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Technical Analysis: NEO Surges as Rally Continues but Risks Remain High

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The rally in the segment continued without a major disruption during the weekend, and despite the stretched long-term picture most of the majors are sporting gains today, as the market cleared another important hurdle, the $600 billion mark. The advance was boosted by another BTC futures launch, with several altcoins also adding significant value to the grand total.

NEO has been among the top performing cryptocurrencies recently, and the coin surged past its previous all-time high as we expected, as bullish sentiment remained dominant. While the currency still has room to rise, as the long-term momentum indicators are not severely overbought, a likely broad correction among the coins could drag NEO lower as well. That said, the short-term picture is overbought and at least a consolidation is likely in the coming days, while the $100 level, that is the range projection target as well could be in sight before the end of the current cycle.

NEO/USDT, 4-Hour Chart Analysis

Bitcoin continued to drift higher to new all-time highs, getting close to the $20,000 level yesterday, but the momentum of the move remained weak, and the short-term MACD indicator continues to show negative divergence. With the long-term picture being severely overbought, we still expect a major correction in the BTC market, and the first strong support level is only found at $13,000 after the exponential rally. Further levels are at $11,300, $10,000, $9000, while stronger levels are found near $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

Ethereum

ETH/USD, 4-Hour Chart Analysis

Ethereum pushed to new all-time high amid the broad rally, surpassing the range extension target for the break-out and getting close to the $800 level in the process. The prior steep short-term uptrend is now broken despite the bullish move, and given the stretched long-term picture. Key support levels are now found at $575, between $480 and $500, and near the prior all-time high at $400.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is testing last week’s all-time high today after spiking as low as $250 during the recent correction, and although the short-term uptrend is broken, and the long-term picture is among the most overbought in the segment, a push to new highs is still possible. Key support levels are found at $125 and $100, with weaker levels between $250 and $260 and at $170.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is trading in a similar short-term pattern to Ethereum, and the coin also hit a new all-time high above the $1000 price level. The currency is testing the lower boundary of its prior trend channel, and despite the bullish move of the previous days, it remains on a long-term sell signal, given the overbought momentum readings. Major support levels are now found at $800, $650, $600, $500, and near $410.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple is trading in a short-term consolidation pattern after its break-out to new all-time highs. As the coin gave a long-term sell signal last week, we advise investors to wait until the next correction in the segment before adding to their positions, although traders could still play the current move with smaller positions. Major support levels are found at the prior high near $0.4250 and in the $0.30-$0.32 range, with a short-term level above those near $0.68.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic is drifting higher along the lower boundary of its prior trend channel, defying the extremely overbought long-term momentum readings. Although further short-term gains are still possible, we expect a deep correction in the coming weeks, and investors should stay away from new positions here. Support levels are now found at $32. $30, $23 and $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero continued to hit marginal new highs despite the momentum divergence, similarly to Bitcoin, while the short-term uptrend remained clearly intact. We still expect a deep correction in the coming period, with key levels now found at $300, $240, $200, $180, and $150.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA bounced higher within its broad consolidation pattern after clearing the extreme short-term overbought readings, with the help of the broad rally in the segment. Despite the bounce we expect the correction to continue, with as the long-term picture remains stretched, with strong support still only at $3 and $1.5, and potential Fibonacci support at $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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4.6 stars on average, based on 348 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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6 Comments

6 Comments

  1. MinerMatt17

    December 19, 2017 at 1:31 am

    This is like a broken record. New highs but the correction is coming…

    • douglash

      December 19, 2017 at 2:04 am

      I agree. While it’s probably a necessary reminder not to get to exuberant, at this point, they’re clearly missing something. I’d like to hear Hacked’s take on why the market isn’t correcting as TA would suggest. I feel something else is happening here with so much new money flowing into the market. I’d like to feel like Hacked has a better bead on the mechanics.

    • scottolson

      December 19, 2017 at 2:24 am

      The correction is always coming, Maybe It’ll take a 3-4 years or more to be reached.

      • MinerMatt17

        December 19, 2017 at 3:36 am

        That’s not a correction, that’s just economic cycles. You sound like the starks, of course winter/correction/recession/whatever is always coming.

        I don’t pay good money for someone to warn me 4 years before a correction….

