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Technical Analysis: Coins Hold Their Ground Despite Early Sell-Off

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Today’s session started out in a decisively negative fashion, as the continued regulatory issues and the Japanese exchange hack weighed heavily on investor sentiment. The previously weaker majors lead the market lower, while Ethereum remained the most notable bright spot in the segment before the weekend.

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Bitcoin fell as low as $10,300 after plunging below the key $11,300 level, but the $10,000 support zone hasn’t been in danger so far. That said, the short-term downtrend is clearly intact and a drop to or below the prior correction lows is the most likely scenario.  Above $11,300, strong resistance is found at $13,000 while support below $9000 is at $8200 and $7650.

BTC/USD, 4-Hour Chart Analysis

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The morning sell-off was yet again highly correlated between the majors, and that points to a continuation of the correction despite the late-session strength, so traders should expect volatility to remain elevated across the segment.

Ethereum is still overbought from a long-term perspective being the late leader of the preceding rally, and the $1000 level remains in the center of attention before the weekend. We expect new lows int eh coin before the end of the cycle, and below the $740-$750 zone, other support levels and found at $850, $625, and $575, while primary resistance is ahead at $1175.

ETH/USD, 4-Hour Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is still among the weakest majors, and it dipped below $170 during today’s sell-off, although the coin remains well above the crash lows near $140. The market still seems to be focused on the support zone between $170 and $180, with further strong resistance at $200. We still expect a test of the crash lows in the coming period, with a likely drop to $125 and a possible move to $100 before the end of the cycle.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash joined the sell-off today despite yesterday’s early relative strength, as the short-term downtrend is still dominant. We still expect a move towards the cash low with a possible new low during the current leg lower, with possible entry points for long-term investors near the $625 and 4500 levels, and resistance ahead in the zone around $825.

Ripple

 XRP/USDT, 4-Hour Chart Analysis

Ripple dipped below the $1.25 level as we expected, with the short-term downtrend still being intact. The coin is relatively weak compared to the other majors, and we expect a test of the $1 or even the $0.85 level before the end of the current cycle, although long-term investors could accumulate the currency near those levels.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is back just below the $30 resistance after the early decline today, and the coin remains in a clear downtrend, in line with the broader market. ETC is expected to re-test the $25 and $23 levels, where investors could be looking for entry points, while traders should wait for a trend change before entering new positions.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero continued to show relative weakness today, but it managed to rebound above $300 in late trading, although the short- and long-term setups are both negative. We still expect the coin to continue its correction, with a likely dip below the crash lows, and a possible test of the $200 level. Further support is found at $240 while resistance is ahead near $330.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO still trades below the prior rising trendline following today’s volatile session, and the coin remains inside the dominant correction pattern, being oversold from a long-term perspective. We continue to expect the coin to dip below the $100 level during the cycle, with further support levels found at $80, $64, and $56.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is still among the weakest majors, barely trading above the weekly lows, while also being close to the crash lows from last week. Despite the weakness, a durable bottom might be close, although further sharp corrective moves are possible before that, with a likely dip below the support zone just below $2, and a possible test of 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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  1. MinerMatt17

    January 26, 2018 at 10:39 pm

    Are all the levels mentioned in this article something that it will drop to for a few hours like the last correction? Because the levels mentioned here seem absurdly low, and would mean the market cap of crypto is reduced by massive amounts.

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Analysis

Daily Analysis: Dollar Rebounds as Stocks Struggle at Key Levels

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2731 -0.08 %
DAX 12,451 0.86%
WTI Crude Oil 61.64 0.31%
GOLD 1351.00 -0.32%
Bitcoin 10030 -0.52%
EUR/USD 1.2405 -0.78%

The main US stock indices entered a crucial zone during the overnight session that we have been monitoring throughout the last two weeks, as the line-in-the-sand zone for the correction. Despite that, the question regarding the fate of the move has been postponed for next week, as the S&P 500 and the Dow failed to clearly rally above the zone, while the Nasdaq showed relative weakness after leading the market higher during the bounce.

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S&P 500, 4-Hour Chart Analysis

We are still leaning on the side of the bears regarding the short-term outcome, as the technical damage of the Volatility-Armageddon seems bigger than what a straight-line recovery would suggest. That said, the fundamental news was great today (not counting the latest developments in the Russia-Gate), as the US housing market sent positive signals amid the rising yields, while the UOM Consumer Sentiment Index also beat expectations.

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On an interesting note, the rise in yields paused, despite the positive economic news, and in this perverse world that led to a strong rebound in the Dollar, right after the new multi-year highs in the EUR/USD pair during the overnight session.

