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Analysis: Monday Morning Massacre for Ethereum

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Bitcoin

Bitcoin finally succumbed to the selling pressure we have been forecasting for the past few days.  All things considered, the selling has been muted and reasonable, far more so than I expected.   This sentiment may be premature of course.  There could be another shoe waiting to drop.  But I note that a 5th arc on a 15 minute chart has (so far) stopped the decline, so I lost my bearishness  at the arc. I sent a tweet at the time.

Ethereum

Editor’s update: Ethereum’s flash crash only happened at “Kraken” due to a DDoS-attack.

Ethereum was a massacre.  The selling took out every leveraged trader I am sure.  Prices took a nosedive to $30 in a manner I briefly described in yesterday’s column. Short-selling, stop-running, margin calls and panic crushed a lot of people. I hope my leveraged readers were smart enough to take my advice and lighten their leveraged positions yesterday.  If not, they saw their dreams dashed a few minutes ago.

I believe the low is in at $30, but there could be another show left to drop.  It seems unlikely though, because the margin calls have already closed everyone out and the stops are cleared also.

Litecoin

Litecoin hit our target of $30 and has sold off a bit since then.  Given the selling going on today, it may still correct pretty hard as well.  Beware…

ETCUSD

We suggested that ETC might correct to the $5.50 area. At this writing we have a low of $5.17.  It seems like a low might be in, but it is hard to say.  The bears are in full control this morning in a coordinated attack across the spectrum.   It’s hard to say where any of it will end.

Overall, it’s a good morning to be either  in cash, or short.  There will be some great buying opportunities soon, but be careful!

 

 

Remember:  The author is a trader who is subject to all manner of error in judgment.  Do your own research, and be prepared to take full responsibility for your own trades.

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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5 stars on average, based on 2 rated postsJim has an MBA from the University of Southern California. He has had a long career in both Corporate Finance and IT. Along the way he discovered that trading was a vehicle with great promise, but struggled for a long time without a mentor. After having been knocked down many times and having struggled to get back up, he had an epiphany and realized that geometry was a solution. He shares his experience here. If you do well as a result of suggestions made here, feel free to say thank you :) BTC: 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya Follow him on Twitter (@jimfred1276) or email him at jimfred1276 at gmail.




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30 Comments

30 Comments

  1. eko6321

    May 8, 2017 at 6:38 am

    Hello Jim

    What happen to ethereum last night it was scary I be honest. Do you think can we hold ethereum or we sell.
    Or where we setup trailing stop limit.

    Please advice

    • Jim Fredrickson

      May 8, 2017 at 7:27 am

      I don’t like anwering such questions because I don’t know your situation. It WAS scary, but imho the selling is over for now. Me? I would hold here…

  2. [email protected]

    May 8, 2017 at 6:59 am

    Hi Jim, I can see ETH is around $90 on GDaX and Coinbase and BTC near $ 1650. Which exchange you are referring for the prices?
    Also, I am heavily invested in LTC. Should I exit since it’s near$28.9 now?

    • Jim Fredrickson

      May 8, 2017 at 7:40 am

      I use kraken. My prices are the ones that exchange registers. LTC is still a good asset, imho…

  3. jedadoo

    May 8, 2017 at 7:14 am

    I’m a bit confused. Eth holding at $90+. I see some comments on polo about kraken being hacked. I pulled my Eth to a local wallet to prevent myself from selling it quickly 🙂

  4. iamniks

    May 8, 2017 at 7:14 am

    Any thoughts on XRP?

    • jedadoo

      May 8, 2017 at 7:15 am

      He gave some a few days ago, saying ti may triple this summer. Looks like it may sooner than that… I’d be interested in STR. Had a HUGE day at polo. Didn’t get in, but thoughts would be good.

      • iamniks

        May 8, 2017 at 7:16 am

        As I remember the goal was 0.2 which was today in the night:)

  5. Gabriel

    May 8, 2017 at 7:28 am

    Each exchange has different prices, because different people agree on different prices, depending where they trade. This leads to certain arbitrage opportunities. The prices seem to be mostly from Kraken aren’t they?
    My personal opinion is that it is best to invest broadly, and buy each coin after much research, to see if you would still be happy holding it one year from now (you may like the tech, etc.). That way you will benefit from the global rise of the crypto markets. Trying to always chase the fastest horse and switching all the time is too stressful, and also makes it hard to track your results.

  6. foryou

    May 8, 2017 at 8:39 am

    Hy, Jim,

    Seeing the ETH scary situation yesterday, I sold my holdings because it was well over my cost! I mostly do short term trading so that way it works for me.

