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Technical Analysis: Ripple Cracks, Bitcoin Tumbles, as Ethereum on Top Again

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After yesterday’s chaotic session, the crypto-segment had a calmer day, although the second half of it got heated again, as Ripple turned sharply lower and Bitcoin also declined. Most of the other majors are also under pressure, although Ethereum, NEO, and Monero are still relatively strong, and Ethereum Classic also popped higher.

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XRP is back below the $2 level, and this time the sell-off wasn’t triggered by a technicality, with the coin now trading 40% off last week’s all-time high. XRP remains overbought from a long-term perspective, and we expect further correction in the coin with support levels now found at $1.8, $1.50, $1.25, $0.85.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum continued to grind higher despite yesterday’s correction, hitting a new record high yet again ad stabilizing its place as the second largest coin again.  The coin is now prone to a correction after yesterday’s short-term sell signal, with the long-term momentum still being stretched as well. That said, the short-term uptrend is intact, and further gains are still possible. Key support levels below $1000 are found at $850, $740, $625, and near $575.

ETH/USD, 4-Hour Chart Analysis

Bitcoin

BTC/USD, Daily Chart Analysis

Bitcoin is testing yesterday’s lows after a choppy and bearish session, as the technicals still point to a continuation of the broader correction after the recent exponential run-up. The coin is also near the domain rising trendline that developed during the rally, and a break of the pattern is now likely with the $13,000 level now being in sight. Below that, further support is found at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

Litecoin

LTC/USD, Daily Chart Analysis

Litecoin is still among the weaker majors, with no bullish follow-up to yesterday’s bounce, as the $250-$260 resistance zone proved to be too strong for the coin. The long-term setup remains bearish, and we expect another leg lower in the correction, with a likely test of the recent lows near $180. Key support levels are found still found below that at $125 and $100.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash has been trading in a narrow range today, after a volatile period, and the coin is still holding up above the $1000 level in the face of the long-term bearish pressures. Just as Bitcoin, Dash is also likely to continue its overbought correction, and a dip below the mini-crash lows is the most probable scenario. Below $1000, further important levels are still are near $600, at $500, $470, and near $410.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic followed its big brother ETH higher, leaving the vicinity of the $34 level again, although the previous swing-high stopped the advance for now. While the short-term picture is close to a buy signal, given the segment-wide correction and the still bearish long-term setup, investors should expect another leg lower before a durable bottom. Strong support levels are still found at $30, $23, and $28, while resistance is ahead at $40.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero is still above $400 today in late trading although the coin lost some of its relative strength amid the renewed broad correction. The currency is still likely to follow the sector’s trend, as the long-term picture remains stretched, but the short-term setup is neutral for now.  Investors should still wait with opening new positions, with support levels still found at $300,  $240, $200, $180, and $150.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO hit marginal new highs today, similarly to Ethereum, but the coin is now overbought regarding both the short- and long-term picture. Investors should further reduce their positions here, although short-term gains are still possible. Important support levels are now found at $100, $80, $64, and $56.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is under selling pressure yet again, as the broad correction of the coin continues as expected. While we still expect a relatively early tradable bottom in the currency compared to the rest of the majors, a volatile period is likely ahead, and investors should wait for better risk-reward opportunities. Strong support levels are still found at $3 and $1.5, with a Fibonacci support between those at $2.35.

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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

Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

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On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

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Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

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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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4.6 stars on average, based on 256 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

Pre-Market: Oil Plunges Below $70 as Markets Mixed Before Long Weekend

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Financial markets are relatively calm today, despite the hectic week that was highlighted by the Turkish currency crisis, wild swings in bonds, and a step back in US-North Korean relations. Stock markets turned lower globally, with US equities outperforming the rest of the world, essentially drifting sideways all week long, thanks to the slight correction in the Dollar’s rally, and the dip in Treasury yields that was triggered by the dovish Fed meeting minutes.

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S&P 500 Futures, 4-Hour Chart Analysis

Today, the durable goods report came out before the opening bell and although the headline number was a tad worse than expected the more important core figure beat the consensus estimate, helping the slightly dampening economic outlook, even as yields continue to fall, especially with regards to long-dated Treasuries.

