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Analysis

Long-Term Cryptocurrency Analysis: Crucial Rally Attempt

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The crypto segment is at a very important point from a technical perspective following the strong late-April rally and the subsequent correction. The major coins formed a bottom last week after triggering long-term buy signals and now a very important rally attempt is underway.

Several weaker coins drifted back to their April lows, with Bitcoin also getting relatively close to the base that developed this year. The leaders of the April rally shined once again, with IOTA, EOS, and to a lesser extent Ethereum showing relative strength during the rally.

Despite the positive signs, and the short-term buy signals that popped up during the weekend, the momentum of the move stalled today, and the advance is already facing a key test. For now, the rally is intact, and the coins remain dominantly on buy signals in our trend model, but especially the leaders should be monitored closely in the coming days.

BTC/USD, Daily Chart Analysis

We expect the recovery to continue, even as Bitcoin is once again lagging the leading altcoins, as it was the case during the April rally. BTC is stuck below the $7650-$7800 level, and although the long-term setup is bullish, the coin failed to trigger a short-term buy signal, while the daily MACD indicator is also pointing to weak bullish momentum.

That said, long-term investors could add to their holdings here, as the secular bullish trend is still clearly intact. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, while support is found at $7350, $7000, $6500, and $6150.

ETH/USD, Daily Chart Analysis

Ethereum recovered well after a period of relative weakness, and the coin formed a bottom near $500, keeping the recovery intact, and staying well above the April low. The currency ran into resistance in the $625-$645 range, but we expect the rally to continue, and ETH is on a buy signal on all time-frames. Primary support is found between $555 and $575, while further resistance zones are ahead between $735 and $780 and near $845.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin failed to move above the $125 level so far, and the coin remains among the weaker majors even after drifting out of the declining short-term pattern. Investors could add to their holdings on the short-term pullbacks, and we still expect the coin to hold the strong base pattern near $100, while further resistance zones are ahead near $140, $150, and between $170 and $180.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash has also been among the weakest majors in recent weeks, and the rally attempt is also not convincing so far. The coin failed to trigger a short-term signal, and traders should remain cautious with new positions until Dash shows signs of strength. The secular uptrend remains intact despite the weakness, and long-term investors could still add to their holdings here. Support is found at $300 and near $260, while resistance is ahead at $360, $400, and $435.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple has been showing relative strength recently and the coin is now on a short-term buy signal after while being bullish from a long-term perspective as well. XRP is now above the $0.64 support/resistance level, although it faces further strong resistance near $0.73 and $0.84. We expect the recovery to continue with a strong base pattern found between $0.45 and $0.54.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

While Ethereum Classic is now on a buy signal both short- and long-term, it failed to gather strong momentum and the $16 resistance level stopped the advance for now. While the long-term indicators signal a durable bottom, the short-term weakness could point to another test of the lows, and traders should focus on the relatively stronger coins. Support zones are still found near $14.50 and $13.50, while further resistance is ahead at $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is also among the weaker coins and it failed to trigger a short-term buy signal, even as the long-term picture turned positive. We still expect the coin to hold the long-term base pattern between $150 and $175, but traders should still stay away from new positions here. Long-term investors still accumulate the coin with further resistance ahead at $200, and strong support below $150 found at $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO built up some short-term relative strength last week, but the momentum of the rally is still weak, and the coin is facing strong trendline resistance near the current price level. NEO is on both short- and long-term buy signals, but the coming days will be crucial for the coin. Further resistance zones are ahead near $64, $70, and $80, with support found near the $50 level.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA rallied strongly off the correction lows as we expected, and it hit the $1.9 level before entering a short-term pullback. The coin is now back near the $1.7 level, and we expect the rally to continue while the long-term picture is also bullish. Further resistance levels are ahead near $2.2, $2.35, and $2.6, while key support is found at $1.5.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS ran into resistance near the key $15.50 level after breaking out of a short-term correction pattern, and the coin remains one of the clear leaders of the market despite the current pullback. The short- and long-term buy signals remain intact, with support found at $12, $10, and $9, while targets above 415.50 are ahead at $19 and $23.