  2. khaddafi

    December 19, 2017 at 6:22 am

    From my last experience we should start to worry about bloody delayed corrections coming when the btc price makes storming moves of 2k in short periods

  3. craiglguthrie@gmail.com

    December 19, 2017 at 12:09 pm

    Why don’t we buy gold when it drops to a dollar – that will be a great dip! Insert image of skeleton at keyboard covered in cobwebs

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Analysis

Ethereum Making a Decision Where to Go

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Ether is losing its value slightly today on Sep 19, trading at around $207.98. Losing 0.25% on Wednesday is not that surprising after a very hard Monday (although Tuesday was neutral). The crypto was above $210 when the session started, but then failed to stay near the local highs, says Dmitriy Gurkovskiy, Chief Analyst at RoboForex.

On H1, the bearish trendline is at $216, which is confirmed on D1. The resistance levels at $216 and $220 are strong, and they must be broken out in order to go up or at least pull back upwards.

In case Ether fails to find any drivers, it will likely consolidate at around $205. This is exactly where the key support lies, while the resistance is at $216, as mentioned above.

The MACD is negative on D1, moving along the signal line, still giving a moderate buy signal, while the Stochastic is not going anywhere and is not issuing any signal, while being in the positives.

Lately, Ether is very much volatile, with no certain direction. Last week the cryptocurrency spiked 32%, but early this week it reverted and started falling. Ether is vulnerable to the general negative sentiment in the crypto market, although the inside news influence it, too.

People are waiting for the Constantinople update, as well as for the introduction of Ether futures on CBOE which should take place before the end of the year. Meanwhile, low activity in ICOs does no good to Ether’s price either.

Recently, news has come that the Ethereum network reduced its reward for mined blocks, from 3 to 2 ETH. This nearly equals the profits of Ether and Bitcoin miners, so some ETH miners are sure to switch to Bitcoin after this happened, especially those that are unable to cover their costs and expenses (and there are quite a few).

The only positive piece of news now is the pending payment option in MyCrypto wallet designed by Ethereum. This option enables scheduling the payment date and time, which simplifies matters when it comes to recurring payments, such as subscriptions.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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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4.4 stars on average, based on 7 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Analysis

Crypto Update: Market Remains Weak Despite Ripple’s Surge

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Ripple made headlines today in the cryptocurrency segment, as the third largest coin jumped by more than 15% after trading in a narrow range for several days. Most of the major coins joined the rally, but the gains were muted and the technical setup remained unchanged in most cases, with the long-term outlook still being bearish, while the short-term picture remaining mixed.

Ethereum, which has been in the center of the trends in the segment for weeks rallied back above $200, but stayed below the recent swing high, leaving several questions unanswered concerning the short-term trend. Bitcoin also got stuck near the $6275 level yet again, and the total value of the market is still below the $200 billion mark, with still no clear signs of major capital inflows in the segment.

ETH/USD, 4-Hour Chart Analysis

Ethereum quickly recovered above $200 after dipping below the weekend lows yesterday in late trading, retaining the short-term buy signal in our trend model. That said the coin still needs to show stronger bullish momentum to avoid a resumption of the clearly declining long-term trend. As sustained dip below $200 would still warn of a move to last week’s lows, while a move above $235 would open up the way towards $260 and the confluence resistance near $275.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been showing weakness in the last couple of days, and although the coin is still on a short-term buy signal, similarly to Ethereum, a quick recovery above $6500 would be needed to avoid a bearish turn.

Traders should hold on to their positions here, but given the still bearish segment-wide trends, we still don’t advise full positions even in the stronger coins. Below $6275, weaker support is found at $6000, close to the key long-term zone near $5850, while resistance is ahead at $6500, $6750, and $7000.

Ripple Needs Follow Through For a Buy Signal

XRP/USDT, 4-Hour Chart Analysis

While today’s spike in Ripple is encouraging, the coin needs to show further signs of strength, as the recent sudden spikes in the majors were quickly sold as the bearish trend remained dominant in the segment.

With that in mind, despite the broken resistance levels, XRP remains on a neutral short-term signal in our trend model, while still being bearish from a long-term perspective. The coin is currently trading right at the $0.32 level, with support found at $0.3130, $0.30 and near $0.30, while strong resistance is ahead at $0.35.

