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Technical Analysis: A Durable Low Might be in as Bitcoin Hits $7650

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Cryptocurrencies got slaughtered in the first two days of February, with this morning’s sell-off closely resembling a wash-out liquidation event. While a confirmed trend change is far away, given the technical damage that the coins suffered, today’s panic low could be a significant bottom or the start of a more complex bottoming process.

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With all that in mind, short-term trades should still expect wild swings and high volatility, but long-term investors could add to their holdings in the already oversold coins on the short-term sell-offs.

Bitcoin turned higher during today’s bounce almost perfectly form the $7650 level that we have been monitoring as a possible target, but as the downtrend is still intact, another test of that level or a spike below it is not out of the question.

That said, the long-term picture is now clearly oversold, and the short-term setup suggests a durable bounce too. Resistance is ahead at between $9000 and $9200, and at $10,000, while primary support below the lows is in the $6750-$7000 zone.

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BTC/USD, 4-Hour Chart Analysis

Ripple plunged all the way to the $0.68 support during the crash, and now it is hovering around the prior low near $0.85. The coin is oversold from both short- and long-term perspectives, and we expect a durable rally in the coin soon, with resistance levels ahead at $1, $1.25, and $1.5. Below $0.68, the only significant support is found at $0.42.

XRP/USDT, 4-Hour Chart Analysis

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum only re-tested the previous low today, hitting a marginal new low below it, bringing the long-term momentum indicators close to neutral territory. That said, we expect the correction to continue in the coin, as it is in an earlier phase of its cycle than the rest of the market. Primary support is just below the current price level at $850, while further support levels are found at $625 and $575, with resistance ahead at $1000.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin tested the $100 level during the crash as we speculated, after plunging below the $125 level in early trading. The long-term picture is now oversold, and the final low might be in. Long-term investors could still add to their holdings on the short-term sell-offs, and aggressive traders could also open speculative positions near the main support levels, with resistance ahead at $140 and between $170 and $180.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash spiked below the $500 support level and the long-term rising trendline today, but it recovered quickly together with the broader market, and the low might have marked the end of the correction. That said, a longer bottoming process could be ahead, and a test of the low is still possible. Resistance is ahead between $600 and $650 and around the $825 level.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic hit the primary support level below the prior all-time high near $18 during the crash before recovering to the $23 level. The coin likely hit a durable bottom today, but the downtrend is still clearly intact, and traders should wait for a trend change before entering full positions here, while investors could add to their holdings.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero tested the $200 level as we expected, and hit a low near $190 during the crash, and bounced back to the prior low at $240 following the bottom. While the cycle low might already be in, a longer bottoming process could be ahead, with key resistance ahead at $280, $300, and $330 and further support near $175.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is still in a similar position as Ethereum, being in an earlier phase of its correction, although the coin did breach the $100 level already as we expected. Despite the already deep correction we expect the move to continue, and traders and investors should stay away from entering new positions, with further support levels found at $80, $64, and $56, and key resistance ahead just above $150.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA turned almost precisely at the $1.5 level that we have been pointing out for weeks, and the coin might hit the final bottom of the cycle today. While a longer bottoming process is possible, long-term investors could add to their positions on the short-term sell-offs, as the currency is now oversold from an investment standpoint. Support below $1.5 is at $1.1, while resistance is ahead near $1.9, $2.20, and $2.35.

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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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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4.7 stars on average, based on 96 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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