    1. ” why do not you cover other potential AltCoins like Strat, Pink, SYS, Factom, …etc ? ” May be you do not want to confuse your followers but it would be much appreciated if I get to read on them as well. I see that there lots of money in these coins. I saw someone asking this in a comment under a recent post you made but you did not reply that!

    2. Any buy signal for now would be helpful.

    Will appreciate your reply on this.

    I have recently subscribed to your recommendations, it has been a good experience so far.

    Thanks 🙂

    • Jim Fredrickson

      May 8, 2017 at 11:56 pm

      Hi, I am stretched thin trying to cover the few coins I actively cover already. Also, I trade on Kraken so charts on kraken are the ones I most easily see. Which exchange lists those coins? I will look into it.

      • foryou

        May 9, 2017 at 12:25 pm

        Poloniex. Do have a look, covering around 10 coins would be good. I have been closely watching them and made good money too. Your expert advice would always be helpful for everyone here. Thanks

  7. amirheavy666

    May 8, 2017 at 9:05 am

    AND Abour XRP what happen now 0.18 goto 0.25????

    • Jim Fredrickson

      May 8, 2017 at 4:27 pm

      .25 was our target, but i didn’t expect to get there for another month. amazing.

  8. excesstomcat1

    May 8, 2017 at 9:05 am

    Can you please go into more detail about when to potentially sell Ethereum? Also what did you mean by ETH dropped to $30? I did not see that on coinbase.

    • Jim Fredrickson

      May 8, 2017 at 11:01 am

      Apparently, this massacre was limited to Kraken. This is the exchange I trade on and monitor, so I did not realize this aberration occurred on a smaller scale. I am surprised that arbitrage did not arrest this massacre, if it was not happening elsewhere at the same time – but there it is.

      • ryepdx

        May 8, 2017 at 8:27 pm

        Poloniex was also down during the Kraken DDOS, which probably hindered arbitrage. This was pretty clear market manipulation.

  9. thoth

    May 8, 2017 at 9:41 am

    “We suggested that ETH might correct to the $5.50 area. At this writing we have a low of $5.17. It seems like a low might be in, but it is hard to say.”

    You mean ETC?

    • Jim Fredrickson

      May 8, 2017 at 11:02 am

      Yes, thank you for correcting my error.

  10. thoth

    May 8, 2017 at 10:16 am

    And those ETH sells on Kraken looks like fat fingers, nowhere else went near that low in USD

    • Jim Fredrickson

      May 8, 2017 at 11:04 am

      Could have been, but it does not matter if it was fat fingers or thin. The result is the same.

  11. titaniumdave

    May 8, 2017 at 11:49 am

    KRAKEN froze yeserday. Volume dried up during the freeze, dropping price and triggering calls. The drop in price of ETH had nothing to do with actual market sentiment and everything to do with their glitch, which is why it was localized to Kraken and didn’t occur on any other exchanges. ETH sentiment is still strong.

    • Jim Fredrickson

      May 8, 2017 at 3:35 pm

      That’s quite relevant information from a technology point of view. But from a traders point of view, it is irrelevant what caused such a price fluctuation. I write this column from a trader’s point of view, to help traders.

      • Joshnj82

        May 9, 2017 at 9:24 am

        The massacre began around 6:00p EST with a large sell order dropping ETH price on Kraken. Sh-t really hit the fan as the market went down from a DDoS attack and traders were unable to manage their positions causing plenty of liquidations and triggered SL’s. The selloff was seen across all markets but the bottom was significantly lower on Kraken.

        • Jim Fredrickson

          May 9, 2017 at 10:28 pm

          That is interesting, from an intellectual point of view. But I don’t buy DDoS as a “reason”, since the damage was limited pretty much to ETH (that day). It was chart-specific. Anyways, speaking for myself, as a trader, I don’t care all that much about “why” a chart makes a significant move. I mean, does it really matter? Not to me. There are million pieces of news events every day. Some bullish, some bearish. The charts give warnings of danger in advance, most of the time. I will likely address this issue in my next column. Thank you…

          • Joshnj82

            May 9, 2017 at 11:59 pm

            I mentioned the DDos attack in regards to losses and liquidations on Kraken only. I agree with your overall statement and wasn’t trying to speculate with a broad brush. I believe ETH bottomed at $26 on Kraken vs ~mid 70s elsewhere. To your point, the “why’s” are besides the point

  12. octave

    May 8, 2017 at 3:29 pm

    Are you on drugs? Many mistakes in this article

  13. And

    May 8, 2017 at 8:54 pm

    Jim, do not pay any attention to inappropriate comments. Your articles are simply fantastic! Thank you Jim!

