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Short Positions on Ethereum Reach All-Time High on Bitfinex

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Ether’s price held near 12-month lows on Saturday, just one day after bets against the virtual currency spiked to all-time highs on Bitfinex.

ETH/USD Price Update

Ethereum traded within a narrow range on Saturday and was last seen hovering near $216.00 on Bitfinex. The digital currency is considered severely oversold according to the relative strength index (RSI).

The ether price has declined 25% over the past week and is down a staggering 40% compared with 30 days ago, according to Ethlorer.io. At current values, ether has a total market capitalization of $22 billion. Daily trade volumes in ETH amounted to $1.3 billion.

Losses have extended far beyond ether to include ERC-20 tokens, which represent a large contingency of digital assets. Among the top-20 ERC-20 tokens, 18 have reported double-digit losses over the past seven days.

At the time of writing, the combined value of all digital currencies in circulation was $202.8 billion, little changed from the previous close. Overall trade volumes were just under $10.3 billion, according to CoinMarketCap.

Short Positions Rise

The number of bets placed against Ethereum surged to all-time highs on Friday, with Bitfinex reporting a total of 208,689 short positions. That surpassed the previous record of around 203,000. Bitfinex is the fifth largest digital currency exchange based on adjusted 30-day volume, according to CoinMarketCap.

The rout of Ethereum has been accompanied by a rapid selloff of ERC-20 tokens, fueling concerns that initial coin offerings (ICOs) are cashing out. ICOs using the Ethereum blockchain are considered one of the main catalysts for ether’s record-setting rally last year. Now, they are being blamed for its decline. While ICO cash-outs are part of the problem, crypto startups simply haven’t sold enough ether to justify the coin’s recent declines. This is further corroborated by the latest compilation of ETH Spend data courtesy of Santiment.

Bitcoin’s rising star in the eyes of remaining crypto traders has also negatively influenced ether’s price. Bitcoin now represents nearly 55% of the entire cryptocurrency market capitalization, the highest since December. As Hacked previously reported, traders appear to be disavowing alternative assets for the perceived safety and stability of BTC.

Ether has also been disproportionately affected by negative speculation concerning scalability and economic abstraction. This came to a head earlier this month when Jeremy Rubin, an influential cryptcocurrency entrepreneur, penned a TechCrunch article arguing that Ethereum’s days are numbered.

The core of Rubin’s argument is that ether will eventually become obsolete because smart contract fees on the Ethereum protocol are paid through ERC-20 tokens instead of ETH. According to Vitalik Buterin, Ethereum’s founder, this problem is being addressed by new proposals that make gas payments in ETH mandatory.

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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4.6 stars on average, based on 604 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Crypto Update: Coins Settle Down After End-Of-The-Day Bitcoin Madness

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While the short-term technical setup has been little changed in the cryptocurrency segment in the past 24 hours, a volatile dump&pump period made headlines in Bitcoin. The most valuable coin got smashed lower right before the futures market close, violating the $6275 support and plunging as low as $6100, triggering a downgrade in our trend model to neutral. BTC than surged higher a few minutes later and shot up to the $6500 resistance before settling down near $6400, where it stands today in European trading as well.

The possible manipulation event (or simply a closing imbalance in the futures market) dragged the rest of the market with it, although the moves were less pronounced in altcoins, and today, the market has been calm across the board, with most of the majors sporting modest gains amid the improving sentiment. On a positive note, Ripple is holding on to its gains from Tuesday, and today’s new swing high triggered a buy signal, which is a much-needed positive sign for the still generally bearish segment.

BTC/USD, 4-Hour Chart Analysis

Bitcoin’s long-term outlook is unchanged but the quick recovery from yesterday’s spike lower is a plus for bulls, even as the $6275 level is still in focus and the coin still haven’t shown strong bullish momentum.

With that in mind, traders should still be cautious with new positions, since the short-term outlook for the segment remains mixed, and BTC continues to trade dangerously close to the key long-term zone near $5850. Below $6275 further support is found at $6000, while resistance is ahead at $6500, $6750, and $7000.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade at a very important technical juncture, trying to establish a short-term uptrend after last week’s rally and avoid a re-test of the bear market lows. The fact that Ethereum remained stable amid yesterday’s Bitcoin move, and recovered to its short-term trading range is positive, but the coin has to show bullish momentum soon to remain on a short-term buy signal.

A sustained move below $200 would warn of a re-test of the lows but a new swing high could open up the way towards $235 and $260, with further strong resistance ahead between $275 and $280. Traders could still enter new short-term positions, but full positions are still not recommended given the bearish long-term trend.

Ripple Hits 1-Month High Above $0.35

XRP/USDT, 4-Hour Chart Analysis

Ripple is rallying again today, scoring a new high above the key resistance zone near $0.35 and triggering a buy signal in our trend model with the bullish swing. The next major resistance zone is found near the $0.42 price level, close to the dominant broad declining trendline, with a weaker short-term resistance level at $0.3750, the August spike high, and found at $0.32, $0.313, and $0.30. The coin is still on a long-term sell signal, despite the current move, and traders shouldn’t enter full positions here.

LTC/USD, 4-Hour Chart Analysis

Litecoin is trading in a very narrow range today, and volatility declined progressively in since the selloff two weeks ago, which will likely lead to a strong momentum move as early as the coming days. A bullish move would be important for the whole segment, as it could point to a developing leadership, with Monero, Stellar, and Dash also being in possibly bullish setups. Primary resistance is ahead at $56, while support is found near $51.

