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Analysis

Long-Term Cryptocurrency Update: Bitcoin, Ethereum, Ripple, Litecoin, and Dash

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The crypto-correction continues in earnest this weekend, with Bitcoin leading the way lower this time around, “catching up” with our previous roadmap for the correction. The most valuable coin is testing the developing long-term base formation after spiking below the $2000 level earlier on today.

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BTC/USD Daily Chart Analysis

The other majors are following BTC lower, although Ethereum held above its prior low so far, together with the majority of the smaller coins. The long-term charts are getting oversold after the broad and deep correction, and sentiment is starting to get gloomy enough for a long-term bottom. While the short-term trends are clearly negative and the Judgement Day of Bitcoin is still looming, this is already a much better time to buy for the long run than one month ago when we warned about the overbought condition. Let’s take a step back again this weekend and see how the other majors are holding up on the long-term charts.

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Ethereum

ETH/USD Daily Chart Analysis

Ethereum bounced off its previous low once again today, and it still trades above the key $175 level. The short-term trend is still negative despite the recent bounce, but the long-term MACD is getting oversold after the one-month correction. The ETH token has already declined by 60%, and long-term investors are advised to add to their position here.

Litecoin

LTC/USD Daily Chart Analysis

Litecoin failed to test the $58-$60 range projection target this week, and it is dragged lower this weekend by the broad correction. The bearish divergence on the long-term MACD led to a correction back to the $40 level, but so far, the previous support levels are holding up well, in line with the relative strength that the coin has been showing. We still expect more sideways action before a move higher, as the long-term trendline has been broken.

Ripple

XRP/USDT Daily Chart Analysis

Ripple is still stuck in its long-term consolidation pattern since mid-May, but it’s holding above the forming base pattern, despite the recent sell-off.  The long-term technical picture remains unchanged and we still advise short-term traders to wait with new positions, while long-term investors could still add to their positions here. If the coin holds above the 0.175 level that could be a bullish short-term sign, and a good long-term entry point.

Dash

DASH/USD Daily Chart Analysis

Dash has been weaker this week than we expected, as the broad correction pushed the coin back towards its prior high at $150, although another rally attempt seemed likely. The coin missed our final long-term target for the breakout, but it remains inside the rising trend, as it is testing the lows from late June. With the MACD already in neutral territory, we remain bullish on the coin, especially as the other majors are nearing oversold momentum readings.

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)”

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3 Comments

3 Comments

  1. ddolberger

    July 16, 2017 at 5:07 am

    “The coin missed our final long-term target for the breakout”
    – Excuse me? I think you’re the one who missed. not the coin.

  2. OscarTango

    July 16, 2017 at 8:58 am

    it’s all dropping so fast that newly posted articles are behind in a matter of hours…. and 1st of August is still a long way away.

  3. RealCryptoW

    July 16, 2017 at 12:26 pm

    I do read all articles here on hacked.com and so many times disagree with these analyzes. You are analysing crypto based on forex logic. This is diferent world, there are no base lines. Everything is based in momentum and mood overall in markets. Bitcoin is the daddy and BTC moves all the rest of alt coins. I know what I’m talking about, I’ve made big money in crypto. And I agree with Oscar tango, let’s wait till August 1st. Then we will se where the prices are on what support it will be sitting, then it will be a little bit easier to see. I wouldn’t even try to guess alt coin prices everything will depend how hard BTC will fall. And yes it is falling like a stone from the sky at the moment. Possible that we are just in the middle of panic stage. Everyone are trying to cash out their profits. So no analyzes will work at this stage. All I recomend is cash out and wait. When I said to my friends in crypto to cash out when BTC was 2700, everyone was laughing at me. Well I did what I have told them. And did the right thing. Problem is that it is too many newbies and everyone things that crypto can’t have falls. Yes it can. And have seen quite few of them. With experience you will understand crypto better. Because crypto is totaly diferent from trading forex.

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Analysis

Bitcoin’s Record-Breaking Rally Continues as Prices Cross $8,100

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Bitcoin surged to new highs on Sunday, as the world’s largest crypto by market cap continued to generate bids following the cancellation of Segwit2x.

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BTC/USD Price Levels

The value of a single bitcoin reached a daily high of $8,110.59, its best level on record. At press time, BTC/USD was valued at around $8,002 for a gain of 4%.

With the gain, bitcoin’s market cap now exceeds $133 billion. That’s roughly $100 billion greater than Ethereum, the market’s second most valuable cryptocurrency.

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Bitcoin has added more than $1,100 over the past five sessions. It was down around $5,600 just one week ago.

Bitcoin Cash (BCH), a digital currency alternative that broke away from the original blockchain Aug. 1, was down 5.1% at $1,185. BTC and BCH locked horns earlier this month after the Segwit2x hard fork was abandoned.