  14. [email protected]

    May 8, 2017 at 9:02 pm

    I always follow and appreciate your suggestions. But always check few basics before actions. Mistakes happens but you are quick to rectify and update on twitter.

    Keep up the good work Jim. Thanks again.

  15. jedadoo

    May 8, 2017 at 10:03 pm

    Should rename this to “Monday Afternoon Ripple Massacre” — nearly 40% drop in mere minutes.

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Altcoins

Bitcoin Cash Price Analysis: BCH/USD Bulls Have the Potential to Capitalize, Following a Bullish Technical Set Up

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  • BCH/USD broke out and retested a long-running descending trend line, but has failed to capitalize on this further.
  • George Hotz, also known as Geohot, says “Bitcoin Cash is the real Bitcoin.”
  • CoinText.io expands its Bitcoin Cash payment SMS service to Brazil and further European countries. 

“Bitcoin Cash is the Real Bitcoin”

George Hotz, also known as Geohot, an American entrepreneur and hacker, was recently commenting on Bitcoin Cash. Following the BCH Devcon in San Francisco he attended, Geohot demonstrated how to generate a BCH private key from scratch using python coding.

During his python video, George spoke highly of Bitcoin Cash. He said, “I’m using Bitcoin Cash because it’s the real bitcoin.” His reasoning for the preference of BCH over BTC was due to it having significantly lower transaction fees. Stating, “Transaction fees are super low on bitcoin cash.”

Bitcoin Cash Being Used in Brazil with CoinText.io

SMS cryptocurrency payment service, CoinText, has launched their services in Brazil and three other European countries – Poland, Romania and Croatia. CoinText doesn’t require apps, logins or Internet, and users can send Bitcoin Cash via SMS. A new wallet is automatically created when people have received Bitcoin Cash via SMS.

Specifically commenting on the Brazilian expansion, CoinText founder and CTO said, “Brazilians have been suffering from corruption and bad monetary policy,” says CoinText founder and CTO Vin Armani. “Cryptocurrency offers a way for them to peacefully opt out of a corrupt system.”

A move in which is further helping the adoption of Bitcoin Cash, via the CoinText service, he further noted, “Adding Poland, Croatia and Romania brings us closer to connecting the entire continent of Europe,” Armani added. “CoinText’s end-of-year goal is to enable all 740 million European residents to text money to each other’s phones for pennies.”

Technical Review – Daily Chart

BCH/USD daily chart

BCH/USD price action of late has been very much mundane following a promising breakout from a long-running descending trend line. It had been contained below and rejected on several occasions, from the back end of July. Bulls managed to pull off a decent breakout to the upside, which took place between 26-27th September.

After observing the break above, then pullback for a retest of the breached trend line, it looked very promising. This as such played out to the textbook, however bulls failed to capitalize and drive further north. Instead, the price remained within a consolidation nature, a lack of commitment in either direction. Perhaps the bulls are sitting on the launchpad, ready to send this into orbit, time will tell here.

Looking at technical areas of interest, to the upside, resistance has capped upside well into $500 territory. Tracking from $455-80, which has been evident the past few sessions. A firm push higher, will allow $550 region to come back into play. In terms of buyers, they can be found from the current price, all the way down to $400 the round figure.

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 33 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

Crypto Update: Coins Turn Lower After Choppy Weekend

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The major cryptocurrencies are slightly lower today in early trading, as Sunday’s modest rally faded away without major technical progress. Most of the coins are stuck in narrow trading ranges, and last week’s spike well above the current price levels, as buyers failed to take control of the market.

That said, we haven’t seen strong negative momentum either, and although the bearish long-term setups remain intact, there is no immediate danger of new bear market lows in the segment.

Patience is still the name of the game for crypto investors, since there is no evidence of a broader trend change that would justify a more constructive investment position. Our trend model is on sell signals across the board on both time frames, and the bearish pressures are still apparent on the charts, even considering the lengthy consolidation period. Given the negative long-term trends, odds still favor a test of the lows in most case, particularly in the light of the lack of bullish leadership.

IOTA/USD, 4-Hour Chart Analysis

While most of the majors are still above the lows hit just before the Tether-turmoil, there are several relatively weak coins that could lead the market lower in the coming weeks. Especially Ethereum, Liteocin, Dash, and EOS point a negative picture of the market, while Ripple and Bitcoin are still the most encouraging form a bullish standpoint, even as they also failed to signs of bullish momentum.


