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Long-Term Cryptocurrency Analysis: February Lows Challenged but Bitcoin Holds Strong

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Following more than two weeks of heavy selling, which was mostly fueled by regulatory issues and the failure of the largest coins, Bitcoin and Ethereum, to break out from the broad declining trend channels, the segment could have reached a major turning point.

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The reversal on Sunday which was accompanied by relative strength in several crucial coins fits most of the criteria for a key reversal, but the coming days will be crucial to evaluate the buying power behind the bounce.

For now, some short-term buy signals already popped-up, and with the bearish momentum fading in most cases, the downswing could already be over. From a long-term perspective, the lengthy decline that started in December still qualifies as a correction, as we explained in our piece on Bitcoin, but as there are substantial divergences even among the largest coins, we will take a look at the setup and the outlook for the most established coins.

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BTC/USD, Daily Hour Chart Analysis

As for BTC, the setup only slightly changed since last week, as although no official long-term buy signal occurred, with the MACD likely headed for a bullish cross, more aggressive investors could add to their holdings. Key resistance zones are ahead between $9000-$9200, and near $10,000, $11,300, and $11,750, while the dominant trendline is currently found at $10,000.

Ethereum

ETH/USD, Daily Hour Chart Analysis

Ethereum, which had a much later top during the run-up, has been very weak during the current downswing, being one of the only coins to dip below the February lows, with the other late-cycle coin NEO joining it too. The weekend low had a more pronounced spike lower than in the case of BTC and the heavy volume also points to a key reversal.

The currency has already been in the long-term buy zone regarding momentum and investors could still add to their holdings here, although a short-term buy signal is still missing. Primary support is now at $500 while key resistance is ahead at $625, between $740 and $780, and near $845 and $900.

Litecoin

LTC/USD, Daily Hour Chart Analysis

Litecoin has been relatively strong throughout the selloff, similarly to Bitcoin, and the coin only briefly spiked below the key $150 level during the weekend. The currency is still in a corrective downtrend but remains above the broader trendline. Investors could add to their positions here as we expect the recovery to resume. The key $170-$180 zone is just ahead as primary resistance, while the $15 and $140 levels provide strong support.

Dash

DASH/USD, Daily Hour Chart Analysis

Dash spiked briefly below February low in the illiquid weekend market, and the coin is still under short-term selling pressure, but the long-term momentum is already oversold, and investors could add to their holdings here despite the lack of a short-term buy signal. The currency is trading right at the key $400 level with strong resistance ahead at $435, $500, and between $575 and $600, and further support near $360.

Ripple

XRP/USD, Daily Hour Chart Analysis

Ripple tested the February low over the weekend, and it is still hovering around the key $0.68 level, without a clear short-term buy signal, but the long-term setup is favorable. The currency is likely building a new base, and although further consolidation is likely, investors could add to their holdings here. The February low is found at $0.58, with key resistance ahead at $0.85 and $1.

Ethereum Classic

ETC/USD, Daily Hour Chart Analysis

ETC is both on short- and long-term buy signals after the steep decline and the subsequent rebound, and a test of the key $23 level is likely ahead. The coin was the leader of the rally off the February lows and the current strength is a bullish sign for the whole segment. Support is found near $18, $16 and $14.50, while above $23 key resistance is at $25 and $30.

Monero

XMR/USD, Daily Hour Chart Analysis

Monero is also on short- and long-term buy signals after the weekend reversal, and the coin has stayed well above the February low so far after leading the off the February lows. A recovery above $240 would be a very bullish sign for the coin and the segment, but for now, the short-term setup is still shaky despite the oversold momentum readings. Further resistance is ahead at $280 and $300, while support is at $200 and $175.

NEO

NEO/USDT, Daily Hour Chart Analysis

NEO spiked below the February low together with Ethereum that is has been tracking closely for the past months. The coin is still only neutral form a short-term perspective, but the long-term picture is oversold, and the coin remains on a buy signal. Key resistance is ahead at $80, $100, and between $120 and $130, while strong support is at $64 and $50.

