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Trade Recommendation: Ride the Next Rally of Bitcoin

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The profit taking period that saw the Bitcoin market fall from 19,697 to a low of 13,501 in a matter of a few days is almost up. The market appears to have generated a new higher low and will use that level to make its next move up.

Technical analysis reveals a large reversal pattern in the hourly chart that could signal the end of the correction. In addition, volume has been steadily decreasing. On Coinbase, volume spiked by as much as three times its average value in the hourly chart during the height of selling. In the last seven hours, however, volume has been way below its average indicating that bears have lot ammunition. More importantly, RSI in the hourly chart is far from overbought territory. This gives the market a lot of room to breach resistance at 18,000.

The strategy is to buy the market when it goes above 18,000. With signs of selling exhaustion, bears may not put up much of a fight the next time the pair breaches 18,000 on Coinbase. Also, the market has no stiff resistance above 18,000 so it has a clear path to our target of 22,500.

Hourly Bitcoin Chart on Coinbase

As of the time of writing, Bitcoin is trading at 17,200.

Summary of Strategy

Buy: breach of 18,000

Support: 17,200, 16,800, and 16,450

Target: $22,500

Stop: Move below 16,450

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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3.6 stars on average, based on 201 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Altcoins

Cryptocurrencies Bounce from Intraday Lows as Bitcoin Price Stabilizes, Stellar Regains Momentum

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The crypto markets were back in positive territory Saturday, with prices rebounding from an intraday slump that saw the likes of Stellar XLM post double-digit percentage losses.

Crypto Market Update

Bitcoin and the largest altcoins were seeing green Saturday afternoon, as bullish sentiment returned to the market following an earlier slump. At the time of writing, the combined value of all cryptocurrency was $282.7 billion, according to CoinMarketCap. The market bottomed closer to $272 billion at 21:00 UTC on Friday. Total trade volumes were $12.3 billion, a decline of 20% from the previous day.

The bitcoin price reached a low of $7,262 Friday before swinging sharply in the opposite direction over the next 16 hours. Bitcoin now sits at $7,411, with average daily volumes hovering near $3.9 billion.

Stellar XLM – the week’s top performer – was down 10% earlier in the day as bullish sentiment wavered. However, Lumens have bounced back sharply, and now trade more than 6% higher compared with 24 hours ago .The Stellar price currently sits at $0.291.

Stellar returned a whopping 53% for the week through Friday on reports that IBM was looking to launch a new stablecoin on the XLM network.

Ethereum was also trading in positive territory Saturday following a week of modest gains. At the time of writing, ETH/USD held near $467 for a 24-hour return of 3.8%.

Fake Volumes?

Trading volume – the amount of a security that changes hands over a given period – is a hotly debated topic in the cryptocurrency market. Last month, Hacked reported on a recent study showing that a large chunk of crypto trade volume is fabricated by exchanges.

Cryptocurrency trader and researcher Sylvain Ribes concluded that more than $3 billion in claimed trading volume was fabricated. The study, which was carried out in March, outed OKEx as the worst offender with over 90% of its order books being nonexistent.

While we have not been able to verify Ribes’ claims, data provider CoinMarketCap has announced new measures to crack down on fake volumes.

Now, data provider CoinMarketCap has announced new measures to address what it says could be fake volume figures.

In a blog post published Thursday, the site said it has already lowered a minimum volume requirement for digital currency exchanges listed on the site. The policy is intended “to filter for more popular exchanges that could be listed on CoinmarketCap.”

The blog post identified three “volume concerns” it intends to tackle, including fee-free mining models, low fee models and artificial volumes.

The post added:

“While we have a relationship with most of the exchanges listed on our site, there is no guarantee that any of them will respond or comply to any specific guidelines, but we have to continue showing users the best approximation of price and volume based on all the data we have available.

The evolution of new models such as transaction mining also means that there needs to be new ways to account for volume. Compounding it is the fact that they are, in fact, enabling greater liquidity in the way that users are trading more readily on the platforms.”

CoinMarketCap added that its volume data reflects of “best approximation of price and volume” based on available data.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.6 stars on average, based on 504 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin

Bitcoin Price Holds Steady as Market Dominance Hits 3 1/2 Month High

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The bitcoin price was undeterred by a wider slump in crypto assets Friday, with its share of the total market reaching the highest level since early April.

Bitcoin Price Update

On a 24-hour basis, bitcoin’s price is little changed Friday, with values continuing to hover north of $7,400. Coin values briefly surpassed $7,500 before reverting all the way back to the low $7,400 region.

