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Technical Analysis: Bitcoin Remains Under Pressure as Ripple Surges

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The major coins have been trading in a choppy fashion today, with a clear bearish turn in the second half of the session, despite the early gains that were boosted by the break-out in Ripple. Bitcoin fell to a new 10-day low as it continued its correction, getting close to the $15,000 level.

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As a declining short-term trend has been established, and given the overbought long-term setup, we expect further downside in the coin, with primary support found at $13,000, further levels at $11,300, $10,000, $9000, while stronger levels found at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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Ripple blasted through its prior high today, and it hit the $1 level for the first time, spiking as high as $1.1. XRP is the best performing major of the day, as the other coins turned sharply lower, although Monero and Dash trading near their record highs earlier on. Ripple has Fibonacci targets ahead at $1.25 and $1.5, while support is found at $0.68, $0.61, and at $0.42, the long-standing prior all-time high.

XRP/USDT, 4-Hour Chart Analysis

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum is still trading close to last week’s highs despite the brief rally above the $800 level in early trading, and the coin is still below the prior rising trend channel after the recent re-test. As the long-term momentum is also overbought in the case of the ETH token, further corrective price action is likely in the coming weeks.  Initial support is still at $740, while key 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’s break-out above its recent highs failed recently and the coin has been under pressure ever since, and it’s now trading below the $300 level. The long-term sell signal remains intact in the coin, although the short-term momentum is now neutral. The prior steep short-term uptrend has been broken, and the correction will likely continue. Key support levels are found at $125 and $100, with weaker levels between $250 and $260 and at $170.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash has been among the strongest major altcoins this week, and despite the current pull-back, the steep short-term uptrend is still intact and the coin is not far off yesterday’s all-time high. That said, the currency is in a strongly overbought long-term setup like the majority of the segment, and investors should wait for a correction before adding to their positions. Major support levels are now found at $1000, $800, $650, and $600.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic turned lower off the lower boundary of the previous uptrend channel today, but it’s still not far from the $40 level that has been in focus this week. The long-term picture is still extremely overbought and we expect a deep correction soon, with key support found at $32 and $30, and further strong levels at $23 and $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero continued to trade similarly to Dash, staying near yesterday’s highs amid in the choppy environment. The coin turned sharply lower in the second half of the session, and now the coin is testing the $400 level. The steep short-term uptrend remains intact, but we expect the coin to continue lower after yesterday’s short-term sell signal. Key support levels are now found at $300, $240, $200, $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO continues to trade in a short-term correction pattern after last week’s break-out and the subsequent surge. While the coin is not dangerously overbought from a long-term perspective and a rally to the $100 range extension target is still possible, a continued correction in the segment could put selling pressure on NEO. Key support zones are still found near $0.56, $0.50, and around $0.40.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA fell back below the $5 level despite an early rally in the coin, and it remains well below the all-time high that is has been testing recently. While the short-term setup is still neutral, the long-term picture is extremely overbought and the correction is likely to continue, with strong support is only found at $3 and $1.5.

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 275 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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Analysis

Crypto Update: Coins Consolidate Above Support but Downtrend Still Intact

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It has been a very quiet weekend for the major cryptocurrencies so far, as the predominantly bearish week ended with range trading and a collapse in volumes across the board. Most of the top coins failed to gain back the ground they lost during the steep selloff, with only Binance Coin and VeChain showing meaningful bullish momentum.

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The relatively strong Ethereum, EOS, and Ripple remained stable, with ETH hovering around the $500 level, EOS trading north of the key $10 support despite the network’s technical issues, and Ripple being stuck in a narrow range just below the widely-watched $0.54 resistance level. The total capitalization of the market has been virtually unchanged at $280 billion, as both Bitcoin and Ethereum flatlined.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin is trading right at the short-term support level near $6500, holding up just above the April low, with the crucial long-term support zone near $5850 that is vital for the whole segment. The coin is clearly in a short-term downtrend, while also being relatively weak on all time frames. The oversold short-term momentum readings are now cleared and that could point to a test of the lows in the coming days.

 

ETH/USD, 4-Hour Chart Analysis

Ethereum also cleared the short-term oversold readings, but it failed to leave the vicinity of the $500 support/resistance level. Despite the coin’s undoubted relative strength, and the still bullish long-term setup, the short-term trend signal remains a sell, and the declining trend is intact. Traders should still not enter new positions here, while investors could add to their holdings on the short-term selloffs. Strong resistance is ahead between $555 and $575, while further support is found at $450, $400, and $380.

Divide Widens between Leaders and Laggards

LTC/USD, 4-Hour Chart Analysis

Although short-term correlations skyrocketed during last week’s decline, the divergence between the relatively strong and weak coins got even more pronounced, with the likes of Litecoin, Dash, and Monero severely lagging the broader market. Litecoin got stuck below the $100 level after the breakdown last week, and it is below the long-term base pattern, as it failed to show relative strength during the weekend. Immediate support is found at $90, but new lows are likely in the coming days, as the short-term downtrend remains dominant. 

BNB/USDT, 4-Hour Chart Analysis

As a positive outlier, Binance Coin remained bullish amid the broad decline, holding on to the relative strength that it has been showing for several weeks. The coin’s stability is encouraging, and it’s nearing its rally highs with today’s surge, while having a good chance of resuming its uptrend, even as another segment-wide selloff could cause a jump in volatility again.

