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Technical Analysis: Bitcoin Still Under Pressure as Mixed Trading Continues

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The short-term correction that has been dominating the major coins is still intact, although the relatively low volatility and the ongoing rotation between the currencies suggest that the rising trend is not in danger. Bitcoin is hovering around the $4200 level today, as the most valuable coin, exited the short-term trend and entered a trading range between $4150 and $4400 after the sharp post-crash advance. BTC is still 40% above the lows of the deep correction, and with the long-term picture being constructive we expect the advance to continue after the consolidation. Further support is found at $4000, $3800, and $3500 while resistance is ahead around $4650.

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BTC/USD, 4-Hour Chart Analysis

The other majors are mixed with no major percentage changes compared to yesterday’s price levels. Ripple and Monero are still among the better-performing coins, while Dash is also showing strength after a period of weakness. NEO and IOTA remained more volatile than the broader market while Ethereum Classic found some support near $12 after a negative period. With correlations being lower than in recent weeks the individual starts require more attention from traders, so let’s see the details for the most traded majors.

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Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum is still holding up above the crucial $285 level despite the recent weakness, and the long-term picture remains encouraging for bulls here, with the gains of the 50% rally being mostly held by the coin. That said, the $300 level is still ahead as resistance for the currency and the short-term trading range remains intact. Further resistance is still ahead at $380, while support is at $250 and $235.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin remains stuck between the $51 support and the $56 resistance as the coin still trades with relatively low volatility, while underperforming the broader market. LTC needs to recover above primary resistance to retain a short-term buy signal, as it is still below the rising long-term trend.  Below $51, further support is found at $44, while resistance is ahead near $64, and at $75.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash bounced off the key $300 level as it formed a short-term bottom as we expected, and with the long-term picture still being very positive, the coin is expected to test the $330 and $360 levels in the coming period. That said, the short-term consolidation pattern is still intact, and more sideways price action is possible before the segment concludes the short-term correction. Below $300, support is found near $265 while crucial resistance is ahead at $360 and above that at the all-time high near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

XRP remains very strong from a technical perspective, still trading inside a shallow short-term consolidation pattern that points to a rally above the resistance zone around the $0.22 level soon. The coin outperformed the broader market during the current short-term correction, holding up above primary support. Further support levels below $0.195 are still found at $0.18, $0.16, and $0.14, with resistance ahead at $0.26 and $0.30.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic found support near the $12 level, but it remains weak after last week’s rally, and the resistance zone around the $13.50 level is still ahead as a major obstacle. The coin has been acting weak since the China-induced crash, and short-term traders are still advised to stay away from new positions here, although the current price levels are still attractive for investors. Primary support is found near $11, while further resistance is ahead at $16 and $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero has been the most stable major since the crash, as it remained above the $80 support but below the declining trend with progressively falling volatility. We still expect the coin to exit its correction pattern soon and test the $100 resistance, as it remains one of the strongest currencies regarding the long-term picture. Below $80, key support is found at $68, while further resistance is ahead at $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is once again trading near the $30 level as the coin continues to correct the huge rally off the crash lows. The rising trend is clearly intact, and as the MACD is back to neutral, a short-term bottom could be formed in the coming days. Support is still found at $30 and $25 while primary resistance is around the $34 and $40 levels, with the dominant short-term trendline currently at $27.50.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA bounced off the short-term support level just above the $0.50 level again today, and it is likely forming a swing low that will conclude the short-term correction. Last week’s rally topped out near the $0.64 resistance again, but we still expect a move above that zone in the coming weeks. Further targets are near $0.75 and 41.10 while key support is still found between $0.45 and $0.48 and below that at $0.35.

Featured image from 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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Analysis

Crypto Update: Coins Hit 6-Week Highs as Rally Continues

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Bullish price action is still dominant in the cryptocurrency segment today, despite the recent lofty gains, and the overbought short-term picture in the ace of most of the majors. Correlations continue to break down, as more and more coins are in confirmed uptrends, with the total value of the market hitting $400 billion for the first time since early March.

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The top digital currencies are mixed today in the generally positive environment, with Bitcoin Cash, IOTA, Ethereum Classic, Dash, and Monero showing relative strength, in the face of the slightly overbought short-term momentum readings. While this is not the best moment to enter new short-term trades with regards to the majority of the coins, the long-term setup favors further gains in the coming weeks.

BTC/USD, 4-Hour Chart Analysis

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Altcoins have been leading the market higher in the last couple of weeks, and Bitcoin is still stuck below the $9000 level, as it continues to slightly lag behind from a short-term perspective. The coin ran into the strong resistance zone between $9000 and $9200 after breaking out of the broad declining trend.

Now a pullback is likely, given the slight weakness, with a possible test of the prior swing high at $8400. In case of a bullish move, the next target is at $10,000, and long-term investors should still add to their holdings on the short-term dips.

ETH/USD, 4-Hour Chart Analysis

Ethereum kept on creeping higher to marginal no rally highs in the last couple of days, nearing the $650 level despite the overbought short-term picture. Short-term traders should still not enter new positions here until the overbought readings are cleared, while long-term investors could still add to their holdings during the pullbacks.  Resistance zones are ahead near $735 and $780, while primary support is between $555 and $575.

