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Analysis

Weekly Altcoin & Bitcoin Analysis: Time to Short Bitcoin?

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It was an exciting week for crypto traders. It seems like there are an ever-increasing number of traders joining the party doesn’t it?  Given that just a year ago there was just a handful of traders compared to now, and we still have not even scratched the surface of the number of traders out there still trading Forex exclusively, the future seems bright indeed.  To do well, all you have to do is make sure you don’t make a mistake that wipes out your trading account and forces you out of the game.  (At the risk of sounding like a broken record, the best way for new traders to lose everything is to use leverage before they are seasoned traders.)

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If you miss a “trade du jour”, my advice is don’t chase it.  I know it sucks to be in a trade and then see a different coin is going through the roof while yours is stuck in the mud. Happened to me this week – I missed the ETH party.  But if you chase a trade after the fact, you are highly likely to buy a high.  There will be another trade tomorrow, and another the day after that, and the next…  If you miss one, try not to get greedy and/or impatient – just catch the next trade.  If you just stay in the game, IMHO, you stand a good chance of doing very well for yourself.  There is a ton of money flowing into the altcoins, and we are still in the very early stages of what might be a bull market they will write about in the history books – IMHO.

Bitcoin

I believe XBT is finally approaching the end of it’s present historic run.  There are 2 arcs, a short-term 3rd, and a long-term 5th, very close by (~ $2100).  I always counsel others, and myself, to never short a bull market.  But I might make an exception in this case, if I am feeling brave enough.  This 12 hour chart is screaming out a major warning to longs.

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DASH

Dash has too little data on kraken for a long term look at the chart.  But the short term chart shows a retracement at the 4th arc.  A little more pullback and a new advance to the 5th arc will like begin. There is a number of reasons to believe that 5/27-5/28 will be a significant energy point for DASH.  It is too soon to tell if it will be a high, low or acceleration.  But mark it on your calendar.

Ethereum

 

Regretfully I missed this rally.  By the time I noticed it, price was too close to the 3rd arc to buy it.  However, my guess is that price will get through the arcs to go to the 5th arcs. Target ~$165. (Last week we identified $130 as a next target.  This rally was stopped at $129).  I see there is an energy point due tomorrow (red vertical line). Maybe that is the time to watch.  I suggest waiting for a close above the 3rd arc, but aggressive traders might risk buying here.

Litecoin

LTC was a bit of a disappointment this week.  We tweeted the low was likely in at $21, and it was.  The subsequent rally to $29 was exhilarating, but that 1st arc pair stopped the party, and then the top of the square provided a ceiling.  Then the money moved to ETH I suppose…  Lets see when/if this coin can get through those arcs…

Ripple

We tweeted that the low was likely in at .28, and indeed that was the low. Since then there was a rally that brought XRP back to the same arc that crashed the party several days ago.  The arc stopped the rally again.  My guess is that it will get through the arc soon and rally again.  My suggestion is to wait for a close above the arcs though. It could fall again here.

Zcash

ZEC closed above the 2nd arc before falling back.  This suggests to me that the arcs are weak and will yield on the next test.  I suggest waiting for confirmation.  However, a rally to the 3rd and/or the 5th arcs is likely in the week ahead.

Monero

XMR rallied hard into the 5th arc of a longer-term setup.  At this writing it is sitting just below the 5th arc. It is too soon to say if this is a double top or not (could be!), so my suggestion is to take profits here, if you are long.

Remember:  The author is a trader who is subject to all manner of error in judgment.  Do your own research, and be prepared to take full responsibility for your own trades.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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16 Comments

16 Comments

  1. amirheavy666

    May 21, 2017 at 11:14 am

    Dear Jim
    what’s you idea about Stellar Lumens?
    thanks

    • Jim Fredrickson

      May 22, 2017 at 1:11 am

      I like XLM. I’ve been long XLM for a couple weeks now.

  2. calantheddreyert

    May 21, 2017 at 11:29 am

    hi, i was buy LTC when its 27, do you think it can up to $40
    thanks

    • Jim Fredrickson

      May 22, 2017 at 1:12 am

      Yes, but you may need to be patient…

  3. ridesisapis

    May 21, 2017 at 11:33 am

    Hi Jim, its DASH plotted for Ethereum analysis instead of ETHUSD.

