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Analysis

Long-Term Cryptocurrency Analysis: Sharp Christmas Correction in Crypto-Land

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Compared to the lull in most of the traditional financial markets, cryptocurrencies market experienced a surge in volatility before Christmas, as Bitcoin entered a deep correction, dragging the rest of the market lower as well. The largest coin that has been losing market share lately still has a dominant role in the dynamics of the segment, and the stellar rise of the last couple of month led to an extremely overbought state in the BTC market.

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The digital currency tumbled as much as 40% from but with that it remained positive even for the month of December, underlying the extent of the previous advance. Although the Friday massacre ended with a huge bounce, carrying Bitcoin back near the $16,000 level, from a low of $11,200, the technical setup remains bearish, and further corrective price action is likely. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, Daily Chart Analysis

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Ripple broke out above the $1 level this week, after triggering a long-term sell signal following its historic surge, and topped out near the $1.25 level, for now, still hitting new highs during the early stages of the Bitcoin correction. The short-term uptrend is still intact, but we expect the long-term overbought readings overcome the bullish momentum and cause a deeper correction soon. Key support levels below $1 are found at $0.85, $0.68, and at $0.4250.

XRP/USDT, Daily Chart Analysis

Let’s see how the mini-crash changed the outlook for the other major altcoins.

Ethereum

 

ETH/USD, Daily Chart Analysis

Ethereum spiked as low as $510 during the sell-off, but it bounced back towards the previous primary support at $740 afterwards, as volatility skyrocketed. The long-term MACD is just turning lower following the previous break-out, and we expect a longer consolidation period before the next durable rally, with a possible test of the break-out level at $400. Above that support is found at $625 and $575, while the all-time high is ahead at $850 as resistance.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin also got smacked lower, below the $200 level, before the rebound that surpassed the previous support zone between $250 and $260, and the coin even spiked above $300. As the majority of largest coins, LTC is also still stretched regarding the long-term picture, and the correction will likely continue after the bounce. Key support levels are found at $125 and $100, with weaker levels at $260, $250 and $170.

Dash

DASH/USD, Daily Chart Analysis

Dash broke below the steep short-term uptrend line on Friday, and fell almost 50% from its recent all-time high, getting close to the support zone between $815 and $865. While the remains relatively strong among the majors, we expect it extend the correction together with the segment, with further key support just above $600, at $500, $470, and near $410.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic is now trading in a short-term downtrend despite the strong bounce and investors should wait until the still extreme momentum readings get cleared, before adding to their positions. A decline below $23 remains likely in the coming weeks with support levels also at $25 and $18.

Monero

XMR/USD, Daily Chart Analysis

Monero is still the strongest altcoin from a technical standpoint, trading inside a steep short-term uptrend and above the crucial $300 level despite yesterday’s spike. Despite that, a deep correction is likely in the coming period, and now even traders should stay away from opening new positions until a more favorable long-term setup emerges. Key support levels below $300 are still found at $240, $200, $180, and $150.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA flash-crashed amid the broad sell-off on Friday, and although it recovered above the $4 level and still trades slightly north of the dominant rising trendline. We expect the correction to continue, with strong support is still found at $3 and $1.5, with a Fibonacci support level between those at $2.35. The long-term MACD is still in extreme territory, and it remains in a bearish setup.

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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  1. MinerMatt17

    December 23, 2017 at 10:12 pm

    I will ask again, what makes you sure there is more correction to come?A 40% sell off is right in line with all other corrections? Especially considering the profit takings by whales, and all the new people that bought the top that sold their weak hands.

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Analysis

Long-Term Cryptocurrency Analysis: Broad Correction Enters Next Phase

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The overbought BTC-led correction that has been the dominating technical process in the cryptocurrency segment in the last month or so continued in earnest today, amid the intensifying regulatory steps concerning the sector. The three-week-long consolidation that followed the initial mini-crash concluded with a sharp sell-off overnight rearranging the long-term charts, while likely kicking off another volatile period.

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While most of the crash lows held up today in early trading in the majors, especially in the case of the late leaders like Ethereum and NEO, some of the relatively weaker coins are already trading below the December minimums. We expect most of the majors to follow Dash and LTC, the weakest of the largest coins, lower and trade below the previous lows, as sentiment will likely swing to a bearish extreme.

The $11,300 level has been in the center of attention throughout the session today and the most valuable coin experienced heavy trading around the level as expected. As the daily MACD is still in neutral territory, the coin could be in for another leg lower, but after the 40% correction and the rather lengthy consolidation, investors could be looking for entry points during the move near the key support levels at $10,000, $9000, and the stronger levels at $8200 and $7700.

