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Long-Term Cryptocurrency Analysis: Still in the Danger Zone

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As selling pressure continues to dominate the cryptocurrency segment, and very few of the top coins show signs of stability, the bull market is still clearly in danger. While most of the majors are trading above the weekend lows, and Bitcoin held the key support near $5850, the snapback rally lacked bullish momentum.

Correlations are high, as segment-wide trends move most of the smaller coins as well, and that points to further volatile trading and a bearish bias in the coming period. As the previously stronger coins, such as ETH, XRP, IOTA, and EOS has been showing weakness, the odds of a major technical breakdown increased.

That said, as the top two coins are still in bullish long-term patterns, and until a clear and durable break below support, BTC is in a secular uptrend, while ETH is well above its respective line-in-the-sand support level.

BTC/USD, Daily Chart Analysis

Bitcoin continues to trade in a strong short-term downtrend, just above key long-term support, and the momentum indicators haven’t reached oversold readings yet. In the case of a breakdown below $5850, a move to $5000 is likely with a weaker support level found above that at $5500. The zone around $6350 provides primary resistance, with further levels at $7000, $7350, and $7650.

As we stated before, a break below the strong support zone near $5850 would be the first similar event since the beginning of the bear market in 2014, and it could lead to an extended period of bearish bias for Bitcoin after the spectacular bull run of 2017.

ETH/USD, Daily Chart Analysis

Although Ethereum is still stronger from a technical perspective, as far as the long-term view is concerned, although short-term, the coin is showing weakness, reinforcing the broad bearish trend. ETH hit a new more than two-month low today, but for now, the support zones near $400 and $360 are still well below the current price level. Despite the short-term weakness, the long-term trend signal is positive according to our model, with strong resistance ahead at $450, $500 and between $555 and $575.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin plunged as low as $75 during the last leg lower, after violating key support at $100 and triggering a long-term sell signal. The coin tested the six-month low again today before a sharp rebound, but as the dominant trendline is well above the current price levels, even a stronger bounce would keep the bearish outlook intact. Further support is found at $65, while further resistance is ahead at $90, $100, and $110.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is also among the weakest majors, similarly to Litecoin, and the coin is still on a short and long-term sell signal, trading near its fresh nine-month low. Although a bounce could be ahead given the weak momentum of the recent sell-offs, traders and investors shouldn’t enter positions until a confirmed trend change. Primary support is found between $200 and $215, while resistance is ahead at $265, near $300, and at $360.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple failed to build upon its relative strength and it is now on the verge of a major breakdown, trading near the bottom of the basing pattern between $0.45 and $0.54. XRP is not oversold from a long-term perspective, and the coin should avoid a durable break below primary support to keep the secular uptrend intact. Above $0.54, further resistance is ahead near $0.64, while support is found at $0.42.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic had a very volatile period as it outperformed the broader market after an extended period of relative weakness, but for now, the coin hasn’t established an uptrend, as wild swings occurred in both directions. The coin remains above both the key support zone near $13.50 and this month’s low, but as the segment is still weak, another test of the lows seems likely. Further support is found near $11, while resistance is at $16 and $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Despite the strength of the recent sessions, Monero is still among the weakest coins from a longer-term perspective, and the coin remains well below the crucial $150 level. Although the coin recovered to the $125 level, the short-term downtrend is still intact, and the short- and long-term sell signals are still valid.  Support is still found at $100 and $80 while further resistance is ahead at $175.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO remained under strong selling pressure after confirming the long-term breakdown, and the coin fell as low as the $30 support level amid the rout. The coin is still in a strong short-term downtrend, and as it is still one of the weakest majors, traders should stay away from entering new positions. Resistance zones are now ahead at $34 and $40, while support is found at $26.50 and $24.50.

IOTA

IOTA/USD, 4-Hour Chart Analysis

Although it fell below the key $1 level, and the April low is just below the current price level, IOTA is still among the stronger majors from a long-term perspective. That said, the coin is showing short-term weakness similarly to ETH, and a move below the crucial support zone would be a bearish long-term signal. Support is now found near $0.92, $0.75, and $0.65, while resistance is ahead at $1, $1.1, and $1.2.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS followed the general trend in the segment lower, despite its better long-term technical setup, and the coin and the coin is still on a short-term sell signal after the breakdown. That said the long-term setup remains bullish, even as the segment’s outlook deteriorated further. Crucial long-term support is found between $6.50 and $7, while resistance is ahead at near $9, $10, and $12.