Altcoins Diverging but Bulls Remain in Control

XRP/USDT, 4-Hour Chart Analysis

As we noted, the correlation between the coins is lower than during the downswing, and that confirms the bullish price action in the segment. Ripple is trading in a consolidation pattern near the $0.84 level, and although the overbought momentum readings are not yet fully cleared, the trend is clearly bullish and a new short-term buy signal is likely in the coming days.

Among the other recent leaders, IOTA triggered short-term sell signal, reaching the strong resistance zone near $2.2. EOS, Stellar, Cardano, and NEO are consolidating their gains, while Dash, Monero, and ETC are trading slightly above last week’s highs, but traders shouldn’t chase them higher here, as a short-term correction is likely soon.

Stay tuned for our detailed long-term technical analysis coming out later on today.

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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4.5 stars on average, based on 228 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

Bitcoin and Gold are Trading Inversely With One Another

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Advocates of bitcoin often compare the digital currency to gold for its finite supply and store-of-value characteristics. While BTC hasn’t come close to dethroning gold as the world’s most trusted safe-haven, it has steadily outperformed bullion amid the latest recovery. This has some people asking whether virtual currencies are eating away into gold’s demand.

Inverse Relationship

Strategists have identified a strong inverse trading pattern between gold and bullion stretching all the way back to the fall, right around the time that cryptocurrencies rebounded from a China-induced selloff. As bitcoin and other cryptos surged, gold experienced a steep fall from a high above $1,351 in early September to a low of $1,241 just three months later.

As bitcoin cooled down in the new year, gold resumed its upward trajectory and eventually peaked near $1,370 at the end of January.

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Below are the charting patterns for gold and bitcoin going back one full year.

The latest divergence is easy to spot. Since hitting a settlement high of $1,360 on Apr. 11, bullion has declined 2%. Over the same period, bitcoin surged 27%.

Bitcoin’s oversized percentage move relative to gold is a reflection of underlying volatility in the cryptocurrency market. Crypto assets as a whole are but a tiny fraction of gold’s $7.8 trillion worth. That said, the digital asset class peaked above $830 billion earlier this year, making the case for a trillion-dollar market more believable.

Systemic Risks

Proponents of bitcoin’s safe-haven status generally agree that the cryptocurrency is well suited to outperform the market during periods of heightened economic and political instability. This is generally believed to be the period in which gold prices thrive. However, unlike gold, bitcoin has also outperformed during periods of relative calm.

The second-largest bull market in history started off as a positive for gold as prices crossed $1,900 a troy ounce in 2011. However, bullion hasn’t been able to hit anywhere near those levels ever since. Bitcoin, on the other hand, has been the world’s best-performing currency (if one calls it that) in six of the past eight years.

Although the charts seem to indicate an inverse relationship between gold and bitcoin, it’s much more difficult to prove that investors are swapping one asset for the other at any given time. There’s some anecdotal evidence to suggest this is the case but a lack of trading data makes it difficult to conclude definitively one way or the other.

Supply and demand factors must also be weighed in analyzing the price trajectory of both assets. Gold’s total supply is increasing by an average of less than 2% annually, according to the World Gold Council. At the other end of the spectrum, the final bitcoin is expected to be mined in 2140, with total supplies engineered to decline until that date.

On the demand side, gold has been losing its allure as investors continued to pile into stocks. In 2017, appetite for bullion fell by 7%, with gold-backed ETFs plunging to one-third of the previous year’s demand. On the other hand, bitcoin’s demand has skyrocketed as more traders noticed its meteoric rise.

One area in which bitcoin has an advantage over gold is non-correlation. As the above examples clearly demonstrate, BTC is not correlated with the broader market. Gold, on the other hand, is influenced by risk-off sentiment, geopolitics, interest rates and inflation, among others. At present, these factors may play into the hands of bullion as investors prepare for the new business cycle.

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 343 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

Technical Analysis: Bitcoin Tests $9000 as Altcoins Pull Back after Strong Rally

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The cryptocurrency segment is in a short-term correction after a great week that saw several key resistance levels fall, as the major coins kept up the bullish momentum and hit new rally highs after a shallow correction. Ethereum and the smaller altcoins continued to outperform Bitcoin on the way higher in the last couple of days, but today, Bitcoin is holding up relatively well amid the pullback, indicating a slight change of behavior.

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BTC/USD, 4-Hour Chart Analysis

Bitcoin broke out of its lengthy declining trend, rallying quickly up to the key $9000-$9200 zone as expected, even though the momentum of the move has been relatively weak, and the coin failed to enter the zone, with the lower resistance line halting the advance, for now. The currency should remain above the declining trendline, but another short-term consolidation phase could be ahead as altcoins are likely entering a correction. Further resistance is ahead at $10,000 and $10,500 while support is found near $8400 and $7800.

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ETH/USD, 4-Hour Chart Analysis

Ethereum hit the $625 level as we expected and it also broke out of its declining trend, after confirming a new short-term advance earlier on this week. Traders shouldn’t enter new positions here, as the coin is stretched from a short-term perspective, while investors could still add to their holdings on the pullbacks. Support is now found between $555 and $575, and below that zone at $500, while strong resistance is ahead between $625 and $645 and near $740.

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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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4.5 stars on average, based on 228 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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