The majors and the smaller coins are still mostly in a corrective phase after the late-spring spectacular rally that was led by Ethereum, but also boosted by Bitcoins relentless rise to all-time highs. The several 100% moves needed to be corrected, and as we wrote two weeks ago in our previous long-term outlook on Bitcoin:
“Is this the best time to buy Bitcoin for the long run? Probably not, even if the fundamentals are there, and it will most likely rise much further than the current levels. So, why it is not a good idea to buy it? Because, a 30%-40%-50% correction, that has been normal for Bitcoin in the past, is a huge psychological burden that makes a panic sale likely, usually just before the bottom. Because of this, it is better to wait for the correction and oversold readings, even if you will buy it at a higher price later on.”
Since then we had a swift 30% correction in the majors that gave a good buying opportunity to investors, but the quick snapback rally meant that the overbought readings haven’t cleared on the charts of BTC and ETH. Ripple and LTC were in a different phase two weeks ago, and Litecoin proved its strength as we expected by a break-out. Ripple attempted a move but so far it was held back by overhead resistance.
Daily Chart of BTC/USD
Bitcoin has cleared a part of its overbought state since hitting a high near $3000, but usually, BTC corrects in a more complex way after a huge rally, as you can see with the example of the March correction (we noted a possible trajectory for the correction). We expect more corrective action in the coming period that might provide more great buying opportunities for long-term investors. We still think that short-term BTC is vulnerable, and a re-test of the previous short-term low is possible. A move about $2800, on the other hand, would trigger a new buy signal.
Daily Chart of ETH/USD
ETH is still in a similar technical position to Bitcoin, being in a clear corrective phase after the monster rally. We expect more consolidation in the coming period, with a possible move back to the $250-$270 range that supported the coin during the previous move lower. ETH is still well inside the strongly rising trend, which converges with the support range in about a week, providing an ideal target for the correction.
Daily Chart of LTC/USD
We wrote two weeks ago that:
Litecoin’s chart is looking promising from a long-term perspective, as LTC is after a lengthy and deep (-55%, after 1000% of gains in 5 weeks) correction, while several signs point to a bullish turning point. (…)While it is entirely possible that LTC will consolidate more if Bitcoin enters a correction, it will likely outperform both BTC and ETH in the coming weeks.
The chart now is out of the buy-zone as the MACD is already overbought, but the break-out move is still intact, and another move higher, possibly towards the range-extension target at $60, is in the cards, new positions are riskier here than previously. The long-term rising trend is intact and we advise investors to hold on to their core positions.
Daily Chart of XRP/USD
Ripple has lagged Litecoin and failed to produce a sustained break-out so far after its lengthy consolidation period. The MACD indicator is still in neutral territory, but it hasn’t given a clear long-term buy signal yet. Long-term investors could still add to their existing XRP positions here, while short-term traders could try to buy the break-out attempts, as they provide a good profit/risk ratio thanks to the long-term picture.
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 are 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)”
Bitcoin Cash Spikes on South Korean Volume
Bitcoin cash (BCH) resumed its uptrend Friday following a sudden spike in South Korean trade volumes. Recent activity in the Asian country suggests that the bitcoin alternative could gain more exposure in the short term.
BCH/USD Price Levels
The BCH/USD exchange rate surged above $1,750 on Thursady, where it was still some $800 shy of the all-time high. Prices would later consolidate below $1,700 as markets paced the gains. At press time, BCH/USD was up 6.6% at $1,662.
With the recent gain, bitcoin cash is worth a combined $28.4 billion, according to CoinMarketCap. That puts it third among active cryptos, behind online bitcoin and Ethereum.
Thursday was bitcoin cash’s second major spike of the month, with more traders backing the alternative blockchain. After months of futility, BCH caught fire in mid-November after the backers of Segwit2x abandoned their planned hard fork. Following an initial spike, bitcoin (BTC/USD) declined sharply.
The complete opposite has occurred in recent weeks, with bitcoin cash tempering its advance and BTC adding thousands en route to multiple record highs. The original bitcoin was down more than $110 on Friday, but continued to trade well north of $8,000.
BCH has put up strong gains in recent weeks, a clear sign that the market has moved to a higher base. The cryptocurrency struggled to make a name for itself after it broke away from the original blockchain on Aug. 1. Based on the latest price action, BCH is making the case for a return to $2,000.