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-to-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 394 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

Cardano Price Analysis: ADA/USDT Smashes Out of Wedge, but Saved by Critical Demand Zone

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  • ADA/USDT testing a huge area of demand and a breach by the bears could be catastrophic.
  • Cardano Foundation confirm reshuffle, as Michael Parsons, the former chairman, steps down.

ADA/USDT has continued to be victim of downside pressure after its latest bull run. The price had gained a chunky 20%, between 31st October and 6th November. ADA/USDT managed to peak just above $0.08200 territory. This was the highest level seen since 15th October. Shortly after, gradual selling started to take place, to then see all the gains plus much more taken by the heavy bears.  It appears current bull runs are not sustainable, very much vulnerable to being sold- particularly as these tend to happen in an explosive manner within a short time frame.

Cardano News Flow

Cardano this week made an announcement that Michael Parsons, the former chairman, has resigned from his position at the Cardano Foundation. Prior to this rapid departure, there had been much history of community members demanding for him to be removed. The position will be filled by the Council Member Pascal Schmid, a University of St. Gallen graduate and a financial expert. Cardano’s creator, Charles Hoskinson, accused the foundation and Parsons of neglecting their duties, in addition to bringing in close friends and family into top positions within the organization.

Technical Review – ADA/USDT

ADA/USDT daily chart

ADA/USDT is running at three consecutive sessions in the red- a move which is inline with the broader market, a mass cooling across all major cryptocurrencies. The price was forced to drop a hefty 13% in the late part of the session on Wednesday. Price action was initially moving within a wedge pattern. This had been the case since the back end of September. ADA/USDT was contained within this formation.  Given the noted heavy selling pressure that was seen across the market late Wednesday, the lower trend line of the wedge was forced to give way to sellers.

Looking to the downside, ADA/USDT has been saved from further declines thanks to a critical demand zone. The area is seen tracking from $0.07000 down to $0.06000. It has proven to see strong buyers swoop in. The price last traded down here between 12-18th September. Buyers kicked in to then drive ADA/USDT to the north, seeing gains just shy of some 50%. The bulls were able to run the price up to $0.09500 into a known supply area. A peak was seen, and this rally was then gradually sold.

Should the above-mentioned demand area fail to hold and see a daily close below, it could be catastrophic. A development such as described, could leave the door wide open to a fresh wave of heavy selling.

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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4.5 stars on average, based on 50 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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Analysis

Pre-Market Analysis And Chartbook: Markets Flat Ahead of Key Economic Data

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Wednesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,729 0.02%
DAX 30 11,467 -0.05%
WTI Crude Oil 56.16 1.59%
GOLD 1,202 -0.03%
Bitcoin 6,211 -0.80%
EUR/USD 1.1287 -0.01%

As traders awaited the key US economic releases of the week, the Consumer Price Index (CPI) and the Retail Sales report, financial markets were relatively quiet and flat before the Wall Street open, but things got volatile since then, despite the muted CPI reading. The progress in the Brexit negotiations and the liquidation event in crude oil were making headlines today, although the advance in the Pound stalled, as equity markets and in general risk assets are still under clear selling pressure following the turmoil in October. The second half of the week will likely see strong moves across asset classes, and given the negative technicals, odds favor a risk-off shift globally.

EUR/USD, 4-Hour Chart Analysis

The Dollar is consolidation after its move to new 16-months highs on Monday, and for now, the currency failed to confirm the break-out, at least as measured by the Dollar index. The EUR/USD is showing a slightly different picture compared to the broader measure, and the common currency is still in a steep downtrend, even as it is back near the key 1.13 level, retracing a large chunk of Monday’s move.

A durable recovery above 1.13 could signal a failed break-down and another consolidation phase in the pair, with the long-term momentum indicators still being oversold, but the broad downtrend is clearly intact, and long positions should only be considered as short-term trades.

Nasdaq 100 Futures, 4-Hour Chart Analysis

In equities, we continue to see bearish technicals from a broader perspective, and although the post-Fed selloff halted, for now, the re-test of the October lows still seems likely in the coming weeks. The Nasdaq is still relatively weak compared to the other major US benchmarks, and the tech benchmark is the closest to its lows, even after yesterday’s bounce.

The overnight session saw a slight bullish bias in stocks, with the indices holding on to above their weekly lows, but we still view the short-term rally attempts as selling opportunities given the hostile technicals across the globe.

