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Technical Analysis: Quiet and Choppy day in Crypto-Land

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The tug of war that we described in yesterday’s analysis continued in earnest in the cryptocurrency market, as most of the major coins remained in low-volatility holding patterns, leaving the technical setup largely unchanged.

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The dominant short-term triangle pattern in BTC is noticeable in most of the major altcoins too, and that points to a more significant move in the coming day or days in the most valuable coin and the broader segment.

BTC still faces strong resistance between $9000 and $9200, with a declining trendline also adding supply in that zone, and should the coin successfully break-out above it a quick rally to $10,000 is in the cards.

As of now, the short-term outlook is neutral, and given the still intact long-term downtrend, short-term traders should still be cautious, even as a bullish outcome is more likely here. That said, as we don’t expect new lows in this cycle, long-term investors could still add to their holdings, with primary support still found at $7650, and other important zones between $6750 and $7000, and near $6150 and $5750.

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BTC/USD, 4-Hour Chart Analysis

Ethereum is trading in a similar consolidation pattern to BTC with the $850 level being in the center of attention. The coin is hovering around the midpoint of the dominant declining trend channel, reinforcing the neutral short-term picture. As the long-term picture continues to be positive, we expect a break-out from the downtrend without hitting a new price low, even as the bottoming process will likely remain choppy, with volatile dips. Primary support is at $740 with further levels at $625 and $575, while resistance is ahead at $1000 and $1175.

ETH/USDT, 4-Hour Chart Analysis

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is slowly building up relative strength again after a corrective period, as it is trading close to the $170 level, the lower end of the primary resistance zone that capped the advance in the last couple of weeks. As the coin was among the leaders of the bounce off the lows, LTC renewed strength would point to another advance. Further resistance above the $180 level is ahead near $200 while support is at $140, $125, and $100.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash continues to be among the weaker majors, still consolidating its gains, being in a slightly worse technical position compared to LTC. That said, we expect the coin to remain well above the prior lows, and investors should continue to accumulate Dash on the short—term sell-offs, while aggressive traders could also be looking for entry points. Key support levels are found at $500, $410, and $360, while the coin is trading right in the $600-$650 resistance zone, with further levels ahead at $825, $950, and $1000.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple is also slightly weaker than most of the majors following a very strong post-crash rally, and the coin remains stuck near the key $1 level. We expect the consolidation to continue in the coin before a durable rally, but even a re-test of the lows is unlikely.  Further support levels are found at $0.85 at $0.68 and $0.57, with key resistance ahead at $1.25 and $1.5.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

ETC has been the clear bullish outlier in recent days, already showing strength last week, and now it reached the strong $32-$34 resistance zone after breaching the declining trendline. While a short-term correction is likely soon, the dips could still be used to accumulate the coin, and traders should also be looking for entry points near the main levels, although as volatility could increase again, leveraged positions remain risky.  Key support is now found at $30, $27, and $25, and while resistance above $34 is ahead near $40 and $43.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero continues to slightly lag the broader market, similarly to Dash, trading close to the dominant declining trendline after its strong rally. The coin remains in an encouraging position regarding the long-term outlook, and investors could still use the short-term dips to add to their holdings. The currency is hovering just above the primary support near $240 level, with further levels at $200, $175, and $150, and with resistance ahead at $280 and $300.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO has been the least volatile major in the last couple of days, hovering around the $110 level, while the long-term picture is still slightly worse than in the case of the rest of the segment. While we expect the coin to lag the segment in the coming weeks, investors could add to their holding on the short-term dips, but traders should wait for a better long-term setup. Resistance levels are still ahead at $125 and just above $150, while support is at $100, $80, and $64.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA remained relatively weak, trading well off last week’s highs, as it is still consolidating the strong rally. While traders should still remain cautious with new positions before a confirmed trend change investors could use the consolidation to boost their holdings on the downswings.  Key resistance is still ahead near $1.9, with further resistance near $2.2 and $2.35, while primary support is found at $1.5.

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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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Analysis

Pre-Market: Bulls Try to Fight Back after Ugly Overnight Session

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Following the steep late-day downturn on Wednesday, which followed the not-to-hawkish FED meeting minutes, Asian markets and US equity futures continued lower with a vengeance. The very active overnight trading is another sign of the regime change in traditional financial markets that we have been monitoring for the last two weeks, ever since the “Black Monday of 2018”.

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Dow Futures, 4-Hour Chart Analysis

EUR/USD Changing Behavior

The European session brought about an oversold bounce that stabilized markets from stocks to currencies. The EUR/USD pair that has started acting “normally” considering its relationship with US Treasury yields lately, is headed south once again, trading only 0.5% above its recent correction lows after clearly breaking below the rising trendline.

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EUR/USD, 4-Hour Chart Analysis

The bull-trap that we identified a few days ago was the start of the current leg lower, and if the regime change will be persistent, the most traded forex pair could be back to the role of the “risk-on/risk-off” indicator that has been the privilege of commodity currencies in the last couple of weeks.

USD/JPY, 4-Hour Chart Analysis

The Japanese Yen is showing notable strength after its overbought dip, and the primary safe-haven currency could be in for more gains, should the risk-selloff continue. The Yen also gained ground on the common European currency, following the dovish ECB meeting accounts and the misses in the German IFO business climate indicator and the British GDP, which all question the European growth-monetary tightening narrative.

