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Long-Term Cryptocurrency Analysis: Market on New Heights Fueled by Rotation

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The first week of the New Year has been another one for the history books in the cryptocurrency segment, as several coins rocketed higher again, with Ethereum and Ripple leading the way higher among the majors. The trio of NEM, Stellar, and Cardano made headlines as they surged higher on the list of the most valuable coins, but volatility was the name of the game in these break-out markets, while the more established names diverged substantially after the hectic holiday season.

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Bitcoin was a laggard for most of the week, but it got back to life towards the end of the week, as altcoins turned lower. BTC is in a neutral long-term position after the recent correction, and although the short-term setup is now bullish, odds still favor another leg lower in this cycle, after the historic run-up of the recent months. Primary support is still found at $13,000, with further levels found at $11,300, $10,000, and $9000, and stronger levels at $8200 and $7700.

BTC/USD, Daily Chart Analysis

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Ethereum hit a historic record high after recovering from the mini-crash two weeks ago, topping $1000 during the week, before entering a short-term pull-back. As the recent correction didn’t clear the overbought readings of the coin, we expect another strong move lower soon, although the short-term trend is still intact, and traders could still hold their positions here with tighter stops or trailing stop orders.  Key support levels are now found at $850, $740, $625, and near $575.

ETH/USD, Daily Chart Analysis

Let’s see the outlook for the other major altcoins after the first week of the year.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin has been trading similarly to Bitcoin lately, lagging the other majors for most of the week, and moving higher during the weekend, as the rotation in the segment took another turn. As the coin is nearing neutral territory from long-term momentum perspective a more lasting bounce is possible, but as BTC, LTC is also likely to at least re-test the crash lows in the coming weeks. Key support levels are now found between $250 and $260, at $125 and $100, with a weaker zone around $170, and primary resistance ahead at $300.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple broke-out yet again earlier on this week and hit yet another new all-time high near the $3.30 level, before spiking lower in an overbought short-term correction. The coin is now testing the dominant rising trendline, and given the extreme momentum readings, we advise long-term investors to remain cautious here, although traders could still open small positions to speculate on another push higher. Primary support is now at $1.50, with short-term levels above that at $2.10 and $1.80, and further levels at $1.25, $0.85, $0.68, and $0.42.

Dash

DASH/USD, Daily Chart Analysis

Dash traded in a choppy but relatively narrow range for most of the week, and the coin is among the relatively weaker coins after the initial drop to the $850 area. The currency remains in a broad correction pattern and, we expect the large-scale move to continue, as the MACD indicator still points to bearish pressures. Below the primary support zone at $1000 and the key zone around $850, further important levels are still found just above $600, at $500, $470, and near $410.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic added to its gains earlier on this week, and it spiked almost to the $40 level before turning lower again, as it continues to work its way through the overbought long-term momentum readings. While the currency is already in a much more favorable position than a few weeks ago, we still expect a deeper correction to reset the sentiment in the market, and investors will likely have better opportunities to add to their holdings. Strong support levels are found at $30, $25, and at $18, while primary resistance is ahead at $34.

Monero

XMR/USD, Daily Chart Analysis

Monero moved below the previously dominant rising trendline, continuing the correction, and we expect further downside in the coming weeks after the stellar rally. The $300 support is still likely to fall in the coming period, with further key levels found at $240, $200, $180, and $150, while primary resistance is ahead at $400.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA remained stuck in a long-term correction, being among the relatively weaker coins during the first trading week. of 2018. As the coin topped out already one month ago, a bottom might be near in time, but a significant dip is still likely after the exponential surge, so investors should remain patient with adding to their holdings. Support levels are still found at $3, $2.35, and $1.50 while primary resistance is ahead near $4.

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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23 votes, average: 3.22 out of 523 votes, average: 3.22 out of 523 votes, average: 3.22 out of 523 votes, average: 3.22 out of 523 votes, average: 3.22 out of 5 (23 votes, average: 3.22 out of 5)
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4.7 stars on average, based on 99 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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10 Comments

10 Comments

  1. ridge195

    January 6, 2018 at 10:21 pm

    I gave a low rating since there are too many conflicting opinions on the articles. Earlier there is a trade recommendation to buy monero because jt is on the upswing and here it is saying it is going into a deep correction. Its like there is no communication of ideas.

  2. MinerMatt17

    January 6, 2018 at 10:23 pm

    I am glad you added a voting button so I can give these articles a 1 star. No consistency to trade recommendations on Bitcoin, Dash, Monero, Etc.

    There is nothing to back up your repeated claims that bitcoin will correct further. It had its 40% correction, this is normal, not its time for higher lows, and tests of new highs in the coming weeks. Market cap of crypto is surging, not sure why you hate on bitcoin so much.