EUR/USD, 4-Hour Chart Analysis

The Euros weakness helped equities of the old continent is finally showing some relative strength, and the same goes for Japan, as the oversold readings in the USD/JPY pair that we noted also led to a rebound, back above the 106 level. While the bounce slightly helped the negatively diverging benchmarks, the clear technical weakness remains another bearish sign for the coming weeks.

DAX, 4-Hour Chart Analysis

The Dollar’s bounce pushed the price of gold lower too after the encouraging rally, but the Shiny Metal remains just a tad below its rally high, which is commendable, given the improving risk-sentiment throughout the week, even as another short-term correction is possible here. Crude oil enjoyed another positive day, although it remains well below its recent highs, just as the commodity-related risk-on currencies, where we already noted the relative weakness yesterday. That also adds to the cautious outlook for equities even in the face of the 5/5 positive days this week.

Gold, 4-Hour Chart Analysis

Cryptocurrencies

The crypto market continued to show robustness amid the hectic trends in traditional assets, and today’s meager correction adds to the bullish signs that emerged last week and remained with investors throughout this week. While not everything is rosy, with still several coins in dominant downtrends, including Bitcoin and Ethereum, there is clear leadership behind the rally, and if the coming short-term pullbacks remain in-line with today’s move, bulls should have their hopes up

BTC/USD, 4-Hour Chart Analysis

What would change the bullish posture is a return to the “everything moves together with high volatility and bearish volume” regime of the preceding steep sell-off, but, for now, that seems unlikely, and a quiet consolidation this weekend would be just what the doctor ordered for the segment.

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

Technical Analysis: Cryptocurrencies Show Strength amid Slight Correction

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The crypto segment is trading in a short-term correction, or rather consolidation pattern today, as bullish signs continue to dominate the landscape, despite the pause in the surge. The largest coins are mostly down by a few percent from the overnight highs, but the momentum of the move is not substantial, for now, and several currencies are showing relative strength.

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Bitcoin is hovering around the key $10,000 level after hitting an overnight high above $10,300, with the short-term MACD indicator showing the possibility of a short-term correction. With that in mind, investors and traders should wait for a dip before entering new positions, even as further gains are possible. The next key resistance level is at $11,300 with further strong levels ahead at $13,000, and $14,250, while the line-in-the-sand support is still found between $9000 and $9200.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin Cash, Litecoin, NEO, and Ethereum Classic are all among the stronger coins, while Ethereum is also holding up well amid the weak pullback in BTC. The price of the ETH token has been very stable today after a period of underperformance, and it is still trading well below the next resistance level at $1000, but also significantly above the key support near $850.

We still expect the currency to consolidate more before a clear move out of the downtrend, but investors could still use the dips to boost their holdings. Further support levels are found at $740, $625, and $575, with resistance above $1000 ahead at $1175.

ETH/USD, 4-Hour Chart Analysis

(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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Analysis

Pre-Market: US Stocks at Make-or-Break Levels as Euro Tests 40-Month Highs

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Traders might be in for another exciting Friday session in the US, as although the coming Chinese year of the dog means that liquidity might be lower than usual, the aftermath of last week’s crash is in a crucial phase. The surge in cryptocurrencies also halted a bit, and all major asset classes look ripe for an action-packed day, including bonds, commodities, and fiat currencies.

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The key levels in the major US indices that we have been monitoring ever since the crash are now in play, with the Nasdaq actually being already above the corresponding resistance zone. That said, apart from the tech benchmark, the Dow and the S&P 500 are hovering right near the “hot” zone, and before a clear move above it, bears could still have their moment, with a possible re-test or even new correction lows in the coming weeks.

S&P 500 Futures, 4-Hour Chart Analysis

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As we noted previously, it’s unlikely that the bull market is dead just yet, despite the fact that we agree with Peter Toogood (really) that “this market is nuts…” from a valuation perspective, but short-term, these are the levels where the bounce should fail, in theory, that is.

At this point, even bulls should take a step back, and wait for the next pullback before jumping in, as the short-term indicators are stretched, while bearish traders could be looking for entry points today, and long-term investors could just enjoy the show.

Heavy Trading in Forex Markets

Although equities and Treasuries are mostly in the headlines, the most important forex pairs are also very active, with the Euro, the Dollar, and the Yen all being pushed around by the quick repositioning of the big players.

EUR/USD, 4-Hour Chart Analysis

This creates a great day-trading environment, with clear, significant swings in both directions, within the strong trends. The Dollar is generally trading lower since the bounce started, and the EUR/USD pair already managed to reach a new 40-month high during the Asian session, before turning lower in European trading.

USD/JPY, 4-Hour Chart Analysis

The USD/JPY pair traded with a 105 handle today, again a more than 1-year low, and the trend looks clear, even as the short-term picture is oversold. Gold might also be preparing for a new multi-year high, so everything looks set for more fireworks in currencies too. Stay tuned.

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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