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Technical Analysis: IOTA Goes Berserk as Bitcoin Defies Gravity Again

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The late-stage rally in the segment continued, as buying is concentrated in fewer and fewer names, with the rest of the majors experiencing capital outflows, as they are already entering a correction. The most valuable coins extended its historic rally above the $13,000, after moving out of the usually bearish rising wedge pattern.

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BTC surpassed all our expectations for the current leg higher, as the financial mainstream focused on the cryptocurrency, driving prices to extremely overbought levels. Despite that, we still expect a deeper correction in the coming weeks that could be devastating to the late buyers of the rally. Major support levels are found near $9000, $8200, $7700, and $7000.

BTC/USD, 4-Hour Chart Analysis

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Ethereum is leading altcoins lower, with the exception of IOTA and Monero, although those two coins also turned lower in the second half of the session. The second largest coin failed to reach last week’s highs and turned lower off the primary target for the cycle yet again, as selling pressure intensified today. The coin is still above the initial break-out level at $400, but during a likely deep correction in the coming weeks, a test of the $380 and $350 supports is possible.

ETH/USD, 4-Hour Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin turned lower together with the majority of the coins, but the coin is still trading in the close vicinity of the $100 level and the all-time highs. LTC is likely to follow the market in the likely deeper correction, and a re-test of the $75 ore even the $64 support is possible in the coming weeks, with the long-term picture being overbought, although the short-term uptrend is still intact.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is ahead of Litecoin in the cycle, as it already broke below the short-term uptrend, while being more than 10 percent below the all-time high of last week. The currency remains dangerously overbought from a long-term perspective, and investors should wait for more favorable conditions to add to their positions, with support levels near $600, at $500, $470, and around $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple is still showing relative weakness, and the coin fell below the weak short-term uptrend today following the broader market lower. We still expect volatility to pick up again, with key support levels near the current price, just below $0.20 and at $0.18. Target levels are ahead at $0.26 and $0.30, and the long-term momentum is still neutral.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic also faced selling pressure today, as it drifted back under the $30 level, trading right at the short-term trendline currently, with the long-term setup still being severely overbought. We expect a dip below the previous all-time high at $23 during the next correction, with further strong support found at $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero pushed to yet another new all-time high as momentum players rushed to the market, and the coin surged as far as $300 before turning sharply lower towards the end of the session. The currency is still in a strong short-term uptrend but investors should wait for a correction before opening new positions as the long-term picture is overbought. Major support levels are now found at $200, $180, $150, and $125.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO continues to trade in a volatile range, as the brief calm period ended today, and the coin turned lower yet again, leaving the narrow range around the $40 level. The currency is likely to remain volatile as the broad correction runs its course and the re-test of the $34 level is likely with the $30 level also being in sight. The long-term setup remains encouraging and we expect a rally towards the all-time high following the correction.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA rallied off the charts as the rally entered a parabolic phase, with the coin almost reaching the $5 level, while taking over Ripple in the list of the most valuable coins. The currency is still likely to enter a sharp correction soon, but the short-term uptrend is still intact. Due to the nature of the rally only minor support levels are found at $3.50 and $2, with the first major technical level found at $1.50.

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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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3 Comments

3 Comments

  1. ezra

    December 7, 2017 at 1:56 am

    Hi, id like to get into IOTA what do you think a good entry Point is? you think i should wait until it hits a correction?

  2. saxonlucius

    December 7, 2017 at 3:44 am

    You have been saying this for a week now, and you make it sound like it is imminent every time. It is very frustrating. It’s ok to say you dont know instead of creating an atmosphere of sell sell sell. You bragged about your charts getting recognition by a couple publications. Good. I think you do a great job, but I think you may want to leave personal opinion out of it, and only state the facts with statistical probabilities. Good probabilities. Turn high entropy into low entropy. This is our purpose as human beings. Your charts have been proven wrong many times. I like your work, but I wish you would stay a little more focused on the statistic and the analysis. You can imagine, people go based on what you say, so you should probably take a wider view and establish more sources. I feel like you are informed, but you can probably be much better informed. We pay for this information. Get in touch with the right people and I think this could be a multimillion dollar profiting operation. I’d be happy to help you. lol. Good job, but no one could have imagined what happened to Bitcoin the last few days. Its unprecedented and and almost unbelievable, and this is only the start. More sources, facts, less braggadocious talk, and shoot for about 90% of all the projections should be correct, even if it means 5 less articles. That would be worth it.

