CryptoCurrency Business

Analysis: Bullish Weekend

Trading activity remains on very low levels in the segment, and that’s not a bad sign for the longevity of the rally, as probably lots of burnt investors are still on the sidelines, waiting for confirmation to enter the recovery.

The best period to that is already gone in the case of most of the coins, reflected in our trend model, but the continuation of the rally is still very likely, with no major red flags raised by the price action in the majors. The lack of momentum in the bullish moves is a slight concern here, but the resilience that most of the currencies showed during last week’s correction confirms the positive scenario.

Today, Monero and Bitcoin are the most active major coins, with the decline in ETC also making headlines. A large part of the market is not going anywhere, and to cite the old adage once more “Never short a dull market!”

BTC edged as high as $11,500 as the creeping rally in the most valuable coin cleared the $11,300 level, with all being now lined up for a test of the dominant declining trendline. It would be a surprise to see Bitcoin taking out that resistance without some struggle, and more nervous short-term traders could take some profits here before the “battle”.

In case of a pullback, support is found at $10,500, $10,000 and between $9000 and $9200, while above the key zone the main target is the $13,000 price level.

Monero on the Move, Ether Still Flatlined, ETC Correcting

The overnight break-out in XMR reached the $375 level before a pullback ensued, but a rally towards $400 is still likely. That said, the short-term momentum is now overbought, and taking some profits here could be a good idea for traders, but we would leave some chips on the table.

Dash and Litecoin have also shown some positive signs lately, but the corrective move in Ethereum Classic might be a warning sign that the early leaders of the rally might need more time to consolidate their lofty initial gains.

The tug of war in Ethereum’s market is still apparent, and with the very strong resistance ahead, we wouldn’t be surprise of more consolidation, before a move out of the declining trend to scare the weak hands out once again, as it is usually done by Mr. Market.

Ripple, Cardano, and Stellar the main laggards in the top ten, IOTA is in a similar position to ETH, while rising stars Tron and Nano have been very active yet again among the smaller coins.

Our short-term outlook is rather neutral for the segment, as the low liquidity could result in a choppy market with sudden spikes lower, but the we still expect the recovery to continue in the majors.

Trade Recommendation: Ethereum

This is a short term trade.

Entry Price: 869.25
Stop Loss: 845.00
Profit Targets: First profit target 897.00. Second profit target 924.00.

Once price reaches the first profit target raise the stop loss to breakeven.

Technical Analysis:
Majors Currencies Still on Rally, but Strong Levels Not Reached Yet

The cryptocurrency segment has recovered from a correction yesterday, with the major coins all turning into green during the day session, despite the bearish start.With gains of up to 15%, the rally helped the relatively weaker coins.

Bitcoin and most of the largest altcoins remained stable, and BTC recaptured the $10,000 level. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

We expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

Litecoin

Litecoin managed to reach back up to $215 after briefly trading near the $180 support during the Asian session today, with the key $200 level still being in the center of attention. The coin remains above the prior declining trendline after testing it overnight, and we still expect it to resume its uptrend after the correction, with resistance levels ahead at $225, $250, and $300, and support at further $170 and $150.

Dash

Dash turned volatile after a period of strength and calmer market conditions, and although it fell as low as $600 during the correction, the long-term picture remains constructive. Investors could add to their positions during the current correction, as we expect the recovery to resume. Support is now found at $600, and $500, while resistance zones are ahead near $$650, $700, around $825, $950, and $1000.

Ripple

Ripple continues to show relative weakness although it held up above the$0.85 level as expected, and it’s trading just below the key $1 resistance after today’s rally. While the correction might still continue, we expect the coin to resume the recovery in the coming weeks, with targets ahead at $1.25, and $1.50, and further resistance at $0.68.

Ethereum Classic

ETC recovered above the key $32-$34 support zone, in a very bullish fashion today after trading close to the $30 level overnight. The coin remains one of the strongest majors from a short-term technical perspective and we expect the uptrend to resume soon. Resistance is ahead near $37 and $43, while further support zone is near $27.

Monero

Monero continues to trade near the $280 level, the lower boundary of the bullish consolidation pattern, still among the strongest coins from a long-term technical perspective. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue even if the correction is not done yet. Above $335, the next target is at $400, while further support is found at $240.

