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Long-Term Cryptocurrency Analysis: Look Out Below?

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After last week’s observation that a major top is in or near in the segment, the Bitcoin surge continued for almost a week, with Thursday’s wild session taking the coin as high as $19,000 (the article uses Bitstamp prices) on some exchanges. While the currency already pulled back by more than 20% the long-term picture is still extremely overbought and a much deeper correction is likely in the coming weeks.

BTC spiked below $13,000 today, violating the primary weak support at $13,300, with further levels now at $11,300, $10,000 and $9000, but stronger support only found at $8200 and $7700. Next week’s futures launch could cause another jump in trading activity, and volatility is expected to remain very high amid the likely correction.

BTC/USD, Daily Chart Analysis

While not all altcoins participated in the, supposedly, last part of the rally, IOTA, Monero, and towards the end of the week Litecoin, also stretched above all conventional targets with IOTA also turning exponential after a deal with Microsoft. The coin exploded by more than 350% before entering an initial sharp correction, breaking the steepest short-term uptrend. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.

IOT/USD, Daily Chart Analysis

Let’s see how the long-term charts of the other altcoins look after the crazy week.

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum is holding up well this weekend amid the BTC correction, although the coin didn’t participate in the previous surge, and the long-term momentum indicators didn’t reach extreme levels. For that reason, we don’t expect a similarly deep correction, especially after the previous long consolidation phase. That said, volatile range-trading will likely develop, with possible tests of the $380 and $350 levels, while primary support is found at the prior high near $400.

Litecoin

LTC/USD, Daily Chart Analysis

Trading activity exploded in Litecoin yesterday, as the coin surged above the prior high near $100 and spiked as high as $165 today, despite the long-term overbought readings. While further gains are not out of the cards, traders should take profits after the lofty gains, while investors should definitely wait for a more favorable long-term setup to add to their positions. Key support levels are found below $100 at $75 and $64.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple remains the only major with neutral long-term momentum readings, as the relatively weak coin still trades in the broad trading range that developed back in May. The coin is still bullish from an investment perspective and investors could still add to their positions during the short-term corrections. Support is still found at $0.2250, just below $0.20, and at $0.18, while resistance is ahead at $0.26 and between $0.30 and $0.32.

Dash

DASH/USD, Daily Chart Analysis

Dash held up very strongly amid the volatile correction, proving its apparent relative strength once again. That said, the coin is clearly overbought, and although we expect it to remain strong in the coming months, a deep correction is likely. Key support levels are still found at just above $600, at $500, $470, and near $410.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic’s continued its correction after its stellar rally, and tested the $23 level yet again, while exiting the steep short-term uptrend. Despite the 30% correction, the coin is still overbought and we expect more downside in the coming weeks with a possible test of the next major support level at $18, while resistance levels are now ahead at $30 and $32.

Monero

XMR/USD, Daily Chart Analysis

Monero surpassed all our targets and hit the $300 level during the week, and the coin reached extreme levels regarding the daily momentum indicators. The coin is already down by 20% from its highs but we still expect a deeper correction in the coming weeks, with support levels just below the current price at $240, $200, $180, and $150.

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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4.7 stars on average, based on 469 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. saxonlucius

    December 10, 2017 at 4:07 am

    The list of possible strategies is spot on. I keep impulse buying. Its so not good, but it did make me a lot of money before doing the impulse buying. The market is just so volatile. Monero blew my mind. I can’t believe it. You know, I think that when Bitcoin hits the major exchanges tomorrow, some other currency has to kind of, take Bitcoins place on the private exchanges. It has to be the lead as the non-public crypto. I think Monero or Litecoin are both really good contenders for this spot. They both are almost as old as Bitcoin, have the same models, and use the same hashing SHA-256. Ether might be do really well also, but Ether is just different and so is Bitcoin Cash. Monero could take that spot. Its anonymity is good. The crypto exchanges are just insane. I’m amazed at the activity. It has been a crazy week.

