Cryptocurrency Performers: Ethereum, Ethereum Classic, NEO, IOTA, Binance Coin, Stratis
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The market data is provided by the HitBTC exchange.
While 2017 was a raging bull market in cryptocurrencies, 2018 turned out to be a massive bear market that wiped out more than $720 billion in total crypto market capitalization. We believe that 2019 will bring back the focus on the fundamentals and the true potential of virtual currencies.
With the arrival of traditional investors, digital currencies will at times behave similar to the traditional markets. The Wall Street Journal recently pointed out that the correlation between Bitcoin trading and gold reached as high as 0.84 over a short period of time. Similarly, it has traded at a 0.77 correlation to the Chicago Board of Options Exchange’s Volatility Index (VIX).
As the market matures, it will carve out a niche for itself. We believe that cryptocurrencies are currently in a bottoming process and might signal a bottom within the next few weeks.
ETH/USD
After surrendering its position as the top altcoin to Ripple (XRP) a few weeks ago, Ethereum (ETH) is attempting a comeback. It has made giant strides last week and has emerged as the top performer among the major cryptocurrencies.
BitMEX CEO Arthur Hayes believes that the dead ICO market will spring back into action next year and will prove to be positive for Ethereum. He expects the cryptocurrency to rise to $200. Some are hoping that the network will get a boost from the upcoming Constantinople upgrade. However, it is always difficult to predict the market’s reaction to such a major event.
The long-term trend in Ethereum is down. It has lost a lot of money for its investors this year. However, after the fall, can the ETH/USD pair start a new uptrend in 2019?
After every rise and after every fall, the digital currency has a tendency to consolidate in a range. We have highlighted these periods with ellipses on our chart. In 2018, all the ranges have resolved to the downside.
Currently, the bulls are attempting a pullback after hitting a low of $83. The support line of the former range will now act as a stiff resistance. Because of that, we anticipate selling close to $167.32. If the bears succeed in defending this level, a range bound trading action might ensue.
On the other hand, if the bulls climb above $167.32, a rally to $249.93 is probable. The traders can wait for a close above $167.32 to establish long positions with a close stop loss.
Our neutral-to-bullish view will be invalidated if the price turns down and sinks below $83. We shall confirm the start of a long-term uptrend if the pair forms a large basing pattern and then breaks out of it. Until then, the traders should aim for small targets and book profits periodically.
ETC/USD
Ethereum Classic (ETC) turned out to be the second-best performer among the top cryptocurrencies. The market participants are bullish on the upcoming cohort slated for Jan. 14. 11 startups have been selected to get access to the shared office space, developer support and funding. Can the bull run continue? Let’s find out.
The long-term trend in the ETC/USD pair is down. Currently, the bulls are attempting to break out of the downtrend line that has capped all recovery attempts since May of this year.
A break out of the downtrend line will be the first indication that the momentum on the downside is waning. It can result in a rally to the next overhead resistance...
NEO Cypto trade recommendation $NEO #NEO
On our August 29, 2018 trade recommendation, we anticipated NEO/Bitcoin (NEO/BTC) to breakout from the large falling wedge on the daily chart. We emphasized the importance of buying only after the pair generates volume of 1 million NEO units. Without heavy volume, the breakout would not look convincing to breakout traders and trend followers. Hence, there wouldn’t be enough momentum to ignite a massive rally.
Though NEO/BTC broke out from the falling wedge as expected on August 31, the volume it printed was way below our requirements. As a result, the breakout rally was short-lived since bottom fishers saw the low volume breakout as an opportunity to take profits. The selling drove the market down. Nevertheless, this gives us a chance to buy the bottom before NEO/BTC takes off.
Technical analysis shows that NEO/BTC is respecting the historical support of 0.00245. This view comes after the pair successfully completed the retest when it dropped to as low as 0.00239 on October 15 but bulls came to the rescue and lifted the market above the support. We watched NEO/BTC from that point to see if the support will hold. The confirmation came on October 18 when volume suddenly surged. This was a signal that participants are comfortable accumulating at this level.
More importantly, the daily RSI appears to have printed a new higher low at 32.6. This is an encouraging sign as it shows that participants are no longer waiting for extreme oversold readings before entering long positions.
The strategy is to buy as close to 0.00245 support as possible. As long as the market remains above this level, it has a very good chance to rally to our initial target of 0.0034 and then 0.0046.
The process may...