DASH/USD, 4-Hour Chart Analysis

Dash is among the stronger coins from a short-term technical standpoint, trading in a bullish consolidation pattern just below the key $200 level. That said, the coin failed to show strength today amid Ripple’s rally, and that still points to a dominant bearish trend in the segment. With that in mind, traders should wait for further positive signs before entering new positions, especially since a bullish leadership still hasn’t developed.

IOT/USD, 4-Hour Chart Analysis

IOTA is still weaker than average, together with NEO, EOS, and ETC, and the coin is still just above the August lows, clearly being in a broad downtrend, despite holding up above the lower boundary of its short-term range. A test of the lows is likely in the coming weeks, and the coin remains on sell signals on both time-frames, with support found between $0.455 and $0.475, and near $0.405, and with key resistance ahead near $0.57 and $0.64.

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 348 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

NIO Means Tesla Monopoly Ends

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

On Sep 12, NIO made its IPO on the NYSE, which is a very important event for all automotive investors. Founded in 2014 by William Lee, NIO is one of the first companies to compete with Tesla in the premium electric car segment. NIO is based in Shanghai, China, and it already got investment support from such renowned companies as Baidu, Lenovo, Temasek, Tencent, Sequoia, and others.

There are currently over 4,000 employees at NIO.

In June 2018, the company started selling NIO ES8; currently, 481 electric cars have been sold and 17,000 more have been pre-ordered. This is Tesla Model X’s direct competition, while its price is twice as low thanks to some good support from the Chinese government, which is interested in promoting electric cars.

NIO ES8 starts from $67,000 (basic configuration). It has two engines of 635 horsepowers and can ride 355 km before charging. A good difference from Tesla is an option to use replaceable batteries; the monthly subscription is $193, and it takes just around 3 minutes to replace a battery. Tesla planned to offer this option, too, but did not implement it.

The underwriters of NIO at NYSE were BofA Merrill Lynch, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley, and UBS. The initial price per share was $6.26. During the first day, 160M of shares were sold, which allowed NIO to get around $1B and get a place in top US IPO’s rating in 2018.

During the first day, the share price increased to $7, while the next day it jumped above $13, allowing investors to make over 100% profit. This shows investors are very much interested in the company, perhaps because of the good pre-IPO promotion. Before buying NIO shares now, though, one should wait first for the volatility to calm down.

Comparing Tesla and NIO is not the best job now, as Tesla already has over 14-year experience; however, this comparison may well become valid in a year or two, when more data arrive. While NIO is just starting out, its management may make accidental mistakes.

The lockup period (the period during which investors are not allowed to sell their shares) is 180d, which may additionally support the price, while after that the Q2 results will come out. Among NIO’s advantages, one may name government support as one of the biggest. While the trade war between the US and China is here to stay, the demand is high, and company may cater to Chinese customers first. When it starts conquering the US market, though, the conflict may have already come to an end. The company also admits that the customs duties may indirectly influence the car prices.

The issues NIO might face are already known, and the most obvious one is that of meeting the demand. Over the first 6 months of 2018, NIO had a loss of $502M, while the profit earned afterwards is currently just $7M.

Another risk is in the news that Tesla has come to an agreement with Shanghai authorities to build a car factory in the city, which means high competition for NIO. Still, NIO is likely to win thanks to the price, as the parts for Tesla are produced in the US only, and they are subject to customs duties.

NIO management also announced they had had no mass electric car production experience before, and this may have negative influence on the company growth – an issue already overcome by Tesla. Finally, for ES8, there are around 1,700 used coming from 160 vendors; with so many suppliers, delays in shipments may become quite a common thing.

Many things depend on how NIO is going to rise its production volume and how true the declarations of the management are. Previously, we’ve seen how Elon Musk’s words were sometimes very different from what happened in fact.

One of the key topics here is financing, as the development will require a lot of money. Even Tesla has failed to book net profits so far, its losses and debts still growing.

NIO shares are likely to rise in the short term, as investors will be playing on the fact the company is quite promising at first sight. Other conclusions may be only made after there are at least some financial data at hand.

Technically, there are two support levels for NIO: one at $7 and another at $9.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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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4.4 stars on average, based on 7 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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