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