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Analysis

Crypto Update: Litecoin Leads Pullback in Majors

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The major cryptocurrencies are all lower today following the test of the recent swing highs. Yesterday, the early leader of the current short-term uptrend, Litecoin hit the key $51 resistance, and today the coin pulled back sharply, triggering a broad correction in the segment. The leaders of the rally are all notably lower, but they are still holding on to the bulk of their recent gains, and the rising short-term trendlines are all intact.

From a short-term technical perspective, the current pullback is orderly, and as the coins clear the overbought momentum readings, traders could re-enter smaller, speculative positions with strict risk management rules. The long-term technical picture continues to warrant caution, and bear market rules still apply despite the consolidation of the recent months.

LTC/USD, 4-Hour Chart Analysis

Litecoin’s performance continues to be an important tell for the whole segment, and after yesterday’s downgrade in our trend model, the coin’s pullback is weighing on the whole market today. That said, volume patterns and price action in general, are still in line with a short-term uptrend, and traders could be looking for re-entry points and the overbought momentum readings get cleared.

The key $51 resistance level, which halted yesterday’s move, could be in focus again in the coming days, while a deeper correction could see the test of the $44 level. For now, our trend model remains on a neutral short-term signal, while the long-term signal is still clearly negative, with further support levels found near $44 and $38, and with strong resistance also ahead near the $56 level.

BTC/USD, 4-Hour Chart Analysis

Bitcoin remained within its short-term consolidation pattern, as the $3850 level provided support, so far, during the broad pullback in the segment. The MACD indicator is now pointing to an ongoing short-term correction, but the relatively weak short-term uptrend is still clearly intact.

Traders could hold on to their positions here despite the pullback, as the momentum indicators haven’t reached extreme overbought levels, leaving our trend model on a short-term buy signal, but we would with entering new positions until the pullback runs its course. While the long-term technical outlook is clearly negative for BTC here, a move above the key $4000-$4050 zone could lead to a test of the next major zone near $4450, while support below $3850 is still found near $3600 and just above $3450.

Ethereum and EOS Remain Stable as Ripple Fails to Show Strength

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade in a bullish short-term correction pattern near the $145 resistance level. The uptrend is clearly intact in the coin, and although the short-term momentum indicators continue to show overbought readings the rally could soon continue, with the $160 price level still being in sight. Support levels are still found near $130 and $112, while the next major resistance zone is found near $180, and the long-term downtrend is still in no danger here.

EOS/USD, 4-Hour Chart Analysis

EOS, which has also been among the leaders of the rally, continue to show stability amid today’s pullback, but as it got severely overbought during the recent upswing, our tend model is on a neutral signal. Traders should wait for the correction to run its course before re-entering their positions, since the long-term setup in EOS still warrants caution. Support is found near the current price level at $3.80, at $350 and near $3, while resistance is now ahead near $4 and $4.50.

XRP/USDT, 4-Hour Chart Analysis

Ripple remains the primary concern for bulls here, as the relatively weak coin failed to show signs of stability falling back to the vicinity of the $0.32 level. The coin got stuck below the dominant bearish short-term trendline, and our trend model is now on a short-term sell signal, despite the broad rally in the segment.

With the long-term technicals still being hostile even in the case of a new swing low in the coming week, traders should remain cautious with XRP and focus on the stronger currencies with regards to trading positions. Below $0.32, further support zones are found near $0.30, $0.28, and $0.26, while short-term targets are still ahead near $0.3550, and $$0.3750.

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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4.7 stars on average, based on 469 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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Altcoins

Stellar Price Analysis: XLM/USD Bulls Run into Resistance and Profit Taking Following IBM Boost

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  • Stellar’s XLM price was seen cooling in the session on Thursday, as the bulls ran into a barrier of resistance.
  • IBM detailed it has several letters of intent from banks to leverage IBM-Stellar technology.

Stellar’s XLM price has managed to pick itself up from the recent low area, where it was moving within the total abyss. The decent falling for XLM/USD was pushing it into totally unknown territory, where the price has not traded before. A low was produced down at $0.07330000 before the bulls kick-started the recovery. It has now gained a chunky 30% over the last two weeks, with upside momentum particularly gathering decent pace in the past four sessions.