Canadian Dollar in for a Wild Ride

USD/CAD, 4-Hour Chart Analysis

With the Canadian retail sales report and the US crude oil inventory data coming out soon, forex traders should expect sizeable moves in the recently weak currency, while the USD should also be very active during the US stock market session.

All eyes are on Treasury yields again, with the slight correction today helping the bounce in stocks and other risk assets. The Nasdaq could be the motor of a stronger rally on Wall Street, but we wouldn’t bet the house on that, as the short-term technical setup remains bearish, and a re-test of the correction lows is still the most likely scenario for the coming weeks.

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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

Crypto Update: Bitcoin Tests $10,000 amid Correction

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The altcoin-triggered correction continued in the segment overnight amid the renewed sell-off in global stocks, with a slight bounce in Asian trading and a subsequent dip after the European open. The major coins are all down by more than 5% since yesterday, but for now, the momentum of the move is not worrying, and most importantly the leadership of the rally is holding up relatively well.

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Bitcoin bounced off the key $10,000 level, the $200 support zone held in Litecoin, Monero is still in its consolidation pattern above $280, and only Dash showed deterioration since yesterday, but the long-term picture remains encouraging even in Dash’s case.

LTC/USD, 4-Hour Chart Analysis

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The above-mentioned levels in the technically strongest coins are not even the last line of defense for bulls, as the preceding strong rally left several key levels behind which could serve as the basis of the next leg higher.

Also, we expect the currently negatively diverging coins, led by Ethereum and Ripple, to start showing strength as the short-term momentum reaches oversold territory, and good entry points might be close both for traders and long-term investors.

BTC/USD, 4-Hour Chart Analysis

BTC touched the $10,000 support level, but for now, the technically more important $9000-$9200 zone is not in danger, and the short-term momentum indicators are already neutral thanks to the correction.

That said, more downside is likely in the coming days, but investors and traders should be looking for reversals to enter new positions, as we expect the uptrend to continue, with targets ahead at $11,300, $13,000 and $14,250.

Ethereum Provides a Glimmer of Hope

ETH/USD, 4-Hour Chart Analysis

Although bears are still in control regarding the short-term picture in the second largest coin, this morning ETH didn’t hit a significant new swing low, and that could be the first sign of relative strength, with the $845 support not far above the current price level, and the MACD indicator is already near oversold territory.

Despite the slightly positive sign, short-term traders should remain defensive concerning the weaker coins, while long-term investors should still accumulate the currencies on the dips.

Stay tuned for our detailed technical analysis later on today.

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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4.7 stars on average, based on 107 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

Daily Analysis: The Usual Post-Fed Pump and Dump…

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2700 -0.51%
DAX 12,470 -0.14%
WTI Crude Oil 61.28 -0.83%
GOLD 1325.00 -0.43%
Bitcoin 10480 -8.71%
EUR/USD 1.2336 0.61%

The script that we laid out for the FOMC meeting minutes has worked almost perfectly, with the major US indices completing a roundtrip that triggered most of the “weak” stop-losses, before a powerful move lower into the close.

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The predictable late-session intraday volatility aside, markets were quiet and choppy for most of the day, and the Dow, the Nasdaq, and the S&P 500, all closed just slightly lower, while covering 2% during the session, with the tech-index’s relative strength evaporating in late trading.

S&P 500 Futures, 4-Hour Chart Analysis

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Forex Markets and Commodities

What drove the decline in equities was the renewed rise in US Treasury Yields, and to answer the most important question of the day; yes, in fact, the yield-Dollar correlation of the past few months broke down, and today the Greenback rallied together with bond yields.

10-Year Treasury Yield, 4-Hour Chart Analysis

While that is how it should work according to common sense and economic theory, the recent inverse correlation helped a lot of trends in reaching extremes, and those extremes now might reverse.

The outperformance of US markets, the Euro strength, and the weakness in European equities were among those trends, and it’s interesting to see that the bullish technical setup in the EUR/USD is crumbling and the US indices are in the deepest correction since the Brexit.

EUR/USD, 4-Hour Chart Analysis

While there is no assurance that these changes are permanent, for now, we remain short-term bearish on US equities, and continue to look for upside in the battered Dollar.

At the end of the day, the Dollar finished higher against all of the major fiat currencies, although the Yen showed notable relative strength amid the stock rampage near the closing bell. Interestingly the USD vs. risk-on pairs trend continues to lead the other asset classes, as we have noted several times, and that could be something to monitor in the coming days and weeks.

Commodities had a mixed but ultimately bearish session, with oil and gold suffering both suffering losses amid the risk-off shift, although crude already traded lower before the FOMC release, while gold traded in close correlation with the Euro throughout the day.

Cryptocurrencies

The segment had a decisively bearish session, with only a few coins showing considerable relative strength amid the sell-off. Bitcoin, Litecoin, Dash, and Monero are still the leaders of this cycle, while Ethereum is the most notable laggard, pulling most altcoins lower as well.

ETH/USD, 4-Hour Chart Analysis

On a positive note, the majors held up relatively well amid the stock turmoil, but the next few days will be crucial, as important support levels could be tested. That said, most of the coins are well clear of the crash lows, and there is more than enough support below that, combined with the still present bullish signs should keep investors confident that a new uptrend is underway and new rally highs are ahead.

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 107 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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