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Technical Analysis: Dash Hits New All-Time High as Bitcoin Chaos Persists

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The Bitcoin vs. Bitcoin Cash showdown has been undoubtedly the main event in the crypto segment during the weekend, but altcoins have also been active, with several of the majors experiencing heavy trading. Dash was among the biggest movers, as the coin that we have been monitoring as one of the most bullish coins from an investment perspective, delivered a huge break-out to new all-time highs.

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The price of the privacy-centered currency surged past the $400 level with ease and hit a record high near $500. While the long-term picture is still not overbought, investors should now only hold on to their positions, while traders could still enter new positions during short-term corrections. Support levels are found near $400 and $360, while targets for the move are at $515, $540, and near $580.

DASH/USD, 4-Hour Chart Analysis

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As the combined value of BTC and BCH stagnated, altcoins gained relative strength, but the performance of the majors was divergent. IOTA and Monero joined Dash among the strongest coins, while NEO and ETC were weaker, and Ripple, Ethereum, and Litecoin were neutral amid the turmoil. As trading activity is expected to remain high, with higher than usual volatility, let’s see the crucial short-term charts in detail.

Bitcoin

BTC/USD, Daily Chart Analysis

Bitcoin fell 20% in the volatile correction as Bitcoin Cash went parabolic, and touched $5500 while reaching a short-term oversold state. The most valuable coin bounced back hard today in early trading and it’s already trading at $6700, the main target for the oversold rally. That said, the daily chart remains bearish, and we expect another leg lower in the correction. Key support levels are found at $6000, $5800, and $5400, while primary resistance is ahead at $7000.

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum is gaining relative strength after being the island of stability during the weekend, and it remains in a long-term rising trend, despite the recent tests of the dominant trendline. The coin still faces strong resistance at $330, $350, and $380, but it could be one of the main beneficiaries of the Bitcoin instability from an investment perspective, and a move towards the all-time high near $400 remains likely.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin acted similarly to Ethereum in the recent period, although form a long-term perspective it remains relatively stronger than the number two coin. LTC tested the $56 support successfully again, and we expect a rally above the key $64 level soon, as the short-term MACD is back in neutral territory. Targets are still ahead at $75, $82.50, and near $95, while further support is found at $53 and $51.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple has been among the less active coins during the weekend, despite the spikes lower, and it remains stuck near the $0.20 level. While the long-term picture continues to favor a move towards the $0.26 and $0.30 levels, more consolidation is likely in the current range. Support levels are still found just below $0.20 and at $0.18, with key resistance found in the zone around $0.2250.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic entered a volatile short-term correction yet again after the second leg of the explosive break-out that carried the coin way above our target at $18, reaching briefly above $20. The currency is now below the previous target level at $16, and the long-term picture still points to a coming test of the $23 level. That said investors and traders should expect high volatility, so positions sizes should be controlled.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero remains one of the strongest looking currencies together with Dash, and we still expect a move above the all-time high near $150 during the current leg higher. The coin cleared the $125 target in weekend trading, and it remained in the long- and short-term bullish setups. Key support is found below $125 at $100, while a break-out to new highs would have targets near $175 and $220.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is still relatively weak compared to the other majors, trading near the crucial $27 support/resistance level again, although the spikes towards $25 were quickly bought. Investors could still add to their holdings here, but traders should wait until a bullish move before entering new positions. Key resistance levels are still ahead at $30, $34, and $40.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA remained strong in the volatile environment and it remains poised for a move towards the $0.75 target. While the long-term picture is not overbought yet, this is not the best time to enter new investment positions. That said, traders should still buy the dips, as the short-term trend is clearly intact, with support levels at $0.56 and between $0.45 and $0.48.

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

The Crypto Correction: What You Need To Know

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In the short span of about 24 hours prices of cryptocurrencies have fallen like a stone. Investors have either given back or taken losses of sizable amounts. Measuring the one-day drop: bitcoin -21%, Ether -29%, Litecoin -29%.

