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Technical Analysis: Bulls Back in the Driving Seat

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While it’s been exactly three weeks since the major coins hit a panicky correction low, it’s still too early to conclude that the downtrend is over in the case of most of the coins, even as we have already been advocating long-term purchases slightly before the bottom in early February.

The preceding run-up made the steep correction special, and that translated into an almost 70% decline on average in the most traded coins. In light of that, the post-crash recovery is different from the latest rallies in the segment, and volatile sell-offs are still possible, as the majors work their way through the strong resistance levels and declining trendlines.

That said, most of the coins are sporting lofty gains since the bottom, and price action remains favorable, with Bitcoin leading the way higher yet again today. Despite the mid-day pull-back, the most valuable coin is trading near its intraday high after the US close, even as stock volatility increased, which had a negative effect on the segment lately.

BTC/USD, 4-Hour Chart Analysis

BTC still has several resistance levels ahead before a possible test of the declining trendline, with first the $11,300, then the $11,750 level signaling overhead supply. For now, the short-term $10,500 support is in focus while below that the $10,000 level and the $9000-$9200 zone are still strong.

ETH/USD, 4-Hour Chart Analysis

The two major technical obstacles that we noted yesterday proved too strong for Ethereum, for now, as the coin is still consolidating just below the key dominant trendline, with very low volatility. While the exact timing of the next move is not clear, the outlook for the coin is encouraging, and both traders and investors should hold on to their positions here, with primary support still at $845, further levels at $780, $740, and targets head at $910 and $1000.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin has been relatively weak today as it is still consolidating near the $215-$225 short-term resistance zone, with no major moves in either direction. Despite the short-term weakness, we expect the coin to resume the advance in the coming days, with a likely rally above the $250 level, possibly targeting the resistance zone near $300. The coin remains bullish on all-time frames, even as the ideal long-term buying opportunity passed, with support levels found at $200 and $180.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is stuck between the $600 and $650 levels, still showing short-term relative weakness, despite the favorable long-term setup. While further corrective price action is possible, the coin should resume the recovery soon, with resistance levels above $650 at $700 and $750, and targets at $825, $950, and $1000.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple failed to gain traction yet again today, as it continues to trade below the key $1 level in the generally bullish environment. That said, long-term setup is still promising, but another test of the $0.85 level is possible before the coin resumes the recovery, with targets ahead at $1.25, and $1.50, and further support at $0.68.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

ETC is still trading in a bullish consolidation pattern, lagging Bitcoin during today’s rally, as the coin is still hovering below the primary resistance zone just above the current price level. We expect the coin to continue the really in the coming weeks, despite the slightly stretched long-term picture, with resistance found near $43, and support below between $32 and $34, and near $30.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero has been showing relative strength amid this week’s rally, although the $300 level continues to hold back the coin, despite a brief spike above the resistance in early trading. The currency should test the $335 level soon, and given the favorable long-term setup, a rally towards $400 is likely in the coming period, with support levels at $280 and $240.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO continued to show relative strength today after triggering a short-term buy signal earlier on this week, and the coin is now consolidation its gains slightly below the resistance zone near $150. The coin is now above the previously dominant declining tendline, and it is right at the prior swing high, with the long-term picture still being favorable. Above the primary resistance, another level is found near $190, marking the all-time high, while support is between $120 and $130, at $100, and near $80.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is flirting with the $2 level yet again, and the coin is now trading right at the dominant declining trendline, with strong resistance also ahead between $2.2 and $2.35. Although the road still looks bumpy for bulls here, the currency is likely building a base, and we still expect a break-out soon, with key support found just below the current price and near the $1.5 level.

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 352 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

Stocks Pull Back as China Exits Trade Talks

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Global stock markets have spent the better part of the day in the red, although the losses are muted, and markets are slightly choppy before Wednesday’s Fed meeting. China pulled out of the scheduled trade talks with the US following last week’s tariff-escalation and that put pressure on risk assets globally. Chinese and Japanese markets were closed today, and that also attributed to the lower than usual liquidity and trading activity.