Crude Oil in Turmoil as Copper Holds Support, For Now

WTI Crude Oil, 4-Hour Chart Analysis

The bounce that we have been expecting in crude oil didn’t materialize despite the deeply oversold momentum readings, as the dip below the $58-$60 zone triggered a liquidation event in the commodity. The worst day for oil in 3 years saw the WTI contract falling below $55 per barrel, its lowest level in a year. Today, oil is attempting a recovery, and we continue to expect a rally up to the $63-$65 zone in the coming weeks.

Copper Futures, 4-Hour Chart Analysis

Elsewhere in the commodity segment, we are seeing further signs of weakness, despite the pullback in the Dollar. Gold is having a flat quiet day, so far, hovering near the $1200 price level, while despite the renewed trade-deal optimism, copper failed to bounce higher substantially amid the slight risk-on shift. The industrial metal is trading just above its recent swing low, and a move below that would be a sign that the lengthy consolidation phase is ending and the broader downtrend is about to resume.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Featured image from 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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4.7 stars on average, based on 394 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

EOS Update: Preparing for a Big Bullish Move

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EOS has been stuck in a range since August 8, 2018. It’s been trading between $6.65 and $4.50 with a midpoint of $5.30. If you’re a day trader, the range is wide enough to exploit and generate serious profits. However, this is not the case for many retail investors who bought the bottom and are anticipating the next big rally. They’d want to know when EOS (EOS/USD) would make another substantial move.

The good news is we are certain that it’s soon, very likely within a month. The next question would be the direction. This is something we’ll never be 100% certain of. However, we looked at the charts and we’re confident that this move will usher in a new higher high.

In this article, we reveal how this coin is preparing for a big bullish move.

Unnerving Lack of Volatility

EOS has been slowly flatlining since September 2018. The trading range has become tighter and tighter with each passing week. You can see the almost non-existent volatility in the weekly RSI. The indicator has moved within a three-point range (42 – 45) in the last two months.

Weekly RSI range

In addition to the weekly RSI, the daily trading range has been suffocating. The last time Bollinger bands were this tight was about a year ago. It was at the point before EOS launched a massive bull run.

Daily Chart

Before you get excited, we have to be clear that narrow trading ranges do not necessarily foretell a bull run. However, it is a prelude to a big move. It is the proverbial calm before the storm. The storm, we believe, will nourish the bellies of starving bulls.

Alleviating Resistance to Support (RS) Flip

EOS has a diagonal trendline that cuts through both the bull and bear runs. The trendline started to exist on January 20, 2018 when it acted as resistance and prevented the market from going above $15.75. The first RS flip happened on April 24 when EOS breached resistance of $12.00. This helped the market climb to $23.029 on April 29.

The diagonal trendline continued to serve as a support for EOS until June 22 when the market breached support of $9.50. This effectively flipped the support into resistance. EOS worked very hard to take back the diagonal trendline but to no avail. As a result, the market dropped to lows of $4.1778.

Diagonal trendline

The price action described above illustrates the impact of this trendline. It provides massive resistance when the market is below it. On the other hand, it offers firm support when EOS traded above it. Thus, the market would have been in a bad shape now if bulls would not have put up a strong fight. Luckily, they did.

With a series of higher lows, bulls eventually flipped the resistance into support on September 27. They also completed the retest when EOS dropped to $5.0014 on October 11. This tells us that bulls are mobilizing. It looks like they are quietly and patiently accumulating at these levels.

Promising Inverted EOS Chart

If you’re having trouble believing that EOS is starting to look bullish, then allow us to present to you the inverted chart. One look and you’ll know that this chart is prime for massive shorting.

Inverted weekly chart

This inverted chart looks like it already topped out. It tried really hard to take out resistance of $3.50 but it failed again and again. Its inability to breach the resistance led to exhaustion. You can see the rally fading in the declining volume. The market persistently rose even if volume steadily decreased. This is not a sustainable ascent.

As a result, the market appears to have broken down of an ascending triangle pattern. It is currently retesting the resistance but without volume, it is likely that the market will resume its descent. When it does, EOS will make its big move.

Bottom Line

With volatility almost non-existent, EOS appears to be preparing for a massive move. While this is something we are certain of, the direction is still not guaranteed. However, the recent RS flip of the diagonal downtrend and the inverted weekly chart make us believe that EOS is gearing up for a big bullish move.

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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3.7 stars on average, based on 269 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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