For now, the market is torn between bullish and bearish forces, and investors should focus on the technicals of BTC and ETH, while also keeping an eye on the leaders of the rally for signs of sutained strenght.

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 275 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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Analysis

Long-Term Cryptocurrency Analysis: Bull Market in Jeopardy

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As the crucial rally attempt that we pointed out in our previous long-term analysis failed, and the major coins sold off heavily afterwards, the segment is now in a difficult situation. While Bitcoin and especially Ethereum are still in bullish setups, the most valuable coin is now close to a major breakdown that could lead to structural bear market as we laid it out back in January.

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Some of the weaker coins are already below the large-scale consolidation patterns that developed after the year-end run-up, and as the divergence between the leaders and the laggards widens, the path of the two dominant coins even more importance.

BTC/USD, Daily Chart Analysis

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Bitcoin failed to trigger a short-term buy signal throughout the Ethereum-led rally in May and early June, and that technical weakness still persists, as BTC is now trading right at the April low, testing the key long-term base pattern.

A break below the strong support zone near $5850 would be the first similar event since the beginning of the bear market in 2014, and it could lead to an extended period of bearish bias for Bitcoin after the spectacular bull run of 2017. For now, the bull market is intact, with support found near between $6000 and $6275, at $5850 and below that at $5500, while resistance is ahead at $6500, $7000, $7350, and $7650.

ETH/USD, Daily Chart Analysis

Although Ethereum is clearly stronger from a technical perspective compared to Bitcoin, the coin is struggling to hold the key $500 level, as it is resumed its short-term downtrend. The April lows are well below the current price level and the long-term setup is bullish, so long-term investors could still add to their positions during the selloffs. Resistance above $500 is ahead between $555 and $575, while strong support is near $450, $400, $380.

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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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4.6 stars on average, based on 275 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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Altcoins

Crypto Psycho:  Crazy Price Action

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Say what you will about the cryptocurrency bubble of 2017 not making sense, what about the action lately?  Prices are acting terribly. Professor John Griffin claims last year’s bitcoin rally was manufactured by Bitfinex. Economist Nouriel Roubini proclaims bitcoin is going to zero. The founder of Crypto Asset Management says about bitcoin: “We are shorting it like maniacs at the moment.”  If that is not enough, technical indicators keep barking downtrend.

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Over the past week already depressed prices have fallen further with things like bitcoin down 14%+, Ethereum 17% and XRP 21%.  Yes, there were those stories about the CFTC digging into price manipulation and demanding more data from Coinbase and other exchanges. And then there was the hack on that small exchange in South Korea.  But nobody could reasonably pin the blame of this week’s performance on these two factors.

MarketWatch quoted Matt Hougan, head of global trading at Bitwise Asset Management: “The big story to me is the absence of positive news”.  There is some truth to this but that is only part of the story. As we pointed out in a recent article, most serious investors in crypto don’t pretend to understand what is causing the mess.  

When bitcoin evangelist Alistair Milne published a survey of his Twitter followers, 81% of them had nary a clue.  Interestingly enough though, almost half of these respondents checked the box “Crypto iz ded”.

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What exactly to conclude from this is open to interpretation but one thing is clear.  It is a big part of the problem long term investors face today. Crypto psychology sucks, the worst it has been since the Mt. Gox hack of 2010.

Good News Being Ignored

One of the barriers to progress in the crypto wars was the issue of regulatory clarification. Are cryptocurrencies simply digital assets or a class of securities that fall under the regulation of the Securities and Exchange Commission?

That question has now been answered.  On Thursday, the SEC’s announced that both bitcoin and Ethereum were not securities but digital assets.  However, the good news does not end here.

William Himman, representing the SEC, clarified the position of Initial Coin Offerings.  In cases where the ICO does not convey equity ownership of an enterprise and where the digital asset is sold only to be used to purchase a good or service available through the network on which it was created, it does not qualify as a security.

This represents one huge step forward in clarifying the regulatory environment and yet the markets response was brief and uninspiring as the full week’s performance unfortunately demonstrates. Honestly, this is a bit bizarre.

Other Good News Being Ignored

Crypto Asset Management may be short selling lots of currencies, but they are not alone.  According to www.bfxdata.com/swaphistory/usd  margin interest in bitcoin and Ethereum is in excess of $1.2 billion.  While this is down from around $2 billion last December it still represents a sizable pool of future buyers.

It’s In The Mind

For digital asset prices reflect not only investor sentiment but also those who represent ultimate users.  For a digital currency to represent a storehouse of value, it must have public trust. Right now that appears to be at a low.

According to the British publication London Loves Business, the story is pretty clear. Headlines state “71% of the UK public think the value of Bitcoin will either decrease or collapse over the next six months.”  According to LLB,  this represents a 10% fall in investor confidence since the same question was last asked in April’s 2018 poll and a 24% fall in investor confidence from November’s 2017 poll figures.  In other words, the price of bitcoin holds the same implication for investors as it does for potential users.

This Too Shall Pass

Mob psychology often proves wrong and this negative mindset appears to be feeding off of itself right now.  Even one of crypto’s biggest critics Warren Buffett would agree that betting against the mob has been a big part of his investment strategy. At some point the mob will once again be proven wrong when short sellers get spooked and forced to cover positions or value investors will filter over from an overpriced U.S. equity market.  Either way, there is value in the crypto market that has not existed for quite some time. In the end, 71% of the Brits surveyed will be proven wrong also.

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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4.4 stars on average, based on 81 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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