Dow 30 Index Futures, 4-Hour Chart Analysis

European Central bank President Mario Draghi warned of a “vigorous” pick-up in inflation, which triggered a selloff in the dollar and bonds across the globe, while putting more pressure on risk assets too. The dollar almost regained all of its losses since Draghi’s speech and with the looming fed decision in mind, further choppy and nervous trading is expected in the Greenback, especially following the recent surge in Treasury yields.

Russell 2000, 4-Hour Chart Analysis

The Dow and the S&P 500 both continued to retreat off last week’s record highs, as Friday’s trend resumed, and despite the bounce in the market leading tech giants, the Nasdaq is also lower. On a negative note, small-caps are trading at a 1-month low, as measured by the Russell 2000, which could mean that the US market might be ready to roll over into a correction.

The main European indices are holding on to most of last week’s gains in the meantime, but only the energy segment is clearly positive today, with the help of the strong rally in the price of crude oil.

Dollar and Euro in Focus Before the FED

EUR/USD, 4-Hour Chart Analysis

The EUR/USD pair will see fireworks for sure this week, and although the pair reached the 1.18 level today, it’s still in a zone with strong resistance and bulls still can’t conclude a successful breakout, with the 1.1675 level still being close form a technical perspective. For now, the short-term uptrend is intact, but a quick move below 1.1750 could mark a reversal.

Emerging market currencies are mixed, with the Turkish Lira trading notably higher thanks to the possible release of Pastor Brunson, who has been a major catalyst for the diplomatic troubles between the US and Turkey. The release of the Pastor could stabilize the currency, but another major global risk-off shift could hurt the vulnerable country again, as yields continue to rise globally.

WTI Crude Oil Futures, 4-Hour Chart Analysis

As Saudi Arabia basically ignored Trump’s call for lower oil prices, the recent strength in the commodity culminated in a break-out to new 10 week highs in the WTI contract, which topped the $72 per barrel level for the first time since early July. Natural gas hit $3, and it is on the verge of breaking out to a new 7-month high too, as the whole energy segment is rallying.

Elsewhere in the commodity segment, the Dollar’s choppy price action led to a mixed picture, with copper pulling back slightly from last week’s highs, while gold is still fighting to stay above the $1200 per ounce level as it has been the case for several weeks now.

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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4.6 stars on average, based on 352 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: Bullish Continuation Patterns for Lisk and Waves

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Last month, we ran a series of articles about altcoins that broke out from patterns that have kept them bearish for most of the year. A few days after the breakouts, rallies faded. It caused many to feel that the breakouts were bull traps. Many of the altcoins we covered showed signs of weakness. Some even went below the price level.

In technical analysis, breakout rallies always fade. Many assets tend to revisit the breakout price level or even breach it. What you need to look for to remain confident in your investments are continuation patterns. These structures would tell you that the pullback is temporary and the uptrend is still intact.

In this article, we look at continuation patterns for Lisk and Waves.

Lisk/Bitcoin Analysis  

The Lisk/Bitcoin pair (LSK/BTC) broke out of a large falling wedge on the daily chart on August 15, 2018. This happened after bulls breached resistance of 0.00046. Because of the breakout, the pair managed to rally to as high as 0.00088636 on August 29. At that level, bottom pickers and breakout traders started to take profits. Consequently, the market pulled back.

Daily chart of LSK/BTC

Now, LSK/BTC dropped to as low as 0.000422 on September 20. As a result, many stop losses were triggered. You can infer this because of the significant rise in volume. However, those who cut their losses were badly whipsawed. The pair closed the day at 0.00051683, which is still a level above the breakout.

Seasoned traders would have instead bought the dip instead of cutting losses. That’s because LSK/BTC is forming a bullish flag on the daily chart. This is a pattern that conveys consolidation in preparation for the next move up. In other words, the market remains bullish. It just needs to establish a new base to keep its ascent sustainable.