  3. saxonlucius

    December 7, 2017 at 3:49 am

    Oh, since we are on the topic…. does anyone know when this impending correction of $4500 (as of 8:46pm EST/ 20:46pm EST) is suppose to happen. I want to put a huge short in, already have 3 times and lost over $1000 each time. So I want to catch this ride down and bring it is baby. I cant pinpoint when this is going to happen. Maybe it wont happen at all.

    Does anyone know when the actual correction will happen, and when I should enter a large short?

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Analysis

Daily Analysis: Stock Rally Fades as Walmart Weighs on Sentiment

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2715 -0.73%
DAX 12,487 0.81%
WTI Crude Oil 61.56 0.02%
GOLD 1331.00 -1.84%
Bitcoin 11720 6.24%
EUR/USD 1.2336 0.61%

It’s been another very hectic session in US equities, with the main indices diverging substantially, as it has been the case ever since the market made it back to the key break-down levels of the crash two weeks ago. The rally through those key levels was not an easy feat, as we expected, and although the Nasdaq cleared the hurdle last week, and even added a bit to its gains today in early trading, the S&P 500 and the Dow failed to follow the tech benchmark.

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S&P 500, 4-Hour Chart Analysis

The Dow has been pushed lower by Wal-Mart (WMT) throughout the day, as the retail giant (now officially named Walmart) disappointed with its earnings report, with especially the crucial on-line segment missing the growth estimates, putting WMT’s quest against Amazon into doubt. Jeff Bezos’s crown jewel popped higher after the release and that helped to widen the gap between the Dow and the Nasdaq.

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WMT, 4-Hour Chart Analysis

A monster-sized Treasury issuance was the other main event of the day, as bond markets are still nervous because of the rapid rise in yields, but the market absorbed the bonds without any major issues and yields finished the day little changed.

We maintain our bearish short-term view on stocks, despite the strength in the Nasdaq, and a test of the correction lows still seems likely in the coming weeks, but as the long-term uptrend is still intact short positions should still be treated as counter-trend trades, with strict risk management.

Forex Markets and Commodities

EUR/USD, 4-Hour Chart Analysis

The Dollar, which rallied strongly in early trading, remained stable compared to its main peers amid the Treasury issuance and the stock sell-off, with even the safe-haven Yen failing to rally against the Greenback. The reserve currency gained significant ground against commodity-related Aussie and Loonie too, and we expect that trend to continue, should the re-test in the stock indices materialize.

Oil had a mixed session, with an early rally and a late sell-off, similarly to stocks, as the further escalation of the Syrian conflict remains a gloomy option for the Middle East, while the broader market trends and the US supply surge are pushing the price of crude lower.

Gold also pulled back yet again of its rally highs, continuing its correction, as the Dollar strength hurt precious metals despite the late-day risk-off shift.

Cryptocurrencies

The segment had a mixed day, with Bitcoin gaining and most altcoins losing ground, in the wake of the bullish news flow surrounding the largest coin. The slight increase in volatility in US stocks “spilled over” to the crypto market in late trading, with most coins finishing the US session on a negative note.

While the losses were relatively small in most valuable digital currencies like Ethereum, Ripple, NEO, Bitcoin Cash, and Cardano, the real outlier was Litecoin, which pushed above $250 after breaking-out from its short-term correction, while also weathering the late-session sell-off.