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 348 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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Ethereum

Ethereum Could Take Half of Bitcoin’s Market Share in Five Years: Analyst

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Advancements on the Ethereum blockchain could see bitcoin lose half its market share over the next five years, according to technology analyst Ian McLeod.

Bitcoin vs. Ethereum

Despite falling to 16-month lows, the Ethereum blockchain is poised for a strong rebound this year and could eventually challenge bitcoin for market dominance, McLeod said. In a recent interview with MarketWatch, McLeod suggested that ether’s price has already bottomed, which means its value will grow as the utility of its ledger grows.

“Not only do we think it will rebound considerably before the end of 2018, I believe that over the longer time it will significantly dent bitcoin’s dominance. In fact, I think we can expect bitcoin to lose 50 percent of its cryptocurrency market share to Ethereum, its nearest rival, within five years.”

McLeod believes that the utility of smart contracts solves “authenticity and provenance issues,” making Ethereum a more attractive option in the long-term. And while Ethereum is currently bogged down by technical issues, they pale in comparison to bitcoin’s scalability problems, says McLeoad.

“Unless bitcoin does more now to tackle scalability issues, and improves the technology it runs on, we cannot see how it can catch up with Ethereum over the next five years or so, when the crypto market will be even more mainstream.

The Ethereum network is considering several initiatives to improve the system, chief among them being the proposed transition from proof-of-work to proof-of-stake.

Bitcoin’s dominance rate currently sits at 55.4%, according to CoinMarketCap. Bitcoin’s share of the overall market rose above 57% last week, the highest since December. Ethereum’s share of the overall market has fallen from a high of 21% in early February to less than 11% today.

Ether’s Recent Struggles

McLeod’s positive outlook is a welcome sign for Ethereum’s supporters, which have seen the cryptocurrency plummet nearly 90% from peak-to-trough. The decline appears to have culminated last week after prices dipped below $170. Ether’s price peaked above $1,400 earlier this year.

Ethereum is facing what some consider to be an existential crisis as its reservation demand continues to dwindle. As the market for initial coin offerings (ICOs) continues to slow, investors have felt less compelled to hold ether. After all, the Ethereum blockchain is responsible for some 80% or more of token offerings. If this market dries up, so too does the impetus to hold ETH as a reservation currency.

Companies that successfully launched their token sale on Ethereum are now looking to sell their supply of ETH to begin funding operations. The large-scale cash-out over the past month suggests fewer startups plan to utilize Ethereum’s smart contracts anytime soon.

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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4.6 stars on average, based on 604 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Crypto Update: Market Remains Weak Despite Ripple’s Surge

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Ripple made headlines today in the cryptocurrency segment, as the third largest coin jumped by more than 15% after trading in a narrow range for several days. Most of the major coins joined the rally, but the gains were muted and the technical setup remained unchanged in most cases, with the long-term outlook still being bearish, while the short-term picture remaining mixed.

Ethereum, which has been in the center of the trends in the segment for weeks rallied back above $200, but stayed below the recent swing high, leaving several questions unanswered concerning the short-term trend. Bitcoin also got stuck near the $6275 level yet again, and the total value of the market is still below the $200 billion mark, with still no clear signs of major capital inflows in the segment.

ETH/USD, 4-Hour Chart Analysis

Ethereum quickly recovered above $200 after dipping below the weekend lows yesterday in late trading, retaining the short-term buy signal in our trend model. That said the coin still needs to show stronger bullish momentum to avoid a resumption of the clearly declining long-term trend. As sustained dip below $200 would still warn of a move to last week’s lows, while a move above $235 would open up the way towards $260 and the confluence resistance near $275.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been showing weakness in the last couple of days, and although the coin is still on a short-term buy signal, similarly to Ethereum, a quick recovery above $6500 would be needed to avoid a bearish turn.

Traders should hold on to their positions here, but given the still bearish segment-wide trends, we still don’t advise full positions even in the stronger coins. Below $6275, weaker support is found at $6000, close to the key long-term zone near $5850, while resistance is ahead at $6500, $6750, and $7000.

Ripple Needs Follow Through For a Buy Signal

XRP/USDT, 4-Hour Chart Analysis

While today’s spike in Ripple is encouraging, the coin needs to show further signs of strength, as the recent sudden spikes in the majors were quickly sold as the bearish trend remained dominant in the segment.

With that in mind, despite the broken resistance levels, XRP remains on a neutral short-term signal in our trend model, while still being bearish from a long-term perspective. The coin is currently trading right at the $0.32 level, with support found at $0.3130, $0.30 and near $0.30, while strong resistance is ahead at $0.35.

DASH/USD, 4-Hour Chart Analysis

Dash is among the stronger coins from a short-term technical standpoint, trading in a bullish consolidation pattern just below the key $200 level. That said, the coin failed to show strength today amid Ripple’s rally, and that still points to a dominant bearish trend in the segment. With that in mind, traders should wait for further positive signs before entering new positions, especially since a bullish leadership still hasn’t developed.

IOT/USD, 4-Hour Chart Analysis

IOTA is still weaker than average, together with NEO, EOS, and ETC, and the coin is still just above the August lows, clearly being in a broad downtrend, despite holding up above the lower boundary of its short-term range. A test of the lows is likely in the coming weeks, and the coin remains on sell signals on both time-frames, with support found between $0.455 and $0.475, and near $0.405, and with key resistance ahead near $0.57 and $0.64.

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 348 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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