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EUR/USD, 4-Hour Chart Analysis

Although emerging market currencies are way less volatile today than recently, despite the rebound in the Dollar, equities shed their early gains and are now slightly in the red. The all-important EUR/USD pair hitting yet another 6-month low near 1.1650, and the test of the key long-term 1.1450-1.15 zone looks more and more likely in the coming weeks, even as the pair is a bit oversold.

Energy Markets in Turmoil as OPEC Signals Production Increase Again

WTI Crude Oil, 4-Hour Chart Analysis

It seems that the crude oil market is in for a strategic switch yet again, as the OPEC, together with Russia made it clear today that the price of the Black Gold finally reached a desirable level. The cartel will be targeting a higher level of output later on this year in order to keep the US shale players under pressure by capping the advance in the key commodity’s market.

The WTI contract reached a 4-year high at $72 per barrel recently and the Brent contract which is more exposed to Middle East woes rose as high as $80 per barrel after trading below the $30 level just two years ago. The last phase of the advance extended above the level where a large portion of the shale plays turn profitable, and as global growth worries also surfaced, the commodity entered a selloff this week.

Gold Futures, 4-Hour Chart Analysis

Safe haven assets continue to be bid despite the relatively calm environment, and gold hit a two-week high today despite the bounce in the Greenback as buyers are back after the wash-out plunge below $1300. With the long-term setup and fundamentals still being favorable for the precious metal, the short-term downtrend line is in danger here.

As US markets will be closed on Monday, which usually favors an active session, volatility might remain high throughout the day.

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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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4.6 stars on average, based on 256 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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Recommendations

Trade Recommendation: Intact Financial

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Technical Overview

  • Since double-bottoming in 2008 and 2009 at $26 (violet horizontal trendline in Figure 1), Intact Financial (IFC.TO) has enjoyed a four-fold increase. During the 2013, 2016 and 2018 corrections, the stock found support at a long-term trendline (support – green trendline; retests – green arrows).

Figure 1. IFC.TO Weekly Chart

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  • Zooming in, after topping in November’17, IFC completed a H&S pattern (tops – yellow ellipses, neckline – yellow trendline in Figure 2).
  • In January, March, April, and May, all up-moves halted at a well-defined short-term resistance (red trendline). Yesterday (May 25), the stock managed to break and close above the resistance.
  • Today, the stock closed in positive territory, whereas the Financial sector (TTFS.TO) declined by over 0.5%.
  • The $95 level had served as support on multiple occasions in 2018 (purple horizontal trendline and arrows).

Figure 2. IFC.TO Daily Chart

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Implications

  • The bounce off of the long-term support and the break above the short-term resistance are considered constructive.
  • The stock is expected to find support in the $95 – $96.50 range during pullbacks (i.e. at the red and purple trendlines).
  • The downward target from the H&S pattern was nearly met during the May decline (target – $92.25 – white vertical trendline in Figure 2, May 9 low – $92.65 – last purple arrow).

Outlook

  • Short-term bullish as long as the stock remains above $95
  • Long-term bullish as long as the stock remains above its long-term support (green trendline in Figure 1).

 Trade Recommendation

  • Buy the stock at current levels ($97.50 at EOD on May 24).
  • Target: Half at $101 (the January low which served as resistance in March – second red arrow). Other half at $108 (origin of the late 2017 decline).
  • Stop: Half upon a close below $95. Other half upon a close below the long-term support (currently at approximately $93.50).

Disclosure: No position yet but may initiate at any time. Will likely recommend the stock to my clients as a potential play within the financial sector.

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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4.8 stars on average, based on 12 rated postsPublished author of technical research. In his work on price “gaps”, published in the 2018 International Federation of Technical Analysts’ Annual Journal, he developed a new technical tool for analyzing and trading the “gap” phenomenon – the “K-Divergence” (http://ifta.org/public/files/journal/d_ifta_journal_18). Besides obtaining a Master in Financial Technical Analysis, he has completed a BBA and an MBA from the Schulich School of Business in Toronto and has completed all exams for the CFA, CMT and CFTe designations. Currently, providing research to investment management and financial advisory firms. http://www.linkedin.com/in/konstantindimov




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