From its December all time high near $20,000, bitcoin has given back more than $200 billion in value. This amounts to more than 80% of the companies on the New York Stock Exchange or Nasdaq. Even for those who have experience-trading crypto, the events of the last few days can challenge nerves.

What is the right plan of action? Possibly no plan at all, by that I mean sitting tight and doing nothing, could be the best plan. What ever you choose, the first thing to do is to shut down your computer and turn off CNBC. These are all entirely emotion driven groups and right now they are making loud negative headlines reminding us of quotes from JP Morgan CEO Jamie Dimon and Warren Buffett.

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The same sources are painting a dark case today. These are the very same folks that were gaga over crypto last year while prices were rising. Now these sources are quoting Warren Buffett who predicted with a high degree of confidence that cryptocurrencies will have a bad ending.

If you listen to Christopher Harvey, Head of Equity Strategy at Wells Fargo, you get an even more dire prediction. He recently appeared on CNBC stating that the cryptocurrency price correction could spill over into the overall stock market.

There is a rule of thumb on Wall Street. If you are right 51% of the time, you are considered an investment genius. This means most opinions are wrong at least half of the time. This could be the case with today’s crypto naysayers.

Prices And Business Fundamentals Don’t Always Match

The number of true experts in cryptocurrencies is small relative to the number of investors. That means there is more emotion than usual driving prices in both directions. It is this volatility that keeps certain investors on the sidelines.

But if you have done your research and have a view of the world in 2028 short-term volatility is not your enemy. Warren Buffett, the biggest crypto naysayer is a master of long term investing. During the 2008 financial crisis, when the world was close to the brink of financial disaster, Buffett was standing by with billions to loan Goldman Sachs charging an outrageous 10% rate of interest. There is a lesson for us here.

Don’t Get Distracted By Short Term Issues

Korea is a big market for crypto demand and, along with China has produced headlines threatening to close down cryptocurrency exchanges. I have not dealt directly with any of these so the analysis of others is necessary.

These folks point out the excessive price premiums as evidence of the behavior of bad actors in the game. So any action by governments to clean up the exchanges could produce a better experience for investors. And let us not forget cryptocurrencies are global. There are plenty of exchanges in the world that make markets.

Korea does not have a monopoly on bad actors. The exchange and lending platform Bitconnect, in recent days, announced that it is closing. The company was recently served with a cease and desist order. Ethereum founders had criticized the exchange for their practices that many believe were bordering on a Bernie Madoff style Ponzi scheme.

The Tipping Point Has Been Reached

The jury is no longer debating the verdict. Cryptocurrencies have become embedded in the global economy. According to Google’s Annual Report on Search Facts, bitcoin and cryptocurrencies were the second most important topic in the world during 2017.

Bitcoin is all about fast, anonymous, low cost movement of money anywhere on the planet. Those lofty goals have not yet been achieved but with tens of thousands of businesses now accepting bitcoin including some hefty Fortune 500 companies and with the Bitcoin Lightning Network coming on, bitcoin’s shortcomings are being addressed.

Bitcoin Futures: Acceptance Is Spreading

When I learned that bitcoin futures would be traded in the US by the CME and CBOE, the only question was how long it would be before other countries recognized the legitimacy of bitcoin futures. Well, it didn’t take long. The Hong Kong securities regulators, SFC issued a report on December 11th giving investors a green light.

Within less than a year futures contracts will be available on Ethereum and possibly others.

Ethereum: The Future Is Here

Ethereum has always had a more obtuse purpose. It was never intended as a medium of exchange like bitcoin. For what it is worth, Ethereum is less likely to be singled out by governments and central banks that fear loss of economic control.

Descriptions like decentralized blockchain platform offering smart contracts and driven by Ether require some time to appreciate. Ethereum is open sourced and applications oriented. You don’t need to understand the technology you only need to envision what it can be applied to.

Ethereum co-founder Steven Nerayoff tells us the number of Ethereum projects today is already ten times the number of last year. Here are just two examples.