NEO

NEO was behind most of the majors yesterday, being stuck below the key $120 level the lower boundary of the primary resistance zone ahead. As we still expect the broad correction to continue, traders should stay away from new positions, but investors could still accumulate the coin. Further resistance is ahead at $130, $150, and near the all-time high at $190, while support is at $100 and $80.

IOTA

IOTA held up above the $1.50 level despite the relative weakness that it has been showing during the correction, and it’s now slightly stronger during the bounce. The correction could still continue but we expect the recovery to resume soon, with resistance zones are ahead near $1.9, and between $2.2 and $2.35, while further support is at $1.2.

Swing Trading Set-Ups - How to find a good one?

Swing trading is often the starting point for those who are looking to jump into crypto trading, and perhaps make the move from being an passive investor to becoming an active trader. The reasons for this are simple: it involves trading on a medium timeframe which means it is possible to do it while you still have a day job, and it can complement other trading styles like day trading, trend trading, or scalping.

Average holding time for a swing trader is 1-4 days. In forex, you typically hold your trade for no more than 5 days in order to eliminate the risk of holding a position while the markets are closed over the weekend. For cryptocurrencies however, which trade 24/7, you can adapt your rules and no longer need to be so strict about the holding period.

What is a swing in a market?

The market price of any currency, as well as cryptocurrency, can be defined as the equilibrium between supply and demand at any given time. It is the price where a buyer and a seller agree to make a trade. Over time, these equilibrium prices can move in uptrends or downtrends or even sideways in a range.

A typical market pattern is for prices to move from contracting ranges to expanding ranges. The shift between these two is called a “break-out,” and this is where we see strong and quick price movements to a new area on the chart.

One way to look at it is to compare range contraction to a spring that is being compressed. The break-out occurs when all the energy from the spring is released, which may happen either to the upside or the downside. We now have the beginning of a “swing” in the market.

If this break-out is followed by a series of higher tops and higher bottoms in “wave movements,” the market has formed an uptrend. If the inverse is true, we have a downtrend. Each wave is considered its own swing in the market.

As swing traders, our job is to catch the most violent part of this move – the break-out. Some traders choose to hold on to the trade through several swings and thus ride the trend, while others prefer to sell once a pre-determined price target has been reached.

How to spot good potential swings?

For the majority of the time, prices of any tradable instrument move within a certain range. In the stock market, it is often said that the market is ranging as much as 80% of the time.

To scan for potential trading opportunities, one approach is to first look at your charts in one of the higher timeframes, for example the daily or the 4-hour timeframe. Once you spot a promising set-up, switch to a lower timeframe like the 1-hour to look for specific entry opportunities.

Generally speaking, there are three important factors you need to take into consideration when looking for an entry as a swing trader:

(1) Swings should happen in the same general direction as the trend that is playing out on the higher timeframes.

(2) If trading crypto, look for momentum in coins that share similar characteristics as the one you are trading. For example, if you are considering to trade a Dash, how are other coins like Monero or Zcash doing? In the stock market, look for stocks in the same industry.

(3) Carefully evaluate the trend. Is it getting stronger or weaker? A weakening trend could mean that it is about to change direction, while a strengthening trend could mean the opposite. Is trading volume supporting the trend? Uptrends with gradually increasing volume are considered the most robust.

Trade timing and profit rate

The best instrument to trade is the one that is exhibiting the strongest behavior in its class. So, to use the privacy coins as an example again, pick the one that is trending up in the strongest way among them. This is the coin where you want to place your trade.

In addition to this, don’t forget to adjust and tweak your strategy to the prevailing market conditions. Remember that the profit rate of any trading strategy can change dramatically under changing market conditions, and make you go from being a profitable trader to a losing trader.

As swing traders, we need to be aggressive when we spot good opportunities. You cannot afford to pass on good trading opportunities. Make sure that you earn enough on your good trades to make up for the inevitable losses that will come.

Similarly, a swing trader also need to know when to stay away from the market altogether. It is equally important to recognize the conditions you should stay away from, as it is to be aggressive under the right conditions.

Also, remember the words of the legendary trader Jesse Livermore: “There is a time to go long, a time to go short, and a time to go fishing.” These are wise words that we all should remind ourselves of from time to time!

Good luck on your swing trading journey.