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Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade in a consolidation pattern after surging past the final range extension target for its break-out. The second largest coin remains overbought on all time-frames, but the short-term uptrend is intact, and another push higher is possible. That said, investors should remain patient, as the segment is prone to a deeper correction, even if the exact top is not in yet. Key support levels are now found at $575, between $480 and $500, and near the prior all-time high at $400.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin bounced higher in the second half of the session together with the broad market after correcting back to the $250 level. The coin is back to the dominant rising short-term trend, but all time-frames point to a deeper correction soon, and investors should stay away from new positions here, although traders could still play a test of the all-time high. Key support levels are found at $125 and $100, with weaker levels at $260 and $170.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is trading in a relatively narrow range for the second day in a row, close to its recent all-time high and the coin is among the stronger majors regarding the short-term picture. Despite that, the long-term setup is dangerously overbought, and a significant correction is likely in the coming weeks, with major support levels now found at $650, $600, $500, and near $410.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is still trading near the $30 level in a narrow and choppy range, and the coin remains outside the previous rising trend. The currency is among the most stretched majors even considering the recent sharp dip, and we still expect a move below the $23 level in the coming weeks, with further support found at $18 and resistance ahead at $32.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is still trading below the recent marginal new highs, with the bull-trap setup still being possible, even as the rising short-term trend is intact. The $300 level remains in the center of attention, with key support levels found at $240, $200, $180, and $150, while the coin is extremely overbought, in line with the majority of the majors.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO found support above the key $40 level after the short-term correction that followed the recent break-out, and the coin remains in an encouraging long-term setup. While a volatile consolidation period is in the cards in the case of a segment-wide correction, a strong rally beyond the previous all-time high near $0.56 is possible in the coming days if the sentiment remains bullish. Key resistance is ahead at $50 while further support is found at $34, $30, and $27.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is still trading inside the broad short-term trading range that developed after last week’s exponential surge, and the coin remains stretched regarding the long-term picture, although the short-term momentum is back to neutral. Although the coin is already after a 40% correction top-to-bottom, we expect n even deeper move in the coming weeks, with strong support still only at $3 and $1.5, and potential Fibonacci support at $2.35.

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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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin and Ethereum Break-Out of Declining Trends

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The altcoin-led rally continued since our previous look at the long-term charts, and the major coins all confirmed a new short-term uptrend. Most of the largest digital currencies also broke out from their broad declining trends, as the total value of the segment is now more than 50% above the level around the correction low.

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BTC/USD, Daily Chart Analysis

The overall picture remained positive, with only Bitcoin’s weakness causing headaches for crypto bulls, as the most valuable coin is hovering close to declining trendline that dominated trading throughout the first quarter of the year.

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Despite the short-term weakness, BTC is still among the stronger majors from a long-term perspective, and with the secular uptrend clearly being intact, long-term investors should hold on to their coins and add to their holdings on the short-term pullbacks.

Crucial resistance is still just ahead between $9000-$9200, with further levels at $10,000 and $11,300, while support is found near $8400, $7650, and in the $6150-$6250 zone.

ETH/USD, Daily Chart Analysis

Ethereum built upon its recent relative strength, and the coin broke out convincingly above the declining trendline, and reached the next key resistance zone between $625 and $640 before the momentum of the move stalled.

While there are still several strong zones ahead, with the closest ones near $725 and $845, barring a quick move back below the declining trendline, the coin should continue the advance. With the long-term MACD still just in neutral territory, long-term investors could add to their holdings during short-term corrections, with key support levels at $500, $450, and $400.

(more…)

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 229 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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Recommendations

Trade Recommendation: Micron Technology

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Technical Overview

  • Micron Technology has experienced a 6.5-fold increase since May 2016. During this 2-year period, the stock found support at its intermediate-term trendline on numerous occasions (green trendline and arrows in Figure 1).
  • From the last retest of the intermediate-term support (last green arrow), the stock moved sharply higher, carried by a steeper support (violet trendline). The same trendline served as a resistance for two weeks in March 2018, when it was retested from below (last two violet arrows).
  • Today (April 23), the stock is breaking below its short-term support (orange trendline), after failing to remain above its 50 SMA on Friday (not shown).

Figure 1. MU Daily Chart

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Implications

  • By the time its correction is over, the stock is expected to have retested the intermediate-term support (green trendline). If the decline is severe and swift, the stock may bounce off the $40 level (i.e. target is the higher of $40 and the green trendline).
  • The stock’s 2018 Resistance (the trendline connecting the March 21 and April 18 highs) is expected to serve as a resistance (red trendline).