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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4.6 stars on average, based on 278 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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  1. Pgaucher

    June 5, 2018 at 1:08 am

    Could we add Bitcoin Cash to the list of long term trend analysis. Huge development efforts are being made and clear use cases pop up every day making it a potential contender to the top spot. Would be great to get technical views on BCH as well as BTC. Thanks.

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Altcoins

Treading the Floods: Cryptocurrency Prices Stable Following Bithumb Attack 

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Cryptocurrencies emerged unscathed Wednesday following yet another security breach of a South Korean exchange, as the market continued to favor a corrective rally for bitcoin and the major altcoins.

Crypto Prices Hold Steady

Bitcoin fell by as much as $200 Wednesday on news of a cyber attack targeting South Korea’s Bithumb exchange. However, the coin quickly recovered and now sits just shy of $6,800, according to data provider CoinMarketCap. Prices peaked at $6,821.56 at 12:34 UTC.

Compared with 24 hours ago, bitcoin’s per-coin value was virtually unchanged.

The ten biggest altcoins by market cap exhibited the same pattern, with prices treading water compared with Tuesday afternoon. The total cryptocurrency market was valued above $290 billion, up from an earlier low of around $282 billion.

Bitcoin and the major altcoins have more or less retained their bullish bias, which suggests that a continuation of the upward trend is likely. Since bottoming last week, coins have rebounded $26 billion.

Bithumb Attack: What We Know

Hackers made off with roughly $31 million in stolen cryptocurrency on Wednesday as Bithumb suffered its third cyber breach in 12 months. The attackers reportedly targeted users’ holdings of XRP, the third-largest cryptocurrency by market cap, by running a series of unauthorized access attempts.

Bithumb was unable to prevent the attack despite spending upwards of 10 billion won ($9 million) on security enhancements. This includes complying with new guidelines for financial institutions requiring 5% of company staff be made up of IT specialists. Bithumb has reportedly exceeded that quota by a wide margin.

The Seoul-based exchange confirmed that it had migrated outstanding crypto balances to cold storage and said it will fully refund affected users. Transactions on the exchange remain suspended for now.

Although news of the attack hit the airwaves on Wednesday, some analysts believe the theft occurred several days earlier as part of Bithumb’s data upgrade. However, the exact cause of the breach remains unclear.

Goldman Sachs Weighs Crypto Trading as an Option

U.S. multinational investment bank Goldman Sachs is considering taking a bigger dive into cryptocurrency by launching a full-scale trading operation, according to COO David Solomon.

“We are clearing some futures around bitcoin, talking about doing some other activities there, but it’s going very cautiously,” Solomon said during an interview in China, as reported by CCN. “We’re listening to our clients and trying to help our clients as they’re exploring those things too.”

Currently, the Wall Street investment giant is clearing bitcoin futures contracts. It has also announced plans to introduce a new bitcoin trading operation, which includes using its own money to trade with clients in a variety of contracts linked to bitcoin.

Institutional traders are awaiting the arrival of custodial services dedicated to cryptocurrency before taking the full plunge into digital assets. To that effect, the San Francisco-based  Coinbase exchange is leading the charge by announcing a new line of crypto custodial services to unlock up to $10 billion in institutional capital.

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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4.6 stars on average, based on 461 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Crypto Update: Bitcoin Stalls at $6750 as Rally Attempts Fade

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The top coins are trading slightly lower today in early trading, as the rally of the last two days ran into strong resistance. The majors are all holding up above last week’s lows but the short-term downtrend that could have significant long-term implications is clearly intact. The overnight dip was partly fueled by news on yet another possible exchange hack, this time Bithumb, but the losses are limited so far.

Correlations are still elevated between the majors even as relatively narrow trading ranges dominate the market. Trading activity remains low, as the segment continues to consolidate last week’s wild swings, and summer trading conditions are also starting to set in. The total value of the market is hovering around $280 billion, as the rebound failed to hold the capitalization above the $300 billion mark.

