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Technical Analysis: $10,000 and $500, Key Levels Ahead for Bitcoin and Ethereum

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The broad rally in cryptocurrencies continued throughout the weekend, and the tide of the bull market lifted all ships this time, with all of the major coins registering gains during the weekend, although definitely Bitcoin’s push towards $10,000 made the most headlines. The most valuable coin ignored all red flags and technical indicators, and surged past $9000 and $9500, without any major issue.

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The coin is the most overbought that it has ever been, and it overshot all our expectations during this rally, but the current prospects remain hostile from an investment perspective, and now the short-term picture is also negative again. That said, the $10,000 level might act as a strong magnet and cause another push to new highs before a correction. Key support levels are found at $8200, $7700, and near $7000 and $6700.

BTC/USD, 4-Hour Chart Analysis

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Ethereum has also been drifting higher, but the token’s price ran into resistance near our primary target at $475, and the short-term MACD points to a correction. The coin is less stretched than Bitcoin regarding the long-term picture, and a rally towards the next target at near $540 is likely before the end of this cycle, but investors should already be reducing their positions on the way up. Key support levels are found at, $400, $380, and $350.

ETH/USD, 4-Hour Chart Analysis

Warning Signs of a Broad Top

Although only IOTA experienced a deeper correction among the majors amid the broad advance, the coin’s that are in more mature rallies made less progress. Dash and Monero are virtually unchanged since Saturday, while IOTA is back near the $1 level. Ethereum Classic joined the severely overbought coins thanks to its explosive move to new all-time highs, while LItecoin also hit another target as I kept on trending higher.

The setup in the segment is looking ripe for a major sell-off, and although the top might be a lengthy process traders and investors should be defensive now despite the euphoric sentiment.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is getting closer to its all-time high thanks to the weekend rally, and the coin turned neutral regarding the ling-term setup, as the majority of the advance is behind us. A test of the all-time highs just below the $100 level is still likely, and the short-term trend is still clearly positive, with support levels at $82.50, $75, and $64.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash hit our final target for its break-out during the weekend, and although the short-term trend remains intact, we expect a deeper correction in the coin soon, providing buying opportunities for investors. Traders could still play the trend with smaller positions and tighter stops, but the risk/rewards ratio is not favorable anymore. Key support levels are found at $500, $470, and between the $400 and $410 levels.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple is still the weakest major form a technical perspective, and although that means that the coin is not overbought as the some of the other majors, a broad correction would likely drag it lower too. The currency still faces strong resistance near $0.26 and $0.30, with support levels found at $0.2250, near $0.20, and at $0.18.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic broke through its prior high at $23 as we expected, but the coin is likely near the end of the current cycle, given the lofty gains of the last few weeks, and the overbought long-term picture. Traders and investors should reduce their positions, although further short-term. Below $23, strong support is found at $18 and $16.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is still consolidating its recent gains, and the coin remains in a strong short-term uptrend despite the relative weakness during the weekend. While the long-term momentum is already overbought, a move towards $200 is still likely, but investors should already reduce their positions here. Strong support is still found at $150 and $125, while the next target level is at $180.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO bounced back to the $40 level as we expected, and the coin remains among the least overbought majors after the recent correction. The coin remains bullish on all time-frames, and we expect a move towards $50, although a broad sell-off could drag NEO lower too, so some caution is warranted. Support levels are found at $34 and $30.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA bounced back hard after its deep correction below $0.70, despite the overbought long-term picture. That said, we still advise investors to wait for a durable move lower before adding to their positions as correction risk remains high, although a test of the $1.1 record high is still possible. Support levels are found near $0.75, $0.64, and $0.56.

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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.

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Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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Analysis

Technical Analysis: Bitcoin Grinds Higher as Records Tumble in Altcoins

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The historical surge in the segment, which is the second such move this year, continued today, with another round of break-outs in some of the major altcoins and tepid gains for BTC investors. Ethereum, Ripple, Dash, and first and foremost Litecoin was leading the charge, with the recent star LTC topping $300, just after a day of hitting the $200 mark.

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Litecoin defied all odds after reaching extremely overbought readings, and the coin rode the speculative wave, turning exponential, not unlike IOTA and Bitcoin previously. With the coin being stretched in an unprecedented way on all time-frames, investors could even consider selling their core positions at the current levels, as a deep correction is almost granted in the coming period. The first meaningful support level is found at $125, and a re-test of the $100 level is probable during the next major correction.

LTC/USD, 4-Hour Chart Analysis

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Ripple finally ended a long period of relative weakness today, and the only major on a long-term by signal jumped over primary resistance at $0.26 and crossed the $0.30-$0.32 too in the euphoric sentiment. As the coin is not long-term overbought following the 6-month long consolidation, the buy signal in XRP remains intact, with the only major resistance level being found at the all-time high near $0.425.

XRPUSDT/USD, 4-Hour Chart Analysis

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