Outlook

  • Bearish as long as the stock is trading below its 2018 Resistance.
  • Neutral if the stock moves above the 2018 Resistance.

Trade Recommendation

  • Short at current levels ($48.75 – $49.25)
  • Target: Higher of $40 and green trendline
  • Stop: A close above the red trendline (currently at approximately $53.35, falling by roughly 40 cents/day).

 Benefits of Recommended Trade

  • A favourable risk-reward profile (roughly 1 : 2.25).
  • A sloping-down resistance used as a stop, resulting in an improving risk-reward profile of the trade as time goes by. The steep negative slope of the 2018 Resistance may potentially lead to a situation where the trade is “unsuccessful” (i.e. the stop is hit first before the target), however, still profitable. This is so as the 2018 Resistance will already be below current prices by mid-May (i.e. may get stopped out at a lower price than when the short was initiated).

Disclosure: No position

Featured image courtesy of Shutterstock.

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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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Analysis

Bitcoin Cash: Suddenly A Star Performer

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Just look at what has been happening in the prices of bitcoin and bitcoin cash.  Between December, the king of crypto fell some 65%. Since the April 1 low, bitcoin has partially recovered, gaining 31%.  Bitcoin cash really took it on the chin losing 80% in the December-April period. However, since then, BCH has been a digital darling, gaining 80%.  This ranks among the top crypto performers so far in the month of April. What’s behind the move?

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What We Have Been Missing

I have a confession to make.  For the past year bitcoin cash has pretty much flown under my radar. Here is a best efforts excuse.  Bitcoin cash has only been in existence since last August. During this time there have been so many ICOs flying around that keeping up with something which sounded like just another name for the original king of crypto didn’t seem all that important.

That was a mistake because there is quite a difference between the original and bitcoin cash.  And if it continues, someday bitcoin cash will be king. Here is what I am getting at.

All cryptocurrencies face certain limits when it comes to scaling. It is a more complex issue than simply adding more transactions to the blockchain.  A whole lot of the Gen III companies are attempting to come up with a solution to minimize the time required to confirm a block of transactions without blowing up fees.

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Bitcoin has the distinction of suffering the worst of both slow speed and bloated fees.  Back at the price peak last December transactions were limited to fewer than 10 per second while fees shot up to more than $30.  

Anyone buying bitcoin during that period for investment purposes probably didn’t care. After all, by last December, bitcoin had appreciated over 7,000%.  But if you wanted to use Bitcoin to buy a $4.50 Latte or a $75 Cuisinart coffee maker from Overstock.com, logic told you to forget about it.

Small Transaction R Us

This is where bitcoin cash came into being.  BCH became a hard fork of bitcoin, meaning that it uses the bitcoin protocols except for one important difference.  Each BCH block initially contained 8 megabits compared with just one for BTC. The whole point of BCH is to create a currency that in a medium of exchange rather than simply an investment device.

Back around August, the average transaction fee for BTC was about $0.70 (BCH was $0.08) so fees were completely overshadowed by the fixation in bitcoin’s skyrocketing price.

The Lessons From December

Long before the explosion in bitcoin fees last December work was underway on the Lightning Network.  When fully implemented by the Bitcoin community, it will reduce the gap between itself and bitcoin cash.  But that could be completely illusory based on last weeks announcement.

Around May 15 bitcoin cash plans to create a hard fork that will increase block size four fold to 32 bits.  Word of this has to be one big reason for the bitcoin cash price outperforming many of its peers. At least for the time being, BCH will have a considerable advantage both in terms of confirmation speed and fees.  

According to Bitinfocharts, current bitcoin fees are 0.199 compared with 0.0035 for bitcoin cash, while mining profits are about equal. This is a data point that is most impressive because the BCH maximize block size has yet to be increased.  BCH is attracting smaller average transaction size. In other words, their plan is working.

The Unpaved Road

The rapid price appreciation and the hard fork announcement will draw attention to BCH.  This is enough to make it more attractive than BTC. One thing to remember. If bitcoin cash developers intend to become a medium of exchange, a currency for the masses, they have a long way to go.  

All digital currencies face the same challenge.  Bitcoin claims acceptance by more than 10,000 merchants including 14 large retailers like Overstocked and Microsoft.  Bitcoin cash lays claim to just 429. Either way, fewer than 5% of all retailers accept cryptocurrencies and we suspect that less the 2% of all retail transactions are represented by any of these currencies.

Even so, bitcoin cash is suddenly taking on a far more exciting role in the crypto game so don’t be surprised to see this continue for a while.

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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4.3 stars on average, based on 61 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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