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BTC/USD, Daily Chart Analysis

As Ethereum is in a different part of its cycle the long-term momentum readings are still overbought, and that could mean a more protracted correction for the second largest coin. That said, following a multi-month consolidation like the one in Ethereum before, we still expect the token to outperform BTC from a long-term technical standpoint. ETH is now below the short-term trendline, and it’s likely to dip below $1000, and the prior top at $850. Further key levels are found at $740, $625, $575, and near $500.

ETH/USD, Daily Chart Analysis

Let’s see the outlook for the other major altcoins after today’s bloodbath.

(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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Analysis

Crypto Update: Chinese Crackdown Triggers Next Leg of Correction

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The cryptocurrency segment is crashing again, with double-digit losses across the board, and with several coins shedding around 30% in one day amid the widespread and heavy selling. The sell-off was triggered by reports on a new set of measures by the Chinese authorities limiting crypto trading, which added to the still looming South Korea related regulation worries. Bitcoin tested the mini-crash lows at $11,300 today in early trading, dipping slightly below that level before a strong bounce started.

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The most valuable coin is now between two crucial support/resistance lines, with the other ahead at $13,000, and as the downtrend is entering its more mature phase the $10,000 and $9,200 levels could come in play, with a possible dip to the support zone near $7,650.

BTC/USD, Daily Chart Analysis

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Interestingly, the coin is still hovering within the daily range of the crash of December 22nd, and that points to a very active and volatile period ahead near the low at $11,300, as automatic orders will likely get triggered on both sides of the market.

The short-term setup is bearish, and although it’s possible that the primary support level will hold, odds still favor another leg lower, following the exponential run-up at the end of last year that pushed sentiment into bullish extremes.

BTC/USD, 4-Hour Chart Analysis

Altcoins

(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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Analysis

Music: One Overlooked Use Case

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So far in this year, Ethereum has been the crypto star appreciating over 80% to a recent record of $1402. All this suggests that more and more applications are being created. We know this by the demand for Ether, the gas that drives the Ethereum network.

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The reason behind the explosion of Ether demand was confirmed by Ethereum co founder Steven Nerayoff in a CNBC interview where he claimed the number of Ethereum projects today is more than 10 times year ago levels.

One of those areas is the music business and there are several names appearing on the ICO list to add to your research agenda.

Why The Music Business Needs Help

Music may live forever but the business side has been in trouble for a long while. Over the last decade there have been only three years when the global value of music sales increased. The combination of digital music and outright pirating through peer-to-peer sharing has much to do with the long-term trend.

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Throughout the world there are 69 copyright and royalty societies given the responsibility of documenting, collecting and distributing music royalties. That means collecting a few pennies whenever a song is played on the radio, Internet or anywhere else. Four of the largest of these is in the US, followed by Japan, Germany and Britain. Their operations are truly byzantine.

Experts in the music-publishing field confirm the time between music usage and royalty payment can run close to 24 months. Even then not all royalties are distributed. According to my sources, there are often millions of dollars collected by royalty authorities everywhere that never make it to the entitled recipients. That sort of practice borders on criminal behavior but copyright and royalty societies operate in a sub-rosa manner making it difficult to understand their policies.

In the past just 4 major record labels controlled over 80% of the industry. These giants could afford a full time legal department to pursue royalty issues dominated the music industry. Today, however, independent labels represent almost one-third of the market. This means less democracy in the business with the young independent artist at a particular disadvantage.

Of course, musicians aren’t the only group of artists loosing out on their pay. There are writers, poets and painters that go largely unprotected.

The music business is just easier to track because it has more data. Yet in spite of all the information, the music industry is widely recognized for its lack of transparency. Blockchain technology has the ability to disrupt long-standing industry practices.

ICOs To The Rescue

The number of Ethereum based white knights is starting to appear on the horizon promising to rattle the industry and hopefully restore some democracy on behalf of the independent artist.

One simple business model comes from a startup SingularDTV who is attempting to build their ecosystem on top of Ethereum. Here is the basic value added proposal.

SingularDTV tokenizes the artist work. In doing so the artist is turning their music into a financial asset. Anyone who buys into an artist’s token owns a share of the creation and its income stream. The more people consume an artist creation, the higher goes the token price.

Only time will show if SingularDTV succeeds with this model. The consequence of this model is how it eliminates many of the middlemen and nefarious influences in the industry. Instead of singing on a street corner for bread, an artist could raise money upfront without relying on an advance from a record label.

According to SingularDTV, distributing content via blockchain would allow artists to skirt streaming platforms like Spotify to earn royalties on their own terms. Now that is true democracy.

SingularDTV may stand out a bit in the news due its recent ICO success in raising $8 million but they aren’t the only player in the music game. Names like Voise recently raised $1 million as well as Soundchain, Blokur and Opus to name a few.

I am no longer a registered investment advisor, which means I don’t go around making investment recommendations. So I will only suggest this group to put on your list of late night reading. Next time, I will take a closer look at more of these names.

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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