South Korea Factor
Trading activity in South Korea continues to be at the center of bitcoin cash’s rally. The Asian country has emerged as a major player in the global cryptocurrency market, with investors there showing a greater propensity to adopt altcoins.
On Thursday, the country’s Financial Supervisory Service (FSS) said it had “no plans” to monitor the cryptocurrency space because it believes the digital tokens do not represent real money.
“Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges,” said Choe Heung-sik, the agency’s chief. “Supervision will come only after the legal recognition of digital tokens as a legitimate currency.”
Positive vibes from South Korea may be partially responsible for the huge upswing in trading volumes tied to BCH. Trading volume in the cryptocurrency has risen above $4.1 billion in the past 24 hours, according to CoinMarketCap. That’s the highest level in nearly two weeks.
Bitcoin cash is also benefiting from Bitstamp’s decision to integrate the cryptocurrency next month “in response to the demand.”Bitstamp is the world’s twelfth largest digital currency exchange, according to Business Insider.
Separately, digital wallet provider Bitwala announced plans to integrate BCH into its platform, a clear sign that the token was gaining wider acceptance. The platform, which has more than 57,000 users, said it will now facilitate storage of BCH as well as money transfers. The team also said it is working hard to integrate mobile BCH wallets in the near term.
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.
Technical Analysis: Litecoin and Ethereum on the Move as Rotation Continues
The altcoin bull run continued today despite the US Thanksgiving holiday, as trading remained active in the majors, and another important break-out occurred, this time in Ethereum. Litecoin is also strong today, and the coin is testing the key $75 resistance level, as it follows in the track of ETH again. The currency still looks set to hit the next target at $82.50, with the all-time highs below just below the $100 level also in sight. While the long-term momentum is edging towards overbought territory, the coin remains bullish on both time-frames, with strong support still found at $64 and $56.
LTC/USD, 4-Hour Chart Analysis
Ethereum scored a new record high after moving past $400 for the first time in five months, and considering the lengthy consolidation before the move, more upside is likely for the second largest coin. With the long-term momentum still not being overbought, the token’s price might test the $500 mark in this leg higher, with Fibonacci targets ahead at $475 and $512. Support levels are found below $400 at 4380 and $350.
ETH/USD, 4-Hour Chart Analysis
Ripple is also attempting another bullish move, while Monero and Dash are consolidating just below their recent highs, while IOTA is in a short-term correction pattern as well. More and more altcoins are now in the latter phases of their rallies, just like Bitcoin, but traders still have opportunities with favorable risk-rewards ratios. Let’ see the short-term charts.
Break-Out: Another Crazy Rally in Ethereum?
What crazy rally you might ask? Bitcoin is the star, right? Everything was about BTC (and BCH) in the last few months, and lots of traders forget the gains that ETH posted amid the take-off of the ICO Rocket during the spring.
Comparing ETH and BTC in 2017
By the numbers, out of the two largest coins, 2017 is still the year of Ethereum as the 3600% rise in the token’s price dwarfs Bitcoin’s impressive 630% gain. Could Ethereum be on the verge of another epic surge? Before answering that question, first let’s see what happened with the coin in recent months.
How Did We Get Here?
ETH/USD, Daily Chart Analysis
Ethereum finally broke above the magical $400 barrier that has kept a lid on the token’s price for five months after the crazy run-up in May. What first followed after that stellar move, was a 70% decline top-to-bottom, with a flush-out panic low in July.
Our trend model turned long-term positive even before the spike lower, but since then, the coin only managed to get close to the all-time highs, while Bitcoin eclipsed the previous star with its dominant performance. Now the tide might be turning, as ETH is finally gathering bullish momentum and today it breached the $400 mark, flirting with a break-out from the giant triangle consolidation pattern.
- Bitcoin Cash Spikes on South Korean Volume November 24, 2017
- Retailers Looking to Cash In on U.S. Black Friday November 24, 2017
- South Korea to Remain Laissez Faire on Bitcoin, According to FSS November 24, 2017
- Still Monitoring my Trading Bots November 23, 2017
- Technical Analysis: Litecoin and Ethereum on the Move as Rotation Continues November 23, 2017
- Break-Out: Another Crazy Rally in Ethereum? November 23, 2017
- Zcash Dip Offers Chance to Buy November 23, 2017
- Trade Recommendation: Qtum November 23, 2017
- Trade Recommendation: Monaco November 23, 2017
- Why We’re Not Drowning in Cash? November 23, 2017
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