Weekly Cryptocurrency Price Analysis: Bitcoin, Ethereum, NEO, and other Major Coins
From the news
Perhaps the news making the most headlines this week had to do with CoinBase e-Money license acquisition from UK’s FCA and the EU. With the license, it means CoinBase customers in the UK can make Faster Payment Scheme (FPS) that would facilitate faster withdrawal and deposits. CoinBase plans to implement FPS in collaboration with Barclays.
With the e-Money license, CoinBase insists that the ultimate objective is to protect the customer as they adhere to strict FCA rules and regulations. One of them includes a policy that separates customer’s funds from CoinBase’s operational funds and making them available for withdrawal in case the company goes under.
Talking about fast transfers, the beta version of Bitcoin’s Lightning Network protocol is now live. This is according to California’s Lightning Labs who are in the forefront implementing scalability solutions. The Lightning Network is an off chain solution that seeks to solve scalability through the use of channels and dedicated nodes. According to Elizabeth Stark, the co-founder of Lightning Labs, LN would be perfect for merchants since low fees make it possible for micropayments.
Apple took action against Calendar 2 App temporarily suspending it after it emerged that its Monero mining code unnecessarily drained Apple devices battery and consuming the processing power even when consenting subscribers opt out. However, Qbit, the company behind the premium app, quickly fixed the issue and renegotiated with Apple before the app went back live.
Apart from that, let’s have a look at the charts:
From our previous analysis, it is quickly turning out that patience is an important asset if price action is anything to go by. First, we should know that picking out bottoms is a dangerous game. We can equate it to catching a falling knife. Well, sometimes you get lucky but most of the time you end up hurt.
This is exactly what is happening to BTC prices. Our previous support stood at $8000, the 61.8 percent Fibonacci retracement level of BTC’s high lows.
Relative to other pairs whose value tanked by more than 80 percent, BTC will likely follow the same route, assuming there is no recovery, and surge past the resistance trend line connecting December 17, 2017, and March 4, 2018, highs as visible in the weekly chart. Remember, all this is happening even with stochastic trending at the oversold territory.
Regardless of what happens, we recommend shorts at every retest of $8,000 with invalidation (of this bear projection) happening when prices edge past $9,000 and the main resistance trend line as per last week’s trade strategy. For now, ideal bear targets stands at $4,900, that’s the 78.6 percent Fibonacci retracement line.
We shall have a clear picture of price action if we consider price action in the weekly chart. While there were bullish attempts late last week, this week’s deterioration has been worth noting.
Well, first there is a bearish breakout pattern visible and that erosion saw ETH lose more than $200 by March 18. Now, it’s because of this strong close below the middle BB and obliteration of the 50 percent Fibonacci retracement level at $700 that makes us realign and take short positions next week.
Every stochastic sell signal and or even retest of $700 means we short ETH with immediate targets at $400 or the 78.6 percent Fibonacci retracement limit on the lower level.
However, positional traders should wait for a break and close above the middle BB and $900 to capitalize on breakouts and potential medium to short-term bullish moves.
The erosion of XRP prices has been spectacular.
While we were anticipating prices to pull back after testing the main support line, the 20 period MA, sell pressure was strong. Well, bears were so strong that two levels of support were broken. The first being our main support line and secondly, the 78.6 percent Fibonacci retracement level.
By extension, this means XRP is trading 80 percent lower and chances of $0.13 being hit looks high. After all, that is the breakout level, the genesis of December 2017 bullish run and now is the ideal bear target.
Unless prices close above $0.90, I will recommend trading the bear breakout pattern and that means selling with every stochastic high in the 4HR chart throughout this week.
BCH/USD (Bitcoin Cash)
Previously, our main support line stood at $1055, right at the 78.6 percent Fibonacci retracement level. That is where we expected prices to pick up in the daily chart but evidently, the sell surge has been strong.
From the chart, prices are now well below $1055 and are testing August 2017 highs. Prices around $800 are important for our analysis because that is the then resistance line that was broken as BCH buyers edged higher towards $4000 after that strong bullish candlestick by week ending November 12, 2018. Considering price action, we shall trade a bear break out with $1055 acting our immediate support and potential sell targets at $800 or week ending February 11, 2018, lows.
In case of further deterioration then sellers can shift sell targets towards $700 and even $300 on the lower end.
From price action, it’s clear that sellers are on the driving seat and there is room for more depreciation. First, as we can see. The strong depreciation of NEO not only saw a confirmation of last week’s bear candlestick but this week’s candlestick actually broke and closed below the middle BB.
The 20 period MA is relevant in our analysis and as such, it shall act as our immediate resistance line with prices around $80 or the 61.8 percent Fibonacci retracement level acting as our first level of resistance.
Besides the bear trend, notice that at current prices of $60 NEO is testing last year’s break out level, August highs.
Often, a retest of key levels as this is followed by a rebound. However, to avoid assumptions, we shall have to wait and see if the general trend will continue or if prices will actually reverse at these levels and confirm a larger bullish breakout pattern that began after the week ending December 17, 2018.
For now though, any NEO high is likely a selling opportunity and that will be especially when a stochastic sell signal prints at overbought territory prints in the 4HR chart.
There was no confirmation of double bar bullish reversal pattern at $180. Instead, LTC sellers drove prices lower. In fact, the drop has been so strong, prices are trending below the middle BB and the 61.8 percent Fibonacci retracement line at $160.
Now, here’s the thing. As long as prices are below the middle BB and $160 acting as a liquidating line, bears are in charge.
Then again, last year’s conspicuous highs of around $100 is a confluence with the 78.6 percent Fibonacci retracement level and it is, therefore, our ideal bear target.
Going forward, $160 will be the first selling line but if prices move higher in lower time frames then I will suggest looking for selling opportunity at $180 or the weekly chart’s middle BB.
Our previous analysis dictates that positional traders could only go long on this coin when prices are trading above $3. That’s a long way if current prices are anything to go by.
Generally speaking, BTC and ETH depreciation is pushing all alt coins including IOTA down. That’s what we are seeing now and as long as prices are below the middle BB and below $2, then sellers are in charge.
Because IOTA prices are already below the 78.6 percent Fibonacci retracement level or $1.5, we shall consider that level as our immediate resistance line. Those long lower wicks hint of bull pressure and as such, chances of bulls testing $1.5.
It is preferable if that happens as bears can find a perfect ground for selling on every high. On the flip side, I’m not recommending buys unless bulls push prices above the accumulation at $2.1 and the middle BB.
XLM/USD (Stellar Lumens)
Considering our previous trade plan, none of our conditions were met to validate a bull buy.
All we needed was a strong close above $0.40 before plans of buying on dips. Instead, it’s the opposite that happened.
Prices are currently testing $0.20 after a strong sell surge and a bearish engulfing pattern that confirms a bearish breakout.
I will suggest trading with the current trend and that means looking for sells in lower time frames and shorting with every high with targets at $0.07, the Fibonacci 78.6 percent retracement level.
All charts courtesy of Trading View
Dalmas is a Cryptocurrency News Writer and Analyst. He’s passionate about blockchain technology and the potential of cryptocurrencies.