$10,000 and Beyond?

Institutional clearing platform LedgerX has initiated its first long-term bitcoin futures option, which is set to expire Dec. 28, 2018. In setting up the option, LedgerX is assuming a price of $10,000 at the time of expiration. That’s a 25% premium on current levels.

Investors who buy the option are essentially saying they believe prices will exceed $10,000 by the time of expiration.

Bitcoin is being helped by growing institutional demand for the digital currency, as hedge funds, day traders and other mainstream investment outfits look to access this burgeoning asset class. CBOE and CME Group have each announced plans to integrate bitcoin into more conventional investment vehicles in the coming months.

The rush of institutional money into bitcoin is a sure sign that the digital asset class is becoming too big to ignore. The value of all cryptocurrencies in circulation has already exceeded $230 billion, with more than a dozen coins valued at $1 billion or more. Nine others have a market cap of $500 million or greater.

Coinbase Responds

The rise of institutional capital has also compelled Coinbase to introduce a custodial service targeted at account holders with more than $10 million in assets. This service targets hedge funds and other institutions that have remained largely on the sidelines of the crypto revolution.

In a recent blog post, Coinbase CEO Brian Armstrong announced that the new service will launch sometime next year.

“When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely,” Armstrong wrote.

In addition to maintaining the minimum $10 million asset requirement, institutions must pay a $100,000 setup fee to gain access tot he Custodial program. In response, institutional investors will receive assurance that their assets are secure.

The Coinbase Custody website lists broad support for bitcoin, Ethereum (ETH) and Litecoin (LTC), as well as ERC20 tokens. The ERC20 protocol has emerged as the favorite for startups launching initial coin offerings (ICOs), a controversial crowdfunding model that has already overtaken early stage venture capital.

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.

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Cryptocurrencies

Is Ethereum Ready to Play Catch Up With Bitcoin?

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In mid-June of this year, the difference between the market capitalization of bitcoin and Ethereum had narrowed down to less than $8 billion. This had many market participants excited. They expected Ethereum to dethrone bitcoin as the leader, a move popularly termed as flippening.

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Key observations

  1. Ethereum has hugely underperformed bitcoin
  2. The chart pattern suggests that Ethereum is likely to play catch up in the next few months
  3. Stay on the long side of Ethereum to benefit from the bullish setup

However, fast forward five months and the difference in the market capitalization of the top two cryptocurrencies has increased to about $96 billion. This shows that while bitcoin has raced ahead in the past few months, Ethereum has hugely lagged behind.

However, is the underperformance about to end?

The chart pattern shows that Ethereum is likely to embark on a rally of its own that can carry it to $645 to $670 levels in the next few months. Let’s see how we arrived at these levels.

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Ethereum opened trading at $8.16 on January 1, 2017. It started its rally in March and by June 12, it reached a high of $420, an astronomical rally of about 5047%. Thereafter, it entered a period of consolidation, digesting the gains.

On the charts, Ethereum has formed a large symmetrical triangle, which usually acts as a continuation pattern. The breakout is generally in the direction of the long-term trend, or the trend that was prevailing before the pattern formed. In this case, the sharp move from January to June confirms that the cryptocurrency was in an uptrend before forming the triangle.

However, this is not a fool proof trade because sometimes the symmetrical triangle acts as a reversal pattern. Therefore, the best way to play this trade is to wait for a breakout of the triangle before initiating any trade.

Where can we take an entry?

Currently, the resistance line of the triangle is at about $378 levels, a level close to today’s intraday highs. The bears are likely to strongly defend this level. However, if the bulls breakout of $378 and manage to close above the resistance line, the trade on the long side will set up.

Different traders use different methods to confirm whether the breakout is valid or not. Some wait until price moves 3% above the breakout level, others wait for three consecutive closes above the resistance level.

However, we have observed that the best breakouts never look back, hence, waiting for three days may lead to a missed opportunity. Therefore, we can wait for a closing above the resistance line of the triangle and initiate the long positions on the following day.

The breakout can face resistance at $400 and $420. However, we expect the virtual currency to scale both these resistances and rally towards its pattern target zone of $645 to $670.

Notwithstanding, even the most reliable patterns can fail. Therefore, our stop loss will be kept at $340. We don’t want to hang on to the trade if it falls back into the triangle. We shall raise our stops to breakeven as soon as Ethereum breaks out to new lifetime highs. From thereon, we shall trail the stops higher to protect our paper profits.

Note

The chart pattern suggests a resumption of the long-term uptrend in Ethereum. However, this will not get confirmed until the cryptocurrency breaks out and sustains above $380. Therefore, please initiate positions only on a breakout and close above the triangle. Entering presumptive trades may result in losses.

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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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