  3. persiano

    January 7, 2018 at 12:15 am

    È utile avere sottomano i livelli di supporto ma null’altro. Mi sembra la solita panoramica (anche incompleta, manca sempre BCH ETC) generale sulle crypto. Servono analisi anche meno tecniche ma più reali, del tipo: la settimana prossima la Sec si pronuncierà sull’argomento xyz o Ripple ha confermato un Escrow pertanto ci aspettiamo delle oscillazioni che…

  4. dfontes1188

    January 7, 2018 at 3:18 am

    Their disclaimer says it all “Never invest (trade with) money you can’t afford to comfortably lose”

    That’s mostly what you’ll do with these recommendations, lose.

  5. timallen

    January 7, 2018 at 11:16 am

    Isn’t the clue in the title – ‘long term’. I presume the trades are more short term in nature. That said to help readers perhaps there could be more cross referencing of recommendations. Keep up the good work everyone at Hacked

    • MinerMatt17

      January 7, 2018 at 10:34 pm

      Bitcoin, dash, and Monero can’t reach 1.75 – 2 x their current values and then correct that far back down again in the long term without the whole market collapsing. Don’t try to find excuses for them, they just don’t match up their trade recommendations with the analysis. Or really take into account the massive increase of the Market Cap of Crypto frankly for that matter.

  6. dist

    January 7, 2018 at 11:27 pm

    All of this analysis is opposite of how I feel and the charts show for these coins, especially dash and bitcoin. I’m still an alt guy anyway but the only reason all of these coins aren’t 50% up right now is because damn near every exchange is down at the moment.

  7. Chris G

    January 8, 2018 at 4:08 pm

    5-stars because Mate’s advice has made me a pile of $ over the last year …

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Analysis

Cryptocurrencies: Five Reasons Why The Worst Is Behind

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February 5, 2018 is the day when investor fear was replaced by greed. That marked the current bottom for cryptocurrency prices.  Simple enough to make this claim now that we have had a few good trading days.  But how do we know for sure that the worst is behind?

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Oh if there was a reliable way to measure fear and greed in this nascent crypto world. It could tells us emphatically when market tops and bottoms are occuring, we could make some real digital dough.  True, there are lots of tools that have been tried on traditional markets likes stocks and bonds.  But if these will truly work in crypto land remains to be proven.

Sometimes the most reliable barometer is nothing more complicated than “gut feel”.  Here is what feels encouraging when I apply this test.

The February 5th Bottom

Volatility has been a major feature in crypto trading since day one.  After better than a 7000% appreciation in Bitcoin and Ether in 2017, should a massive correction be a surprise? Between December of last year and February 5th, Bitcoin lost almost two thirds of its value while Ether dropped almost 50%.  We could go on listing every currency but you get the point.

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It this were the infamous Dutch tulip bubble of 1634 the carnage would have continued endlessly.  With crypto, investors collectively found value starting on February 5.  Since then, Bitcoin has gained 50% and Ether about 30%.  That has all taken place in a matter of a two weeks.

This is unprecedented.  When the dotcom price burst in February 2000 the Nasdaq began a 75% fall before hitting bottom in November.  It took fully 14 years before the Nasdaq fully recovered.

Running Scared Of Government

Many investors try to connect the stock market correction with the slide in the cryptocurrency markets.  That would be a mistake because the circumstances are quite different.

The crypto correction and frightening headlines coming from China and Korea about threatened government crackdowns had everything to do with investors heading for the sidelines. This is not to ignore the mechanical influences like the slow transaction speeds etc. But the minute the word government comes into the picture, the worst fears take over.

With the benefit of time, investors are slowly coming to the realization that no government regulation can effectively control ownership of cryptocurrencies. They can however, regulate the operation of exchanges and that is a good thing.  This offers the chance to clean up the bad practices, excessive fees and outright scams which have hurt the individual investor.  

Initial investor reaction to the Chinese and Korean government news reminds us of an important point.  There is no such thing as perfect information in the crypto market.  Even so called professional investors know very little.  The general public are price driven momentum players.  Even erroneous headlines move markets; facts take more time .  

A  Pickup In ICOs

It doesn’t matter if you are dealing with stocks bonds or Bitcoin, when investors are willing to put money in the most speculative sectors, that is a sign of market strength.  Recently we wrote an article noting a precipitous drop in capital raised from ICOs during January.

We used data compiled by ICO Watchlist.  These folks are the only ones collecting data and their numbers don’t alway agree.  But we are using their date consistently for comparative purposes.

From a monthly average of about $400 million during the four peak months of 2017,  January dropped to just $76 million.  Easy to understand, investors lost their confidence in high risk instruments.

Things are beginning to change. With the recovery of major currencies the ICO market is showing new life.  With more than a week left in the month, ICOs have raised over $176 million, according to ICO Watchlist.