BTC/USD, 4-Hour Chart Analysis

Bitcoin is back near the $6400 level today, after drifting towards the $6500 resistance during yesterday’s rally,  but the coin is still well clear of the $6275 support level, trading clearly within last Monday’s range. Our trend model continues to be on a short-term sell signal, while the long-term picture is still neutral for the largest digital currency.

Traders and investors still shouldn’t enter positions here with further resistance levels ahead near $6750 and $7000 and with support levels below $6275 found near $6000, $5850 and between $5000 and $5100.

Altcoins Slightly Lower as Stellar Fails to Break Out

XRP/USD, 4-Hour Chart Analysis

Ripple and Stellar have been showing some positive signs last week, but they both failed to make significant technical progress, confirming the segment-wide selling pressure. Ripple is threatening to move below the $0.42-$0.46 level, despite the rally above its triangle consolidation pattern, and a break below $0.42 would likely trigger a test of the $0.355 support.

For now, the short-term sell signal remains in place due to the lack of follow-through, and traders should be cautious with new positions. Strong resistance is still ahead at $0.51, $0.54, $0.57, while further, weak support is found near $0.375.

Stellar/USD, 4-Hour Chart Analysis

Stellar is trading very close to the key long-term support zone near $0.24 that has been dominating trading for several weeks, and despite the rally attempts, the coin is still not out of its bear market. That said, should a broader trend change occur, Stellar would likely be among the leaders of renewed advance, but for now, traders and investors should still stay away from the coin.

The declining long-term trend is intact, with strong resistance levels ahead near $0.265 and $0.2835, while support levels are found near $0.235, $0.21, and $0.1935.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still stuck in a very narrow range after the weekend, with the $200 support/resistance level still being in the center of attention. The bearish broader setup is unchanged in ETH’s market, with the coin still being relatively weak among the majors.

Traders and investors shouldn’t open new positions her, with further support found near $180, $170, and $160, and with strong resistance zones ahead near $235 and $260.

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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4.6 stars on average, based on 380 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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Litecoin Price Analysis: LTC/USD Developers to Slash Transaction Cost, with Upcoming Core Update

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  • Litecoin fees are set to be largely reduced in the forthcoming upgrade, in an attempt to boost adoption.
  • LTC/USD remains heavily dictated by triangular pattern, behavior suggests a breakout is imminent. 

Litecoin Fees to lower by 10x in next Core Release

The Litecoin foundation will be updating the Litecoin protocol to version 0.17, following an announcement via Twitter. This update will ultimately reduce the network’s fees drastically compared to its already nominal costs.

It is reported that with this upcoming upgrade, the network fee will go down to $0.005. Their goal is to encourage greater adoption of Litecoin. Currently, the average transaction fee is floating around $0.05. Bitcoin’s transaction fee is currently seen around $0.10.

At the back end of 2017, a large bull market was observed. Bitcoin prices were up at heights around $20,000. Users as an alternative started to use LTC, given its inexpensive nature, in comparison to Bitcoin. It is interesting to note also that Bitcoin transactions were as much as $55 during those highs. However, Litecoin remained by far competitive, facilitating lower transaction fees, less than $1. During the peak, LTC fees reached $1.5.

Litecoin’s Core lead developer, Adrian Gallagher, was commenting on the upgrade intentions, saying: “To encourage more adoption and usage of Litecoin, I think lowering the fees are a good thing. We’re not even close to block limits and the block size on disk is pretty small (20GB) relative to other coins. Technically people can already adjust their fees right now to the one above, because of the more relaxed min relay/dust relay fee.”

Elsewhere, he was speaking about the current market conditions, believing that the bear market being observed, will not last. Predicting that in the next three to six months, prices could start to rise again. He stated: “With lower fees, it would be possible to lay down the foundation for a fee rate, that can grow proactively rather than re-actively.”

Technical Review – Daily Chart

LTC/USD daily chart

Looking via the daily time frame, LTC/USD price action remains trapped and dictated by a triangular pattern. This is seen across several of the other cryptocurrencies. The calls of an imminent breakout make much sense, with this type of price behavior seen.

Over the past few days, upside has been capped around the $55 mark. Further north, resistance is seen at the $56.50-60, the upper part of the triangular pattern formation. A breakout higher should allow a run well into the $60 territory. Testing the 27th September high ($65.85) would be probable. Supply is seen running from that high up until $70, where the price faltered on 4th September.

In terms of support, $53 has proven to be an area of comfort, over the last five sessions. The lower trend line of the above-mentioned pattern is seen tracking at $51.50. Finally, a demand zone is seen just below running from the big $50 mark, down to $0.47.

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 33 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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