Unilever

Unilever, the $52+billion food and packaged goods giant, is working on a blockchain based project to better manage its massive global supply chain. So far it is only being tested but consider the size: 10,000 Malawian tea farmers. And this is just the start of their massive corporate wide supply chain. Imagine what this will look like if Unilever starts to take things seriously: stay tuned.

On The Vanguard

Now the $5 trillion Vanguard group is getting the blockchain bug.  They are the investment industry’s low cost provider. Now they are embarking on test to apply blockchain technology for data sharing.

Caveat Emptor

The reality is the cryptocurrencies are embedded in the global economy and likely to grow dynamically for a long while. This doesn’t protect us from short-term events. That is why huge price corrections are so interesting. The Warren Buffett habit of always having deep cash reserves to pounce on opportunity when frightened investors run is a strategy that has worked well over multiple decades.

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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Analysis

Technical Analysis: Bitcoin Hits First Correction Target as Volatility Reigns Supreme

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The violent correction that created a full-on panic in the cryptocurrency segment continues to unfold in a rather orderly way from a technical standpoint, reflecting the extreme nature of the preceding rally. That said, the percentage losses in some of the coins are huge, and the collapse of Bitconnect accelerated the process, spreading uncertainty among investors, and sentiment quickly got bleak.

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Bitcoin remains in the center of attention, and the most valuable coin finally breached the $10,000 level today, causing another strong wave of liquidation in the majors, that could be the base of a more durable bottom, and a consolidation in the coming days after the crazy last couple of days.

The coin is now oversold from a short-term perspective, and although further losses are likely before the end of the cycle, given the still only neutral long-term momentum readings, a counter-trend move is possible in the coming days. Below, $9000, strong support levels are still found at $8200 and near $7650.

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BTC/USD, 4-Hour Chart Analysis

Altcoins got slaughtered in the two-day crash with Ripple leading the way lower, while Ethereum also lost its relative strength amid the broad sell-off and its recent trendline break. ETH got close to the next major support level at $740 during today’s move, and as the short-term momentum is now oversold, a bounce to the zone around $1000 could be ahead. We still expect the correction to continue in the token, as the long-term momentum remains overbought, with key support at $625 and near $575.

ETH/USD, 4-Hour Chart Analysis

Ripple fell as low as the $0.85 support level during the crash, and although the coin rebounded above $1 afterward, it remains 70% off its recent all-time highs. Long-term investors could already accumulate small positions on the short-term sell-offs, although the correction will likely continue, and a prolonged consolidation phase might also be ahead. Key support levels are now found at $0.85 and $0.68, while resistance is ahead at $1.25.

XRP/USDT, 4-Hour Chart Analysis

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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

Market Update: Bitcoin at $10,000, Ripple at $1, Ethereum below $1000 as Carnage Continues

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Yesterday’s China induced technical breakdown led to an unmitigated disaster in the crypto segment, as all of the majors crashed, erasing hundreds of billions of market cap in the process. The collapse of the alleged Ponzi scheme of Bitconnect added insult to injury and caused another wave of selling in late trading, driving the price of Bitcoin to $10,000, a bit earlier than expected.

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BTC/USD, 4-Hour Chart Analysis

The most valuable digital currency rebounded as much as 15% after the late-session crash, but the selling pressure remained strong and today BTC briefly traded below yesterday’s low, with most of the majors holding up above the crash low.

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That said, the sell-off is unlikely to be over and volatility is probably here to stay for the week, with violent swings in both directions. The coin is still likely to push lower, with a possibly lengthy bottoming phase, so a quick recovery to the record highs is unlikely, but strong support is found below $10,000 at $9200, $8200, and $7650.

Traders should be aware of the elevated risk in short-term positions here, while long-term investors could slowly accumulate positions on the sell-offs, as the coins are headed to oversold territory.

A Little Perspective

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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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10 votes, average: 4.90 out of 510 votes, average: 4.90 out of 510 votes, average: 4.90 out of 510 votes, average: 4.90 out of 510 votes, average: 4.90 out of 5 (10 votes, average: 4.90 out of 5)
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