Waves/Bitcoin Analysis

The Waves/Bitcoin pair (WAVES/BTC) took out resistance of 0.000286 on August 12, 2018. The price action triggered the breakout from the large falling wedge on the daily and weekly charts. The breakout inspired a rally to 0.000367 on August 13. At this price, the breakout rally faded as many took profits.

As heavy selling commenced, Waves/Bitcoin slid to as low as 0.00029 on September 7. This drop would have made many investors nervous. Fortunately, bulls held their ground. That’s because the market was creating a bullish pennant on the four-hour chart.

WAVES/BTC four-hour chart

After the breakout rally faded, Waves/Bitcoin range traded between 0.000367 and 0.00029. As you can see on the chart, bulls defended 0.00029 multiple times. This was a very encouraging signal. It tells us that participants are buying as close to the breakout as possible. Once the market finally realized this, WAVES/BTC exploded.

Now, WAVES/BTC appears to be in the midst of creating another bullish continuation pattern. It is very likely to explode again soon.

Bottom Line

In technical analysis, breakouts rallies fade more often than not. Many assets tend to revisit the breakout while others go below it. If you want to remain confident in your investments, look for continuation patterns. These structures tell us that the altcoin is consolidating in preparation for the next move up.

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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3.6 stars on average, based on 239 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Analysis

Crypto Update: Market Stabilizes as Ripple Craze Fades

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The major cryptocurrencies had crazy Friday, with the skyrocketing Ripple in the center of attention. XRP more than doubled in 24 hours, and the coin was up 3 times off its low from earlier this month before entering a correction in the second half of the day. Ripple briefly took over Ethereum as the second largest coin by market capitalization, even as ETH also hit an almost three-week high amid the broad rally in the segment.

XRP/USDT, 4-Hour Chart Analysis

XRP settled down above the $0.50 level near the market cap of ETH, but short-term the coin is severely overbought, and a pullback to the $0.42-$0.46 zone is still very likely even if the coin manages to hold on to its stellar gains and enter long-term rising trend. For now, a long-term trend change is not confirmed, despite the huge bullish move, with most of the segment still being in bearish long-term trends.

That said, the short-term buy signal is still intact in our trend model, and should the overbought readings get cleared, traders could enter new positions again. Support levels are found near $0.54, $0.51, while resistance is ahead near $0.57, $0.64, and $0.75.

BTC/USD, 4-Hour Chart Analysis

Bitcoin got up to $6750 yesterday, but so far, it failed to overcome the resistance zone near that price level, and the coin is now trading in a shallow short-term correction. BTC needs to stay above the $6500 support to maintain the break-out that followed Ripple’s surge and to remain on a buy signal in our trend model.

The fact that correlations are still declining between the coins is a positive sign, but the overall bearish picture in the segment and Bitcoin’s proximity to the key long-term zone still warrant caution here. Further resistance zones are now ahead near $7000 and between $7200 and $7300, while support below $6500 is still found at $6275, $6000, and near $5850.

Altcoins Pull Back with Ripple, Short-Term Setup Still Promising

ETH/USD, 4-Hour Chart Analysis

Ethereum finally broke above the key $235 support/resistance level thanks to yesterday’s broad rally, and the coin reached the next major resistance zone near $260 as expected after the bullish move. Now the dominant declining trendlines are not far away, so traders should reduce their positions, since the long-term trend is still clearly bearish.

A test of the lows is still in the cards in the coming weeks, and the coin remains on a long-term sell signal despite the short-term rally.  Support is found near $200, $180, at the low near$170, and at $160, while further resistance is ahead between $275 and $$280 and at $300.

Stellar/USDT, 4-Hour Chart Analysis

Stellar was among the strongest coins during yesterday’s rally, following Ripple higher, but now it is testing the key support/resistance zone between $0.2375 and $0.25 after entering a correction together with the broader market.

That said, the break-out is intact in Stellar, and traders could hold on to their positions here. Support levels are found near $0.21, $0.1930, and $0.1830, while further resistance is ahead near $0.2650 and $0.2850.

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 352 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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