The most recent jump north came following the price escaping a nine-session range-block formation. The low of the mentioned range was observed down at $0.07590000, with the high up at $0.08330000; the bulls forced a breach of this level on 18th February. Upon the move above, a fresh wave of buying pressure came into play, with XLM/USD moving to its highest level in almost four weeks. At the time of writing a pullback can be observed, which could be potential profit-taking after the decent run.

Several Banks to Join IBM’s Stellar-based Service

According to a representative from IBM, several confirmations have been received from banks on their intent to incorporate digital assets, including their own stablecoins via IBM World Wire and Stellar. The head of Blockchain at IBM Jesse Lund said:

“We’ve got a launch announcement coming out soon. We’re going to be supporting more than 50 countries out of the gate, 30-40 currencies, and enough market makers to drag along 30 or 40 banks. So we’ll have a significant portion of the world covered. Our goal is to continue to expand that network and to provide global coverage within 3-5 years where you can actually send remittances in a consistent way, immediately, at a very low cost, from anywhere in the world to anywhere in the world.”

Several banks have confirmed their plans to release digital assets, including their own stablecoins, based on IBM World Wire and Stellar. According to the IBM representative, the company has already received several letters of intent from a number of banks around the world.

Technical Review – XLM/USD

XLM/USD daily chart.

Given the recent price cooling, eyes will be on a possible return down to the breached range-block area. A move as described would complete the technical breakout and retest of the mentioned zone. Should this fail to provide necessary comfort to the falling price, then eyes will be on another test of the low, $0.07330000. If a further breach is observed here, then this opens the door once again to a move within an unknown territory, moving within the abyss.

Looking to the upside, if XLM/USD completes the break retest scenario and the bulls capitalize on this, then a decent push back north may be seen. A near-term supply area tracks above from around $0.09350000 up to $0.0980000. Should the bulls force a break above the mentioned supply, then a retest of the 2019 high area would be eyed. In other words, a move back within the range of $0.13-0.1400000.

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 125 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Altcoins

Bitcoin Cash Price Analysis: Bullish Pennant Pattern Confirmed

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  • Bitcoin Cash price remains very much elevated, as the bulls continue to run north.
  • BCH/USD price action has formed a bullish pennant pattern formation, subject to a breakout higher.

BCH/USD: Recent Price Behavior

The Bitcoin Cash price has been a notable out-performer over the past few sessions, with the BCH/USD pair rallying as much as 23% since 17th February. In doing so, it reached its highest levels in over six weeks. The aggressive move north came after a prolonged period of range-bound trading via the daily chart view.

Between 8th – 17th February, BCH/USD was moving within an extremely narrowing range-block formation. This represented a lack of commitment from both camps after being confined within a range low of $117 to a high around $125. On 18th February, the bulls managed to force a breach and daily closure above the confines of the mentioned range.

Coinbase Adds Bitcoin Cash Support to Wallet App

Coinbase, a U.S.-based cryptocurrency exchange and wallet service provider, announced it has added support of BCH to its Coinbase Wallet.

“The new Wallet update with Bitcoin Cash support will roll out to all users on iOS and Android over the next few weeks,” the company said in an official blog post.

The app will facilitate support for both CashAddr and legacy addresses. Private keys will be encrypted on the mobile device by the Coinbase mobile wallet. Last week Coinbase announced the following: “users can now back up an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys.”

Technical Review – BCH/USD

BCH/USD 4-hour chart.

At the time of writing, the BCH/USD price is still holding at elevated levels, with gains in the session amounting to 2.5%. Over the last two sessions, between 19-20th February, the price action has somewhat moved within a range. The detailed price behavior has seen a bullish pennant pattern formation, which is subject to a further potential move north.

Near-term resistance is eyed at $145.50, where the upper acting trend line of the pennant is tracking. Should the bulls manage to break this down, then expect a fresh wave of selling pressure to kick in. To the upside, eyes will then be on supply observed up within the $160-$165 price range.

In terms of near-term support, the lower acting trend line of the pennant which is tracking at $140 is the next major target; a breach could then expose critical daily support at $137. Lastly, if neither safety nets protect the price from falling, then there runs the risk of a full reversal of the recent gains.

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 125 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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