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Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin is still among the relatively weak majors and the coin violated the $125 level this week, with the declining short-term pattern being dominant. Despite the weakness, we expect the strong base pattern near $100 to hold up during the current move, with resistance ahead at $140, $150, and between $170 and $180.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash also remained relatively weak during the selloff form a technical perspective, and the short-term setup is still clearly bearish. The long-term momentum indicators are headed towards oversold territory but further short-term losses are likely, and traders and investors should wait with new positions here. Support is now found at $300 and near $260, while resistance is ahead at $360, $400, and $435.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple failed to show meaningful strength despite holding up above the $0.575 level, and it is still stuck in a declining short-term trend. That said, the coin is well above its spring low, and we expect the recovery to resume in the coming weeks. Resistance is ahead near the $0.64, at $0.73 and near $0.84, while support is found around $0.54 and $0.45.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic followed the broader market lower, and the coin remains under clear short-term pressure, even as the long-term momentum indicators are close to oversold territory. Traders and investors should stay away from entering new positions. Support zones are found near $14.50 and $13.50, while resistance is ahead at $16 and $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is very close to its April low, as it is already trading within the long-term base pattern between $150 and $175. The coin is still in a declining trend, but we still expect the coin to resume the recovery. Long-term investors could already accumulate the coin here with resistance ahead at $175 and $200, and further support found at $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is showing early signs of strength, holding up above the weekly lows and the support zone near $50, but the short-term trend remains negative. That said, investors could already accumulate the coin, but traders should stay away from new positions here until a trend change. Resistance zones are still ahead near $64, $70, and $80, with further support found near $45 and $40.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is trading around the key $1.5 level, showing some short-term strength, but the declinnig pattern is clearly intact. The violation of the key $1.70 level, is a bearish sign, but the coin remains positive from a long-term perspective, and investors could already accumulate the coin. Further resistance levels are ahead near $1.9, $2.2, and $2.35 while support is found at $1.5.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS is in the strongest technical position amonf the majors, still in a short term correction pattern after the strong run-up. As the overbought momentum readings are now cleared, investors could as already add to their holdings. Initial support is at $12, with further zones found at $10 and $9, while primary resistance is ahead near $15.50.

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-to-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 413 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

Forex Update: Euro and Pound Under Pressure Amid Brexit Chaos

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1318 -0.32%
GBP/USD 1.2515 -0.35%
USD/JPY 113.27 -0.04%
AUD/USD 0.7200 0.14%
GOLD 1,247 -0.23%
WTI Crude Oil 51.63 1.43%
BTC/USD 3,336 -2.10%

The forex market has been very active today with Europe being in the epicenter of the moves. The Euro and the Great British Pound are both trading with a bearish bias, despite an early rally. The initial move higher in the main risk-on currencies was triggered by the Chinese proposal of reducing car tariffs on vehicle’s made in the US, which gave back hope that the US-Chinese talks could be back on track despite the recent arrest of Huawei’s CFO. The brief bounce in Europe was also fueled by the better-than-expected German ZEW Sentiment data, even as the indicator still points to a slowdown.

While the risk rally faded in late European trading, the US Dollar got higher across the board following the better-than-expected Producer Price Index (PPI) report. Analysts expected a flat headline number due to the sharp decline in the price of oil while the more reliable core measure was expected rise modestly. The higher-than-expected producer inflation caused a rise in rate-hike odds and in turn, a bounce in the Dollar.

Technical Analysis

EUR/USD, 4-Hour Chart Analysis

The Euro, which is among the weakest majors from a technical standpoint due to the Brexit troubles the Italian budget debate and the slowing global economy, is back near the 1.13 level, still in a clear long-term downtrend.

The short-term trading range is intact in the pair, and for now, the prior low near 1.12 is not in danger, but despite the very favorable seasonality for the common currency, it failed to maintain its bounce above the key 1.1440 level, pointing to strong selling pressure and likely new lows in January.

GBP/USD, 4-Hour Chart Analysis

The Pound crashed below the 1.27 level following the delay of the key Brexit vote that was supposed to take place today, and the weakest major currency hit new 20-month lows against the US Dollar as we expected.

The pair is still well above its 2016 low near 1.20, but there are no major support zones that could stop the decline, should the political uncertainty persist. Both the short- and long-term trends remain bearish in GBP/USD, and only a quick recovery above 1.27 would help bulls here.

EUR/GBP, 4-Hour Chart Analysis

The EUR/GBP pair broke out above the 0.90 level and the long-standing trading range that has been dominant for almost a year, besides a failed break-out attempt in August. Given the Pound’s overall weakness a move towards the 2017 highs near 0.93 is possible in the coming months and a move above that could open up the way to the historic 0.95 level, and the 0.9750 level which was hit briefly during the panic in 2008.

Gold Futures, 4-Hour Chart Analysis

Gold pulled back below the $1250 level after hitting its highest level since July, and although the precious metal is close to confirming a new uptrend, a failed break-out formation is still in the cards. That said, the long-term outlook is still positive for the safe-haven asset, and should the pull back in US yields continue, gold could be in for a bull run even against the relatively strong US Dollar. The next major resistance zone is found near $1300 while support is at $1215 and $1080.