IOTA

IOTA/USD, Daily Hour Chart Analysis

IOTA has been showing strength since violating the February low as the first major, and the coin remained on a long-term buy signal thanks to the quick recovery. The coin is now likely headed for another test of the broad declining trendline currently at $1.5 and a break-out is very likely in the coming weeks. Further strong resistance is ahead at $1.9 and between $2.2 and $2.35, while support is found near $1.25 and $1.1.

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 224 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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2 Comments

  1. BittBurger

    March 20, 2018 at 4:28 pm

    Appreciate this article! Great analysis. Hate to be “that guy” but omitting Bitcoin Cash from this is shortsighted. Massive quantities of notable Bitcoin industry players are adding it as a payment option on a weekly basis, and developing support for it across their platforms. There are no fewer than five development teams contributing to it now, which continues the ethos of decentralized development that was lost in Bitcoin years back, thanks to Core.

    BCH’s forward momentum is in stark comparison to Litecoin which, as for the last 8 years, continues to see absolutely no real-world adoption, and the recent Litepay AMA on Reddit proved the team to be inept, disorganized operation void of any solid plans. Gemini will be adding Bitcoin Cash in 2018, which is a massive move, and nearly every Bitcoin ATM machine has added BCH support due to its lower fees.

    Outside of ICX it has to be the most overlooked currency right now, likely due to the FUD machine of those who stand to profit financially from its failure (those who charge to process bitcoin transactions off-chain while suppressing on-chain block size). Have been in the space since 2012 and spent 4+ hours a day trading and monitoring the ecosystem for six years. Confident in my assessment of this sleeping giant.

    • embersburnbrightly

      March 20, 2018 at 8:04 pm

      I also hold BCH and appreciate this comment.

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Analysis

Crypto Update: Ethereum Tops $550 as Altcoins Hit New Rally Highs

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The major coins are having another bullish day after a consolidation period with all of the top 10 cryptocurrencies sporting meaningful gains. Altcoins are leading the charge higher, as the switch in relative strength that we pointed out several times seems to be a lasting phenomenon, with the ETH/BTC pair confirming a short-term uptrend.

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BTC/USD, 4-Hour Chart Analysis

Bitcoin is also up today, but while the majority of altcoins are trading on new rally highs, BTC is stuck below the prior swing high at $8400, which is also a previously established resistance level. The dominant declining trendline is also in that area, and that strong zone could hold back the largest coin for a longer period. A breakout would confirm a new rising short-term trend, with the next major resistance zone ahead between $9000 and $9200.

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ETH/USD, 4-Hour Chart Analysis

Ethereum is among the strongest coins short-term, and with smaller cap altcoins also joining the rally, the whole segment could be ready for a move higher. That said, the broader declining trend is still intact with the coin trading in a strong resistance zone between $555 and $575. A new short-term uptrend is now confirmed but with the declining trendline just ahead, the coin could be in for volatile swings in the coming days. The next target zone is at $625, while support is found at $500 and $450.

Broad Altcoin Rally Lifts All Ships

XRP/USD, 4-Hour Chart Analysis

Ripple, which was among the weakest majors for a prolonged period is one of the leaders today, climbing above $0.75, and eyeing the next major level at $0.84, with tbe coin already being above the previously dominant declining trendline.

On a slightly negative note, correlations are still high between the majors, but there are standout performers despite the concerted rally. Among the long-term leaders, Litecoin is trading near $150, while Monero added to yesterday’s gains, and it’s testing the $240 resistance as we speak.

The early leaders of the rally are slightly lagging in the current short-term swing, but that is likely a sign of rotation, as the likes of EOS, NEO, and IOTA are also higher today, while holding up wrll above the correction lows.

With all of the majors on buy signals in our trend model, we expect the rally to continue even as strong resistance zones are ahead and the road will likely be bumpy after the steep and lengthy downswing.

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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Analysis

Rally Fades in Stocks as Apple Weighs on Nasdaq

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We warned yesterday that stock markets got vulnerable as the major US indices reached short-term overbought readings, and after a choppy Wednesday session, equities turned lower today in early trading. Apple fell by more than 2% in early trading on a supplier report regarding declining orders from the smartphone giant, and the sliding stock dragged the tech segment lower.

