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Analysis

Long-Term Cryptocurrency Analysis: Correction Risk Rises as Coins Spike Lower

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It’s been a great ride for the crypto segment in the last one and a half months, as the summer correction soon transformed into a monster rally in most of the majors. Bitcoin, which emerged from the Fork-day stronger than ever, led the surge, but the rest of the market joined the party soon. As we already warned traders, the majority of the largest coins are now in overbought territory after the several 100% of gains, and today’s spike could be the beginning of a deeper market-wide correction. BTC hit a new all-time high near $5000 this week, but the momentum of the move wasn’t too convincing, and the currency is likely in the process of forming a durable top, on the heels of the lofty gains.

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BTC/USD, Daily Chart Analysis

The likes of Monero, Dash, and Litecoin are also after huge rallies, and much more favorable entry points are likely to emerge in the coming weeks. That said, Ripple, Ethereum Classic, NEM, and NEO are in different stages of the cycle and they could still deliver meaningful returns. In the case of the overbought currencies, long-term investors should take a step back and wait until the current skewed sentiment turns more negative and the coins clear the overbought condition. Let’s see how the daily charts look this weekend.

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Ethereum

ETH/USD, Daily Chart Analysis

Ethereum hit our target at $380 this week, but it topped out just below its prior all time high near $400 for now. The coin is getting overbought now after the recovery rally, and it might miss out on a new all-time high during this leg of the bull market. Strong support is now found at $330, $300, and $285.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin finally provided the break-out that we have been expecting and it even surpassed all of the long-term targets for the move. The coin is now deeply in overbought territory, and long-term investors shouldn’t open new positions here, although another push to new highs is possible in the coming days. Strong support is now found at $72, $64, and at $60 and near $56.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple continues to lag the other majors, with the coin drifting lower following the declining long-term trendline. The currency broke below the $0.16 level, proving the short-term weakness again.  While the long-term momentum is still neutral, the coin needs to hold above the $0.13 support, to maintain the long term uptrend. That said, investors could still add to their positions here, as another leg higher is more likely.

Dash

DASH/USD, Daily Chart Analysis

Dash most likely topped out just above the $400 level after the huge move from the July bottom near $120.  The coin is clearly among the most overbought majors, and we expect a correction below $300 in the coming period, although the long-term uptrend is not in any danger. Key support levels are found at near $300, and at $265.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic quickly surged to its prior all-time high after yesterday’s break-out and reached the $18, $20, and $23 targets in one move. The coin is still not overbought regarding the long-term picture and it could still be headed higher in the coming week, but volatility will likely be high, especially if the segment enters a broad correction.

Monero

XMR/USD, Daily Chart Analysis

Monero behaved very similarly to Dash recently, and the outlook is also the same for the coming period. We expect a deep correction after the monster rally, with the price dipping at least below the $100 level. The steep short-term uptrend is now broken and even short-term traders should be cautious with new positions. Crucial support levels are at $100, $80, and $68.

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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5 Comments

5 Comments

  1. Chris G

    September 2, 2017 at 10:39 pm

    Thanks mate – your guidance has been priceless, looking for long term entry points in the future …

    • Mate Cser

      September 3, 2017 at 5:55 am

      Thanks Chris, now it’s time for patience 🙂

      • Chris G

        September 4, 2017 at 5:55 pm

        Indeed! This ICO ban in china took a chunk out of eth today …

  2. Inverstor Clouseau

    September 3, 2017 at 5:22 am

    I hope a meaningful correction is underway for the sake of entry points. The huge gains have frankly been stressful

    • Chris G

      September 3, 2017 at 4:44 pm

      I’ve felt the same way lol – when the gains are so high, finding the right exit point is stress!

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Analysis

Crypto Update: Chinese Crackdown Triggers Next Leg of Correction

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The cryptocurrency segment is crashing again, with double-digit losses across the board, and with several coins shedding around 30% in one day amid the widespread and heavy selling. The sell-off was triggered by reports on a new set of measures by the Chinese authorities limiting crypto trading, which added to the still looming South Korea related regulation worries. Bitcoin tested the mini-crash lows at $11,300 today in early trading, dipping slightly below that level before a strong bounce started.

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The most valuable coin is now between two crucial support/resistance lines, with the other ahead at $13,000, and as the downtrend is entering its more mature phase the $10,000 and $9,200 levels could come in play, with a possible dip to the support zone near $7,650.

BTC/USD, Daily Chart Analysis

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Interestingly, the coin is still hovering within the daily range of the crash of December 22nd, and that points to a very active and volatile period ahead near the low at $11,300, as automatic orders will likely get triggered on both sides of the market.

The short-term setup is bearish, and although it’s possible that the primary support level will hold, odds still favor another leg lower, following the exponential run-up at the end of last year that pushed sentiment into bullish extremes.

