and bulls remain in control of the market from a long-term perspective as well.

Strong support is found near 0.8920 and a move towards the 2017 highs near 0.93 is possible in the coming months, even as both currencies remain among the weaker majors, and European growth is clearly weakening.

AUD/USD, 4-Hour Chart Analysis

The AUD/USD pair is currently trading in a bearish wedge pattern amid the mixed price action in commodities, and the Aussie has been acting weak today, suggesting a likely move below the 0.7200 level in the coming days.

The currency is neutral on both time-frames currently, but a move below 0.7165 would mean that the long-term downtrend will resume following the two-month-long correction, that broke the long-standing declining trendline.

Gold Futures, 4-Hour Chart Analysis

Gold has been showing relative strength today compared to the other main safe-haven assets, which pulled back thanks to the positive developments in the US-Chinese diplomatic spat, and the precious metal successfully tested the recent break-out level.

Gold is very close to confirming a broader trend change, although it needs to stay above $1235, and a move above $1260 would suggest a test of the next major resistance zone near $1300, with strong support, found at $1215 and $1080.

Key Economic Events Tomorrow

 

ChartBook

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/JPY, 4-Hour Chart Analysis

AUD/JPY, 4-Hour Chart Analysis

GBP/JPY, 4-Hour Chart Analysis

USD/CHF, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

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 414 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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