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S&P 500 Futures, 4-Hour Chart Analysis

While the short-term technical picture deteriorated, the losses are muted so far, and the rising short-term trendlines are holding up. Volatility ticked higher, with the VIX bouncing off its two-month lows, but the index is well below the levels seen in the beginning of the month, as Syria-related fears continued to ease and the Chinese-US trade spat also took the back seat in the mainstream media.

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DAX, 4-Hour Chart Analysis

Stocks finished broadly lower in Europe, while Asian equities reversed their early gains, with trading volumes still being low across the board. The economic calendar was almost empty today, with only the much worse than expected British retail sales figure adding to the string of negative surprises coming out form the UK this week. In the US, the Philly Fed index came in higher than expected, while weekly jobless claims were in line with expectations.

Dollar Stable as Short Yields Hit New Highs

2-Year Treasury Yields, 4-Hour Chart Analysis

Treasury yields resumed their rise in the quiet environment, and as the short end of the curve continues to outperform the flattening of the yield curve continues in earnest. While forex markets are still mostly flat, the Dollar is drifting higher against most of its peers in US trading.

AUD/USD, 4-Hour Chart Analysis

Commodity-related currencies are little changed, although both the Aussie and the Canadian Dollar are off their recent highs, and should they roll over, the bullish case would receive another hit.  Despite the weakening of the risk rally, crude oil continues to hit multi-year highs, with the WTI contract getting close to the $70 per dollar level today. Gold fell back below $1350, as the choppy consolidation pattern is still intact, and the slight risk-off shift wasn’t enough to trigger meaningful safe-haven flows.

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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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4.5 stars on average, based on 224 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

More Chance to Go Up for Litecoin

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Litecoin short term outlook is quite positive, while in a longer term, it’s somewhat mixed. Shortly, the digital coin may face a very strong resistance at $141, being currently priced at $140. As Dmitriy Gurkovskiy, Chief Analyst at RoboForex, says, Litecoin already tried to test this level earlier this week, but did not succeed.

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In the mid-term Litecoin is trying to break out the current range, and in case it finally manages to break out $141 and stay above, it may go up to $168. Before reaching this target, however, another downtrend may be formed, with Litecoin plunging to the support at $114 again. If the bears succeed in breaking out this level, too, another sell-off target will be at $87.

Current outlook, however, is mostly positive, with the key support being at $114 and the key resistances at $141 and $168. The MACD on D1 is in its negatives, but is going up, issuing a buy signal, while the Stochastic is in the positive area and confirms its buy signal, already issued some time ago.

Fundamentally, Litecoin has got much support this week. The market started buying out the coin once the news on the token being listed at Korbit appeared. As the recent reports say, the crypto started being traded on Korbit yesterday, while withdrawal should be available starting today, Apr 19. This is important for Litecoin: first, Korbit is one of the oldest and most reliable exchanges in Korea; second, as we have already stated a few times, if the crypto becomes widespread across multiple exchanges, its liquidity gets boosted, while the accessibility simplifies the transaction processes.

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Korbit decided to hold a contest, with the top 6 LTC/KRW traders getting prizes in Litecoin (the winner gets LTC 50, the runner-up will walk away with LTC 25). Meanwhile, Litecoin being available on Korbit also helped the crypto to rise on Bitfinex.

Currently, Litecoin is one of the most volatile currencies, mostly because of it always being in the news, which does good to its promotion. As such, it was announced a few days ago that LTC would be used as a payment method, and TenX already started developing a prepaid card for that purpose.

By: Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Disclaimer
Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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 stars on average, based on 1 rated postsI have two degrees in Social Psychology and Economy. After graduation I worked as the Head of the Laboratory of Technical and Fundamental Analysis of Financial Markets at The International Institute for Applied Systems Analysis. The experience and skills he gained helped me to realize my potential as an analyst-trader and a portfolio manager in an investment company. At the moment I'm a financial expert, writing for various financial media sources and a Chief Analyst at RoboMarkets.




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