  4. mvppvm_07

    May 21, 2017 at 1:48 pm

    Two rookie questions:
    1) Given today’s chart analysis and assuming that one trades in each of the coins charted, do you have an “arc” weighting criterion that you use to adjust the percentage of your trading liquidity to one coin over another?

    2) This presupposes an implied risk value assigned to a “contextual” timeline, I’m sure. How far back is your look-back when assessing arc risk?

    I’m not sure this is a clear set of questions but it’s the only way I can describe my curiosity so far. I’m trying to learn to read what you’re presenting.

    Thanks for your work, by the way

    • Jim Fredrickson

      May 22, 2017 at 1:27 am

      I don’t trade all coins at the same time, and strongly suggest others don’t either. Investing is a different animal. If one wants to invest in all of them for the long haul, that is fine.
      As for which one I trade, it depends on which one I think will out-perform the others. Sometimes I get it right, sometimes I don’t. But when you miss out on a great trade just forget about it, and try to catch the next one. There will always be another great trade coming soon, and you don’t need to catch them all.

  5. jkhan123

    May 21, 2017 at 3:40 pm

    Hey, what do you think of Golem? thanks

  6. ryepdx

    May 21, 2017 at 8:49 pm

    Seeing the DASH chart again where the ETH chart should be.

    • Jim Fredrickson

      May 22, 2017 at 1:15 am

      Oh my God you are right… I put the wrong heading there. I will try to fix it asap. thank you.

      • Jim Fredrickson

        May 22, 2017 at 1:28 am

        Actually, the heading is correct, just the wrong picture. I have asked the editor to fix that. Thank you…

  7. gullyfoyle

    May 21, 2017 at 9:09 pm

    always good to have your own thoughts confirmed by a seasoned trader, thanks Jim

  8. jarosatori

    May 21, 2017 at 11:43 pm

    How deep the correction of BTC will be iyho?

  9. jixiang2009

    June 20, 2017 at 10:18 am

    学习了

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Analysis

Long-Term Analysis of the Silver Market

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Silver

The silver market has once again caught investors’ interest as the price is nearing areas not seen since late 2008.

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2017 started at a low point for silver, and it seems it will end the year that way as well, meaning investors who bought at the beginning of the year haven’t suffered nor gained much.

This doesn’t mean, however, that the price hasn’t moved during the year. After the low start of the year, silver quickly tacked on about 18% to a top of $17.50 per ounce.

In terms of fundamentals in the silver market, things look a bit complicated for 2018. There are multiple forces pulling in different directions for the price of silver going forward:

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Positives

  • A sharp stock market correction can be expected to occur some time in 2018. Most likely, this will happen sooner rather than later. Stock market crashes always trigger a flight to safety, meaning gold, silver, and quite possibly bitcoin, can benefit.
  • We are seeing signs that inflation may be starting to rise again, although this is not confirmed yet. Rising inflation is always good for precious metals.
  • If the US federal budget deficit widens as a result of the new tax reform, the US dollar may suffer as a consequence. Goldman Sachs put out a note to investors in November 2017 saying that the US debt is “on track” to reach an “unsustainable” level in coming years. Fed Chair Janet Yellen has also said about the US debt that it is “the type of thing that should keep people awake at night.” Rising debt levels creates uncertainty about the economy, which is generally good for gold and silver.

Negatives

  • Central banks around the world seem committed to raise interest rates in 2018. Rising interest rates are bad for precious metals because it would make it more attractive to put money in the bank.
  • The cryptocurrency bull market is on track to continue, diverting attention and capital away from precious metals as a traditional store of value. However, this one is uncertain, as it may also be considered a positive in the way that the rise of cryptocurrencies brings the inflationary and unsustainable nature of fiat currencies into focus.
  • The US dollar may have hit a bottom in 2017 and trade higher compared to other major fiat currencies going into 2018. A stronger dollar is always bad for precious metals, which are priced in dollars.

Silver chart

When looking at the chart, we can see that silver is back down to were it started the year, which coincides with a major support area where it has turned several times in the past few years.

From a technical perspective, silver has been trading in a triangle pattern on the longer-term weekly chart, with the price now trading very near the lower end of the triangle, adding confluence to our bias that silver will trade up from here.

Silver failed to live up to our prediction from early 2017, and is now even trading well below the level from that time.

A low price by any measure combined with two major technical support levels adds confidence to our trade and makes silver a low risk and potentially high reward trade for 2018.

