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

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.

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

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.


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.


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/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.


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/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.

Trader 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.