BTC/USD, 4-Hour Chart Analysis

Bitcoin failed to regain the $6750 resistance despite several rally attempts, as it continues to trade dangerously close to last week’s lows and the crucial long-term resistance between $5850 and $6000.  The short-term trading range around the $6350 level is intact, and the coin remains on a sell signal on the 4-hour time-frame. Further resistance is ahead near $7000 and $7350, while primary support is currently found at $6500.

Ethereum Still Strong but Short-Term Picture Shaky for Altcoins

ETH/USD, 4-Hour Chart Analysis

While the long-term outperformance of Ethereum is still impressive, the other previously leading coins are not ahead of the broader market, and without a clear leadership, a sustained rally is not realistic. The current setup favors at least a re-test of the lows, and possibly another leg higher with regards to the majority of the top altcoins.

Ethereum is trading above the $500 level despite the early selloff today, and the coin is just below the declining trendline, although with several strong resistance levels above the current price, the coin will likely follow the broader market lower in the coming days. Primary resistance is still ahead between $555 and $575, while further support below $500 is found at $450, $400, and $380.

XRP/USDT, 4-Hour Chart Analysis

Ripple remains below the $0.54 level, EOS is just above the $10 support, and the most bullish Binance Coin is also drifting lower today, with IOTA’s short-term relative weakness being apparent. Among the long-term laggards, Litecoin, Dash, and Monero are all under pressure, and should they breach last week’s lows, selling could intensify again.

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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4.6 stars on average, based on 278 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

Technical Update: Gold Continues Sliding, Falls Below Key Support

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On May 17, we discussed gold breaking below the lower boundary of its 4-month, 70-dollar trading range (trading range – $1,300 to $1,370 in Figure 1 and horizontal trendlines in Figure 2 – GLD shown).

Figure 1. Gold Daily Chart

Technical Developments

  • After the initial break below the horizontal trading range, gold found support at the trendline connecting the December 2016 & December 2017 lows (support – green trendline; retest – last green arrow).
  • Over the next couple of weeks, the commodity staged several attempts to move back within the horizontal range however it halted at two major resistances:
    1. Its 200 SMA (white line in Figure 2 and blue line in Figure 1).
    2. The support-turned-resistance horizontal trendlines (lower bright blue and purple trendlines in Figure 2).
  • On Friday (June 15), gold moved below the trendline that had served as support in May and June (green trendline).
  • This week, the commodity has continued to slide, so far, giving no indications that it will quickly recover and move above its broken support.

Figure 2. GLD Daily Chart

Implications

  • Gold’s sharp decline on June 15 confirmed the importance of the green trendline. The break below it is deemed significant, at least in the short-term.
  • Given the break below the 1.5-year support (green trendline) and the lack of major support levels in the $1,240 – $1,280 range, the target obtained from the trading range breakdown is likely to be met (target – $1,230 obtained by projecting the $70-dollar height of the pattern from the point of the breakdown).

Outlook

  • Short-term bearish as long as the commodity remains below the lower of the green trendline and its 200 SMA (currently at $1,308).
  • Neutral with a bullish bias if gold quickly moved back above the green trendline and subsequently above its 200 SMA.
  • Short- and long-term bullish above $1,380, as a break above 2016’s high will activate the previously discussed longer-term upward targets.

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 14 rated postsPublished author of technical research. In his work on price “gaps”, published in the 2018 International Federation of Technical Analysts’ Annual Journal, he developed a new technical tool for analyzing and trading the “gap” phenomenon – the “K-Divergence” (http://ifta.org/public/files/journal/d_ifta_journal_18). Besides obtaining a Master in Financial Technical Analysis, he has completed a BBA and an MBA from the Schulich School of Business in Toronto and has completed all exams for the CFA, CMT and CFTe designations. Currently, providing research to investment management and financial advisory firms. http://www.linkedin.com/in/konstantindimov




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