Depending on your own strategy and investment style, you may want to wait for the price to break out from the current triangle pattern it has been trading in for the past year and a half. You would then give up some of the potential return for an even safer trade. After that, major resistance is found around $17.50 and $18, with lots of upside potential if we can finally break through those levels.

Featured image from Pixabay.

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Analysis

Long-Term Cryptocurrency Analysis: Look Out Below?

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After last week’s observation that a major top is in or near in the segment, the Bitcoin surge continued for almost a week, with Thursday’s wild session taking the coin as high as $19,000 (the article uses Bitstamp prices) on some exchanges. While the currency already pulled back by more than 20% the long-term picture is still extremely overbought and a much deeper correction is likely in the coming weeks.

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BTC spiked below $13,000 today, violating the primary weak support at $13,300, with further levels now at $11,300, $10,000 and $9000, but stronger support only found at $8200 and $7700. Next week’s futures launch could cause another jump in trading activity, and volatility is expected to remain very high amid the likely correction.

BTC/USD, Daily Chart Analysis

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While not all altcoins participated in the, supposedly, last part of the rally, IOTA, Monero, and towards the end of the week Litecoin, also stretched above all conventional targets with IOTA also turning exponential after a deal with Microsoft. The coin exploded by more than 350% before entering an initial sharp correction, breaking the steepest short-term uptrend. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.

IOT/USD, Daily Chart Analysis

Let’s see how the long-term charts of the other altcoins look after the crazy week.

(more…)

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Analysis

Daily Analysis: Stocks Rise on Mixed Jobs Report, Bank gains as Bitcoin Wobbles

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2651 0.45%
DAX 13153 0.85%
WTI Crude Oil 57.34 1.12%
GOLD 1250.00 0.21%
Bitcoin 15775 -4.10%
EUR/USD 1.1774 -0.01%

The “Week of Bitcoin” ended on a positive note regarding traditional financial assets, with several bullish catalysts helping the recently struggling indices in Europe and the US. Asia settled down after a period of pronounced weakness, the finalized framework of the new regulation of the European banking sector favored the banks, end the US employment report was mixed enough but not too bad to help equities. While these don’t sound that bullish from a long-term perspective, in the world of central bank dependency, a sluggish growth environment fuels the yield-seeking rally in stocks.

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S&P 500 at All-Time Highs, 4-Hour Chart Analysis

Short-term rates declined thanks to the slightly negative economic news, and as Trump’s decision regarding Jerusalem sparked widespread protests in the Middle East, gold and long-dated treasuries rebounded, as a sign of moderate safe-haven flows. The VIX shrugged off the geopolitical fears and stock volatility plunged back near its recent record lows, while the DOW and the S&P 500 finished on new all-time closing highs, even as the intraday highs from Monday are still ahead of the benchmarks.

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Last night’s Brexit deal caused a “sell the news” dip in the Great British Pound even amid the risk-on sentiment, as the currency lost ground compared to its major counterparts, while the rest of the forex complex finished a choppy session close to unchanged on the eventful day.

EUR/GBP, 4-Hour Chart Analysis

Cryptocurrencies

All eyes were still on Bitcoin and the major altcoins as trading activity skyrocketed in the cryptocurrency segment thanks to the exponential rally and the sharp correction in the market of BTC. The coin hit a new all-time high on all exchanges, albeit at widely diverging levels, as several exchanges broke under the weight of the record volumes.

Bitcoin fell as much as $3000, more than 20% top-to-bottom, but as we speak the currency is regaining momentum and we might be in for another interesting weekend in the segment. While it seems very likely that a sharp correction is just around the corner, picking a top in BTC is not an easy feat, even as the momentum indicators are off the charts.

BTC/USD, 4-Hour Chart Analysis

Altcoins benefited from the early sell-off in Bitcoin, and Litecoin even rallied to a fresh all-time high, while the other majors rose significantly as well.  Although the currency and the segment as a whole are stretched by all measures, and the risks of a “fake-out” our high, speculative flows could propel another rally in LTC.

LTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
1:50 JAPAN GDP 0.6% 0.4% 0.3%
Tent. CHINA Trade Balance 264 bill 231 bill 254 bill
11:30 UK Manufacturing Production 0.1% 0.1% 0.7%
15:30 US Hourly Earnings 0.2% 0.3% 0.0%
15:30 US Non Farm Payrolls 228,000 198,000 261,000

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