BTC/USD, 4-Hour Chart Analysis

Altcoins

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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

Music: One Overlooked Use Case

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So far in this year, Ethereum has been the crypto star appreciating over 80% to a recent record of $1402. All this suggests that more and more applications are being created. We know this by the demand for Ether, the gas that drives the Ethereum network.

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The reason behind the explosion of Ether demand was confirmed by Ethereum co founder Steven Nerayoff in a CNBC interview where he claimed the number of Ethereum projects today is more than 10 times year ago levels.

One of those areas is the music business and there are several names appearing on the ICO list to add to your research agenda.

Why The Music Business Needs Help

Music may live forever but the business side has been in trouble for a long while. Over the last decade there have been only three years when the global value of music sales increased. The combination of digital music and outright pirating through peer-to-peer sharing has much to do with the long-term trend.

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Throughout the world there are 69 copyright and royalty societies given the responsibility of documenting, collecting and distributing music royalties. That means collecting a few pennies whenever a song is played on the radio, Internet or anywhere else. Four of the largest of these is in the US, followed by Japan, Germany and Britain. Their operations are truly byzantine.

Experts in the music-publishing field confirm the time between music usage and royalty payment can run close to 24 months. Even then not all royalties are distributed. According to my sources, there are often millions of dollars collected by royalty authorities everywhere that never make it to the entitled recipients. That sort of practice borders on criminal behavior but copyright and royalty societies operate in a sub-rosa manner making it difficult to understand their policies.

In the past just 4 major record labels controlled over 80% of the industry. These giants could afford a full time legal department to pursue royalty issues dominated the music industry. Today, however, independent labels represent almost one-third of the market. This means less democracy in the business with the young independent artist at a particular disadvantage.

Of course, musicians aren’t the only group of artists loosing out on their pay. There are writers, poets and painters that go largely unprotected.

The music business is just easier to track because it has more data. Yet in spite of all the information, the music industry is widely recognized for its lack of transparency. Blockchain technology has the ability to disrupt long-standing industry practices.

ICOs To The Rescue

The number of Ethereum based white knights is starting to appear on the horizon promising to rattle the industry and hopefully restore some democracy on behalf of the independent artist.

One simple business model comes from a startup SingularDTV who is attempting to build their ecosystem on top of Ethereum. Here is the basic value added proposal.

SingularDTV tokenizes the artist work. In doing so the artist is turning their music into a financial asset. Anyone who buys into an artist’s token owns a share of the creation and its income stream. The more people consume an artist creation, the higher goes the token price.

Only time will show if SingularDTV succeeds with this model. The consequence of this model is how it eliminates many of the middlemen and nefarious influences in the industry. Instead of singing on a street corner for bread, an artist could raise money upfront without relying on an advance from a record label.

According to SingularDTV, distributing content via blockchain would allow artists to skirt streaming platforms like Spotify to earn royalties on their own terms. Now that is true democracy.

SingularDTV may stand out a bit in the news due its recent ICO success in raising $8 million but they aren’t the only player in the music game. Names like Voise recently raised $1 million as well as Soundchain, Blokur and Opus to name a few.

I am no longer a registered investment advisor, which means I don’t go around making investment recommendations. So I will only suggest this group to put on your list of late night reading. Next time, I will take a closer look at more of these names.

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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Analysis

Technical Analysis: Cryptocurrencies Start Week on a Quiet Note as NEO Shines

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The broad Bitcoin-led correction continued to dominate trading in the crypto-segment throughout the weekend, as the most valuable coin drifted sideways above the key technical level at $13,000, with dwindling trading volumes.

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BTC remains in a declining short-term pattern, although the digital currency still holds well above the mini-crash lows from December, spending almost a month now in the daily range of the year-end plunge. We still expect the largest coin to complete the current cycle with a move below the crash lows and the $10,000 level after the stellar rally of the previous months. Key support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700

BTC/USD, 4-Hour Chart Analysis

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Altcoins also settled down across the boards with only a few coins registering strong activity. Ethereum and NEO have been among the coins making headlines, as the second largest coin continued to grind, higher still trading near its recent all-time high today. The price of the ETH token is moving in a short-term uptrend, in the face of the stretched momentum indicators, but we expect a meaningful correction soon, and long-term investors should wait for a more favorable technical setup before entering new positions, with key support levels at $1000, $850, $740, $625, and near $575.

ETH/USD, 4-Hour Chart Analysis

Ripple remained under heavy selling pressure in the meanwhile, as the oversold bounce of the weekend faded away and the coin got close last week’s lows again. As the short-term downtrend is intact, traders should stay away from entering new positions, while investors should wait for short-term sell-offs towards the main support levels at $1.50, $1.25, and $0.85 to add to their holdings.

XRP/USDT, 4-Hour Chart Analysis

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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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