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Long-Term Cryptocurrency Analysis: Ethereum Leads Yet Another Rally Attempt

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The major coins had a relatively calm week, especially following the early sell-off as the largest currencies all held up above their crash lows and entered a low-volatility period. Thanks to the stabilization, and a slight breakdown of the correlations between the coins, some early strength is already obvious in some of the altcoins, as we expected. That said, the long-term setup in the case of BTC, and most of the majors are still bearish, and caution is advised for traders, as volatility can spike higher again.

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Bitcoin held up above the $10,000 level after the early-week decline, and it traded with a focus on the key $11,300 level throughout the rest of the week. The price of BTC stayed firmly below last week’s high at $13,000, and with the declining trendline also well above the current levels, the downtrend is still clearly intact.

With that in mind, a re-test of the lows is still likely and another leg lower below $9000 is also possible, with further support levels at $8200 and near $7650. With the MACD nearing oversold territory, investors could still add to their holdings near the main support levels below $10,000 while traders should wait for a confirmed trend change before entering new positions.

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BTC/USD, Daily Chart Analysis

Ethereum continues to gain ground on basically all of the majors, as we speculated before the correction, in the face of the still overbought long-term setup. That said, we expect the correction to continue despite the current strength, and the coin will likely trade below the prior low before the end of the current cycle.

Primary support is found at $1000 with further levels at $850, $740, $625, $575, and near $500. Investors and traders should wait until the overbought readings are cleared before entering positions in ETH.

ETH/USD, Daily Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin has been hovering around the $170-$180 support/resistance zone all week long, still being among the laggards of the segment from a short-term perspective. While the correction is likely to continue with new lows in the coming weeks, the sell-off means that the coin is nearing an oversold setup, and a durable rally will likely follow. Investors could add to their positions near the $125 and $100 levels, while traders should still wait with entering new trades.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple has also been acting weak this week, and the coin remains in a bearish long-term setup, with the $1.25 level being in the focus this weekend. We expect a test of the $1 and possibly the $0.85 level in the coming period, but investors could still add to their holdings near those levels after the deep correction.

Dash

DASH/USD, Daily Chart Analysis

Dash closely followed the move in Bitcoin during the week, and it remained among the weaker coins, getting stuck below the important support/resistance zone around the $825 level. The currency is likely to test or dip below the crash lows at $625 before the end of the cycle, but investors could add to their positions near the main levels, with further support at $500.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic is following its “big brother” ETH higher today, passing the $30 resistance in the process, but both the short- and long-term setups are still negative. That said, the relative strength of the coin is encouraging from an investment standpoint, and investors could still be looking for entry points on the short-term sell-offs near the key levels at $25 and $23.

Monero

XMR/USD, Daily Chart Analysis

Monero lost its previous relative strength as the long-term bearish setup is dominant, and the coin is trading below the key $330 level despite the weekend bounce. We still expect a re-test of the crash lows in the coming weeks, with a possible dip to $200, although the daily MACD is now in neutral territory. Investors could add to their positions near the main support levels below $300, while traders should wait for a trend change.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA has been under pressure for most of the week, getting the closest to the crash low among the majors, but holding up above the key level thanks to the late-week consolidation. The long-term picture is close to getting oversold, and although we expect further volatility in the coin, with a possible dip to $1.5, the timing of a durable bottom could be earlier than the rest of the segment. Investors could still add to their positions near the main support zones levels at $2.35, just below $2, and $1.5.

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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4.5 stars on average, based on 255 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

Crypto Update: Coins Lose Ground as Range Trading Continues

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While the weekend rally got bulls hope up that the consolidation phase might have ended, the technical setup hasn’t changed much in the segment, and today all of the major coins are lower again. The losses, which range from 2-5%, are not significant from a long-term standpoint, and most of the top coins are still clearly above the crucial support levels that mark the lower boundaries of the short-term trading ranges.

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With that in mind, traders still shouldn’t change their neutral stance, as there is no clear momentum present that would justify new positions here. Bitcoin continues to slightly outperform most altcoins today, but the divergence is not significant from a technical standpoint. Trading volumes continue to be well below the levels of the recent weeks, and that reinforces the bullish consolidation scenario.

BTC/USD, 4-Hour Chart Analysis

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BTC drifted back below the key $8400-$8600 zone, and it remains stuck the lower boundary of the range today, despite its slight relative strength. As the short-term MACD indicator is neutral, and our trend model is also on a neutral signal, further choppy trading is likely ahead.  Short-term support is found near the intraday low, at $8150, with a stronger zone between $7650-$7800, with further resistance ahead between $9000 and $9200, $10,000, and $10,500.