The largest digital currency by market capitalization booked most of its gains in the span of 24 hours on Tuesday and Wednesday. The uptrend followed a week-long consolidation where markets successfully defended the $6,000 price floor. A confluence of support later emerged near $6,400, propelling a short-term rally toward $7,000 and, eventually, a high near $7,600.

Bitcoin is on track for weekly gains of nearly 19%. Trade volumes have surged 40% week-over-week, including a peak of $6.8 billion.

Bitcoin Dominance Index

Bitcoin’s strength relative to other cryptocurrencies is exemplified by its growing share of the overall market. As of Friday, bitcoin accounted for 45.4% of the total market capitalization for cryptocurrencies, its highest since early Aprilm according to CoinMarketCap. The so-called bitcoin dominance index is up nearly 3 percentage points since Tuesday, when BTC/USD first broke out.

At nearly $128 billion, bitcoin’s market share is nearly three times that of Ethereum, the second largest cryptocurrency by value. Ethereum narrowed the gap to less than half last year, right around the time the bull market began to take off.

As last year’s bull market demonstrated, bitcoin’s dominance index usually declines during a major market uptrend as more capital flows into altcoins. However, the recent rally had the distinction of being largely concentrated in bitcoin. While this may bode well for long-term holders of the digital currency, it can also be viewed as a bearish sign for the overall market. That’s because altcoin price independence is considered an important feature of a healthy cryptocurrency market.

Measured by market cap, cryptocurrencies not named bitcoin (BTC) have gained 10.5% over the past seven days. By comparison, bitcoin’s total capitalization has increased nearly 19%.

Despite bitcoin’s outsized gains, the market is enjoying wider institutional support and important regulatory breakthroughs that could bring greater stability to the asset class. Business Insider and CCN have reported that Coinbase, one of the world’s major crypto exchanges, has scored a major institutional client. Although names have not been disclosed, the client is said to be a $20 billion hedge fund.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.6 stars on average, based on 504 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Crypto Update: Divergence Deepens as Altcoins Fall, Bitcoin Flat

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The unusual discrepancy between BTC and the rest of the cryptocurrency market continued today, with the top 10 coins all losing ground with the exception of Bitcoin itself. Tuesday’s surge, which carried the segment to $300 billion in total market cap quickly fizzled out, at least as far as the major altcoins are concerned, but the largest digital currency is still holding on above the strong $7000 and $7350 support/resistance levels.

Altcoins are on short-term sell signals according to our trend model, but Bitcoin is still on a buy signal as the declining trend was broken by the break-out that remains intact, despite the segment-wide weakness.

Given the mixed, but one-sided setup, and the lack of bullish follow-through, odds still favor a bearish outcome, and traders should remain cautious with new positions here, even in BTC, the positive outlier. A broad trend change would require a meaningful leadership, and until that develops, a test of t eh June lows remains likely, with the possibility of new lows in the coming week as well.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin failed to durably stay above the $7500 level, bulls successfully defended the support zone near $7350, despite the overbought short-term momentum readings. The coin is well above the line-in-the-sand $7000 level and the long-term support near $5850 that was in danger just one week ago.

Although the altcoin weakness makes BTC’s rally suspicious, the short-term bullish pattern is intact, as is the buy signal in our trend model. Further support is found at $6750, and $6500, while primary resistance is still ahead at $7650.

Selling Pressure Apparent in Altcoins

ETH/USD, 4-Hour Chart Analysis

All intraday rally attempts have been sold so far in most of the major altcoins, and Ethereum is just holding up above primary support at $450 despite the rally in the beginning of the week. The coin is on a short-term sell signal, and a test of the June lows is likely after the failed break-out. Strong resistance is ahead at $500 and between $555 and $575, while support is found at $420, $400, $380, and $360.

XMR/USDT, 4-Hour Chart Analysis

While Monero has been holding up relatively well in the last couple of days after getting stuck below the $150 level during the Tuesday surge, but the coin is still among the structurally weak majors, being on a long-term sell signal. As the other bearish leaders, NEO, LTC, and Dash are also trading below key long-term levels, we expect the coin to fall back below the $125 support and likely test the June lows in the coming weeks.

XRP/USDT, 4-Hour Chart Analysis

The third largest coin Ripple is already testing the $0.45 level after drifting lower ever since the Tuesday rally, and as its relative weakness is still clear, a break below that level seems to be imminent. Below that, the crucial long-term support zone near $0.42 could stop the decline of XRP again, but a move under that could trigger a long-term sell signal.

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 297 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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