These figures exclude the current ICO underway for messaging app Telegram that claims it has raised $850 million thus far in a $2 billion total effort.  If these initial reports prove accurate it would be the largest ICO on record and create bold headlines.

More Hedge Funds Are Coming

According to Autonomous hedge fund money is piling up to between $3.5 and $5 billion marked exclusively for crypto investing.  The rise is dramatic reaching 226 funds globally compared with about half that many as recently as 5 months ago.  At the start of last year there were just 37.

The Negative Headlines Are Gone

There is nothing like raising prices to force the media to seek explanations.  Now instead of naysayers like Warren Buffett being quoted incessantly, CNBC brings on Shark Tank host Robert Herjavec declaring the Bitcoin is “going to skyrocket again” the “blockchain technology is here to stay” and that more government regulation will be the key driver.

CNBC even dragged out an old forecast by Tom Lee prejecting Bitcoin at $25,000 this year and Kay Van-Petersen of Saxo Bank predicting Bitcoin at $100,000.

The market litmus that I call “ gut feel” is hardly scientific.  There are probably analysts of big data that can offer better supporting evidence.  But for now, things are looking pretty good.

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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4.3 stars on average, based on 21 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Technical Analysis: Bitcoin Tests Weekend High as Consolidation Continues

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The major cryptocurrencies entered a shallow correction during the weekend, and most of the coins are still trading below their prior rally highs, with only Ethereum Classic registering new highs. BTC is also very close to its Saturday high, as it is still leading the market higher, outperforming both Ethereum and Ripple.

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Bitcoin is still slightly overbought form a short-term perspective and the correction could still continue in the coming days, with key support zones found near $10,000 and between the $9000 and $9200 levels. That said, the price action in the most valuable coin and the broader segment is still in line with the bullish scenario, and we expect the trend to continue after the correction. Above the $11,300 level further resistance is ahead at $13,000 and $14,250.

BTC/USD, 4-Hour Chart Analysis

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Among the other relatively strong coins, Litecoin and Monero are also holding up well, while NEO is also showing short-term strength, diverging slightly from Ethereum which it has been correlating with in recent weeks.

Monero is also trading close to the weekend highs, as is working its way through the overbought short-term momentum readings. The coin is well above the previously dominant trendline, in clear short-term uptrend. Traders and investors could be looking for entry points during the correction, with strong support at $300, $280, and $240.

XMR/USD, 4-Hour Chart Analysis

(more…)

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 99 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: Market Still on Bullish Track as China, US Closed

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The segment might be in for a long weekend regarding trading activity, as both the US and Chinese traditional markets are closed, for the New Year and Presidents’ Day, respectively. That said, the major coins could still provide important clues about the state of the current uptrend, as the crucial correction that started yesterday is still ongoing, even with some of the currencies showing encouraging relative strength.

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The positive signs that we have been monitoring throughout the rally continue to persist, and as we mentioned yesterday, this pullback is very important in establishing a bullish cycle in the sector after the preceding steep decline.

Correlations remain relatively low, the momentum of the decline stayed muted so far, the leaders of the rally are still behaving well, so bulls could be looking for another leg higher soon.

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BTC/USD, 4-Hour Chart Analysis

Bitcoin is trading slightly below its weekend highs after spiking down towards the $10,000 support yesterday, as the largest coin recovered well following the initial move.

BTC still faces strong resistance near $11,300, with the next major level ahead at $13,000, and as the short-term momentum indicators still have room to correct, the consolidation could continue in the coming days with crucial support below $10,000 found in the $9000-$9200 range.

Ethereum Classic Leading Again

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to spearhead the rally, as the coin already hit a new cycle high above $38 today in early trading, and although the correction, which started before the segment-wide pullback could still continue, the relative strength of the coin is encouraging.

Above the current levels, further resistance is ahead only near $43 and $47, the all-time high for the currency. ETC could be the first major to score a record high after the correction, but long-term investors should be aware that another bullish swing could already carry the coin to overbought momentum readings, with it being already up almost three times off the crash lows, so now we wouldn’t add to long-term holdings.

LTC/USD, 4-Hour Chart Analysis

The other major altcoin are behind ETC in the cycle, with LTC and Monero still being the strongest from a technical perspective. Both coins are still trading in orderly short-term corrections above the previously dominant declining trendline, and they will likely continue to lead the broad rally. Ripple could also be ready for a move after its longer correction, and NEO is still showing surprising in today’s quiet environment, with the rest of the majors being virtually unchanged.

Stay tuned for our detailed technical analysis later on today.

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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8 votes, average: 4.75 out of 58 votes, average: 4.75 out of 58 votes, average: 4.75 out of 58 votes, average: 4.75 out of 58 votes, average: 4.75 out of 5 (8 votes, average: 4.75 out of 5)
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4.7 stars on average, based on 99 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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