Stellar/USDT, 4-Hour Chart Analysis

Stellar and IOTA were the weakest majors, losing more than 5% on the day. Stellar now gave back most of its post-crash relative strength, as it remains stuck in a broad declining trend, although it is still well above the crash lows, and a break-out remains likely in the coming week, similarly to the other slightly lagging coins.

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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

Technical Analysis: Bitcoin Still Pushing Higher as Altcoins Mixed

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The day that kicked off in a bullish fashion for cryptocurrencies turned slightly negative for the majority of the coins in the second half of the session, as US stock markets re-opened after the long weekend. Bitcoin, Ethereum Classic, and Litecoin were the early leaders of the segment, but only the most valuable coin stayed bullish throughout the session, as both LTC and ETC ran into resistance in the second half of the day.

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BTC, which was boosted by the positive news regarding the Bitcoin Core Wallet’s SegWit introduction, topped $11,700 for the first time in more than a month, and the coin is getting close to the $200 billion mark in market value yet again.

BTC/USD, 4-Hour Chart Analysis

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As the currency hasn’t completed the previous short-term correction, with the MACD indicator still showing overbought readings, another pullback in the coming days wouldn’t be a surprise, but the short-term uptrend is clearly intact.

The $13,000 and $14,250 levels are ahead as the next major targets, with a weaker level near $12,000, while support is now at $11,300, $10,000 and between $9000 and $9200.

ETH/USD, 4-Hour Chart Analysis

As we mentioned, Litecoin and Ethereum Classic both pulled back in late trading, while the largest altcoins, Ripple and Ethereum failed to rally in the first place, as the majors are diverging considerably. XRP and ETH drifted sideways throughout the session, while turning slightly lower later on and Ethereum is still struggling with the strong resistance ahead.

The declining trendline is just above the current price level, and the short-term relative weakness reinforced our view that further correction is likely before a clear break-out, with key support levels found at $845, $740, $625, and $575, and resistance above the trendline at $1000 and $1175.

(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 Return on a Bearish Note after Long Weekend as Dollar Rallies

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After the hectic session on Friday, US equities took a long break thanks to the Presidents’ Day yesterday, but the technical setup that we have been monitoring remained intact. The major indices formed a short-term top exactly in the Line-In-The-Sand area that seemed likely to stop the post-crash rally at least temporarily.

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S&P 500, 4-Hour Chart Analysis

The key levels to watch during today’s session will likely be 2735 and 2700 in the S&P 500 (25350 and 24800 in the Dow), but below 2735 the benefit of the doubt is on the bears’ side.

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So short-term, we continue to lean on the bearish side here, at least short-term and we expect the market to head for a test of the correction lows in the coming period. European and Asian markets continue to underperform their US peers, despite the strength in the Dollar, and that doesn’t bode well for bulls, as Europe has been spearheading the decline so far.

Dollar Still in the Center of Attention

EUR/USD, 4-Hour Chart Analysis

Europe bounced higher today following the release of the better than expected (but worse than the latest) German ZEW Economic Report but that didn’t stop the drift lower in the common currency. The EUR/USD pair fell back below 1.2350 after the fake-out on Friday that indeed proved to be a bull trap as we speculated, and a test of the rising trendline is now possible in the coming days.

USD/JPY, 4-Hour Chart Analysis

On a positive note, the main safe-haven assets, the Japanese Yen and Gold, are also losing ground to the Greenback today, and that could point to a less significant shift in the risk appetite of investors.

That said, commodity currencies are still under pressure, and they have been a good proxy so far for judging the risk-on/risk-off divide, and with oil and copper turning lower this morning, another round of selling could be underway.

WTI Crude Oil, 4-Hour Chart Analysis

Looking at the bond markets, rates are edging higher across the yield curve and the Volatility Index (VIX) is also on the rise again, and all looks set for another active day in US markets, with plenty of trading opportunities in equities and currencies alike.

We expect Wednesday to be the most interesting day of the week, as the arguably most important release, the FOMC meeting minutes will come out in late trading. Until then, the volatile, technicals-led trading could continue.

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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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4.7 stars on average, based on 101 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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