Key Economic Events Tomorrow

ChartBook

Forex

USD/JPY, 4-Hour Chart Analysis

AUD/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 413 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

Stellar Price Analysis: XLM/USD on the Road to Losing the $0.10 Mark; Coinbase Can’t Save XLM for Now

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  • XLM bears are pressing hard for a drop below the big $0.10 mark, as markets remains down across the board.
  • There could be room for another 8% price drop if support is broken, looking via the XLM/BTC chart view.

Stellar’s XLM is subject to giving up the big $0.10 level. Across the board there have been a several key psychological price breaks. Cryptocurrencies are being forced to give way, due to strength of the current bear market. When prices drop below these closely looked at levels, it only seems to spark further worry and panic. A fresh wave of selling pressure is then invited. Over the past five weeks, XLM/USD has fallen a chunky 63%, from the $0.29 territory, down to a recent low of $0.1010.

Consolidation Mode – Bears Rubbing Paws Together

XLM/USD daily chart

Over the past four sessions, there has been some stabilization following the deep push on 6th December, where XLM/USD fell to $0.1010. The price is moving within consolidation mode, something that is seen across the market. Technically, this only spells more danger – a calm before the storm potentially for cryptocurrencies. This type of behavior has been seen over and over again during this aggressively stubborn downward trend.

What if $0.10 is Breached?

As noted on numerous occasions, this move is uncharted territory already, falling from the heights seen at the start of the year. Market participants are already fueled with a serious amount of FUD, so such technical breaks will only cause more damage. This isn’t due to anything fundamental relating to the Stellar foundation, as their developments continue to remain very much sound and strong. One must gauge how further this can fall, via XLM/BTC chart view.

Technical Review – XLM/BTC

XLM/BTC daily chart

XLM/BTC continues to flirt with a critical area of support, and a failure to hold will be catastrophic. This zone held in the most recent fall on 7th December; despite the long lower wick below, the price still managed to close above. XLM/BTC has not been and closed below 0.000035 territory since September 19th. Should a breach occur, which if the current pace of momentum maintains its course could very well happen, another 8% drop may follow.

Lastly, it is worth keeping an eye out of the potential formation of a head and shoulder pattern. The left shoulder and head have been crafted via XLM/BTC daily chart. There is certainly a possibility that the bulls come back to life, forcing a bounce at the above-mentioned support. A right shoulder could then move towards heights back within the $0.00004000-4500 range. This is where the next major of supply can be observed.

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 79 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

Crypto Update: New Lows in Sight Again as Slide Continues

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The cryptocurrency segment continues to be under heavy selling pressure following the weekend rally attempt, and although all of the majors are still above last week’s lows, the strong short-term downtrend remains dominant. The long-term picture is overwhelmingly bearish as well, and there are coins showing meaningful relative strength, so sellers are clearly still clearly in control of the market, and the lack of leadership is still apparent.

With that in mind, traders and investors shouldn’t enter positions even in the slightly stronger coins, and odds still favor the continuation of the bear market, with new lows likely in the coming days. That said, a successful test or a failed breakdown could trigger a larger scale correction, with the broader picture still being deeply oversold and with investor sentiment still being very negative. For now, there is no sign of an imminent rally, with all eyes on the $3000 in Bitcoin.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been drifting lower ever since touching the $3600 level during the weekend, and the now the most valuable coin is close to its prior bear market low, pushing the total value of the market back below $110 billion. Today’s selloff took the coin below $3400, and a test of the next long-term support zone near $3000 is now likely in the coming days.

At least a move above $3600 would be needed for a meaningful improvement in the coin’s technical setup, but for now, sellers remain in control on both time-frames and our trend model is on clear sell signals both short- and long-term, with further strong resistance ahead in the $4000-$4050 zone.

ETH/USD, 4-Hour Chart Analysis

Ethereum is also close to last week’s bear market low and the coin is clearly stuck in a steep short-term downtrend with no sign of relative strength or bullish momentum since the failed weekend rally. The coin is also trading below the strong $95-$100 support/resistance zone, and with support just being found between $73 and $75, a new low is likely in the coming days.

Traders and investors should still stay away from entering new positions here, with further strong resistance zones ahead near $120 and $130.

Litecoin and Ripple on the Verge of Breaking Down

XRP/USDT, 4-Hour Chart Analysis

The major altcoins are all in week technical setups, and even Ripple, which is in a slightly better long-term position, is looking bearish from a short-term perspective. The second largest coin is trading below the $0.30 level, and a test of the next zone near $0.28 seems imminent.

The prior bear market low near $0.26 could also be in danger in the coming period, and traders and investors shouldn’t enter positions here, with resistance levels above $0.30 ahead at $0.32, $0.3550, and $0.3750.

Litecoin/USD, 4-Hour Chart Analysis

Litecoin is very close to breaking down below the $23 support zone today, and the coin is showing relative weakness compared to the other major, as it was the case ever since last week’s bearish shift. Our trend model remains on sell signals on both time-frames, and a new low seem very likely in the coming days, so traders shouldn’t enter new positions here despite the deeply oversold long-term momentum readings. The next major support zone is found between $20 mad $20.50 with strong resistance ahead near $26 and between $30 and $30.50.

Stellar/USDT, 4-Hour Chart Analysis

Since the key breakdown in Stellar, the coin remained relatively weak, and the strong selling pressure is still apparent in its market. The recent rally attempt failed to recapture even the $0.125 resistance, and now a dip below $0.11 and a test of the $0.10 level seems likely in the coming weeks. Further strong resistance is ahead just below $0.14 and traders and investors should still not enter new positions here.

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 413 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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