ETH/USD, 4-Hour Chart Analysis

Ethereum is trading right at the center of the short-term range, as the coin gave back most of its weekend gains, while losing its relative strength in the process as well. The coin remains on a neutral short-term trend signal similarly to the broader market, with the price action still being consistent with an orderly correction. Resistance is ahead between $735 and $780, at $845 and $900, while support is found between $625 and $645 and between $555 and $575.

Tron Still Outperforms as Correlations Remain High

TRX/USD, 4-Hour Chart Analysis

Tron made the most progress among the op coins since bottoming out after the correction, and the coin remains bullish from a short-term perspective despite the current pullback. The $0.075 support/resistance level is in the center of attention, while the late-April high at $0.010 is the next target for the move. As the broader market remains in a corrective phase, but the coin is one of the prime candidates to hit a new high in the coming weeks.

Dash, Monero, Ripple, and Litecoin are still weaker than segment average, while the recently lagging IOTA held the key $1.7 level. For now, there is still no sign of a developing robust leadership, as EOS failed to regain its bullish momentum, and no major joined Tron in the rally.

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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4.5 stars on average, based on 255 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 Analysis: Dow Jones Moves Toward Intermediate-Term Target, Closes above 25,000

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Technical Overview

  • On May 8, the Dow Jones Industrial Average was on the verge of completing a 2-month bottoming pattern. On May 9, the index gave the buy signal with a minimum price target of 26,200 (1,300 points from the point of the breakout – white vertical trendline in Figure 1).
  • Last week’s advance fell less than 5 points short of the 25,000 level. The 8 EMA served as support during the subsequent correction (yellow line).
  • Today (May 21), the index jumped by nearly 300 points to close above 25,000 for the first time since March 13.
  • The Feb 9 & April 2 lows have created a tentative “double bottom” formation. The pattern will be completed if the index breaks above the pattern’s interim high (red horizontal trendline).

Major support levels:

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  • The 24,600 level (last week’s base).
  • The neckline of the inverse H&S pattern (white downward-sloping trendline, currently at 24,200).

Major resistance levels:

  • Double bottom interim high at 25,800 (red trendline).
  • Origin of February correction & January high – 26,400 to 26,617 range.

Figure 1. Dow Jones Industrial Average Daily Chart

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Implications

  • While the tech-heavy NASDAQ pulled back from its intraday high, DJIA continues to perform strongly, marching towards the upside target obtained from the H&S pattern.
  • In one trading session, the index made up for an entire week of sideways/corrective movement. Such price action is indicative of fast-moving markets, which are leaping towards a specific target. In this case, the completion of the inverse H&S is expected to continue driving the index higher at least until it retests the 25,800 level.
  • If the index moves above 25,800 the double bottom will be completed. A move above January’s high will further strengthen the bullish thesis and shift the long-term outlook to bullish.
  • Long positions in index-tracking ETFs and constituents recommended.

 Outlook

  • Short-term outlook as long as the index remains above its 8 EMA.
  • Intermediate-term bullish as long as the index remains above the neckline of the inverse H&S pattern.

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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4.8 stars on average, based on 12 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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Analysis

Crypto Update: Sideways Drift Continues as Bitcoin Fights with the $8400 Level

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The largest coins attempted another rally towards the end of the weekend, but today the, not too strong, momentum faded and the majority of the majors is sliding lower today. The coins are in or close to the recent trading ranges, with the whole segment hovering in or near the recent ranges, without major changes in the technical setups.

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The low-momentum environment means that the coins are still on neutral short-term trend signals, and traders should still wait before entering new positions, as the short-term trend remains corrective. That said, most of the majors are holding up above crucial support levels and the underlying bullish trend is intact while the overbought readings that developed during the late-April rally are being cleared. Out of the top coins, only Tron made significant technical progress, and until a clear leadership develops, choppy conditions will likely continue.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin finally showed some relative strength today, reclaiming the $8400 level, and reaching an intraday maximum near $8600. Despite the move, the coin is now back near the key support level, and with $8700 level still ahead as strong resistance, the trend signal remains neutral.  While the coin drifted out from the declining short-term trend, a new trend hasn’t established yet.

Short-term support is found near $8150, while the $7650-$7800 range provides long-term support, with resistance ahead between $9000 and $9200, $10,000, and $10,500.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still hovering around the $700 level, still in a corrective phase following strong April rally, and the coin remains on a neutral trend signal as well. Resistance is still ahead between $735 and $780, with targets above that at $845 and $900, while support is found between $625 and $645 and between $555 and $575.

Total Market Value Stuck Below $400 Billion

IOT/USD, 4-Hour Chart Analysis

As altcoins gave back a large portion of the weekend gains, the total market cap of the coins is at $380 billion again, despite Bitcoin’s stability. On a negative note, the previous leaders of the rally, IOTA and EOS failed to make a move, and the latter is showing weakness today, trading near the correction low. All in all, price action points to further consolidation in the segment, and traders should remain patient until buy signals start ot pop up.

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 255 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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