(+) Long-Term Cryptocurrency Analysis: A Major Top Could Be In

By | 03.12.2017

This week will likely go down in the history of the cryptocurrency segment, whether or not we have seen a durable top, given Bitcoin’s epic rally above the $10,000 level. The trading frenzy of the recent period resembles a blow-off top that could be the starting point a deep and lasting correction.

That said, with the rising short-term trends still being intact, and as the coins receive more and more mainstream media attention, it’s possible that the exact top is still ahead. What’s sure is that there will be much better opportunities to buy, and that correction risk hasn’t been higher.

The price of BTC breached the $11,000 level again, getting close to Tuesday’s all-time high after establishing support near $9000 during the mid-week correction. Below that, the coin has major support near $8200, $7700, $6700, and $6000. The extremely overbought momentum readings point to a deep correction in the coming weeks.

BTC/USD, Daily Chart Analysis

Litecoin has been the strongest major altcoin, along with Dash and IOTA, and LTC is trading just below the $100 level this weekend. The coin is also in a severely stretched long-term setup, and we don’t expect durable new all-time highs in this cycle. Strong support is found near $75, $64, and $56.

LTC/USD, Daily Chart Analysis

Ethereum

ETH/USD, Daily Chart Analysis

Ethereum’s break-out halted right at the $500 level amid the Bitcoin-Frenzy and the second largest coin followed BTC lower during the volatile break-down and the following bounce. The coin is not extremely overbought, but we expect a segment-wide correction, although ETH should outperform during it. Below the break-out level at $400support is found at $380 and $350.

Ripple

XRP/USDT, Daily Chart Analysis

Ripple is still the laggard among the majors form a long-term perspective and the coin followed the week’s wild moves within its long-standing trading range. The currency is stuck between the key $0.2250 and $0.26 levels this weekend, and it’s still neutral on all time-frames regarding momentum, while remaining on a buy signal. Support is still found just below $0.20, and at $0.18, while further resistance above $0.26 is found at $0.30.

Dash

DASH/USD, Daily Chart Analysis

Dash held up very strongly amid the volatile correction, proving its apparent relative strength once again. That said, the coin is clearly overbought, and although we expect it to remain strong in the coming months, a deep correction is likely. Key support levels are still found at just above $600, at $500, $470, and near $410.

Ethereum Classic

ETC/USD, Daily Chart Analysis

Ethereum Classic’s November rally was one of the strongest among the majors and the 200+% gain lead to an extremely stretched long-term setup. The coin’s initial correction took it back to the previous record high near $23, and we expect that level to be breached in a coming pull-back. Further support is found at $18 while the all-time high is ahead as resistance at $32.

Monero

XMR/USD, Daily Chart Analysis

Monero reached our final target for its break-out this week, and it already re-tested the break-out level during the following correction. The coin remains in a short-term uptrend despite the overbought long-term momentum readings, but we expect further corrective price action before a major move higher with support levels at $180, $150, and $125.

IOTA

IOTA/USD, Daily Chart Analysis

IOTA skyrocketed to $1.50, above our expectations after moving past the $1.1 resistance. The coin remained strong in the second half of the week as well, although it is the most overbought major together with BTC and ETC. Investors and traders should wait for the next correction with entering new positions, with key support levels at $1.1, $1, and $0.75.

How to Use These Charts?

As we stressed in our article on Bitcoin: “…not all strategies are binary (either holding an asset or not).There are many long- and short-term investment and trading strategies that can be successful in a roaring bull market like the one that the crypto-coin segment is experiencing, but mixing the time-frames and mixing trading and investing (see our article on the topic) could lead to troubles.”

Here is a reminder of some of the possible strategies once again:

  • Buy and hold, without caring about day-to-day (or even month-month) fluctuations
  • Buy and hold a core position and add on the major dips; a very powerful strategy
  • Buy a certain amount every week or month, and even-out your entry price, without the hassle of timing the market
  • Try to catch major turning points to reduce and “re-boost” your position
  • Trade short-term movements with stop-losses, targets, and strict risk management (this is trading not investing)”

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.

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