Cryptocurrency Market Update
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Crypto Market Update:
Cryptocurrency may be some of the most speculative investments that you can make. They really have nothing backing them than the users who mine and transact with them.
Since cryptocurrency are so speculative and don't have much to them besides their price movement, they are some of the easiest to analyze. Essentially, you can figure out where each coin is going based completely on technical analysis.
I'm no technical analysis expert, but it is quite easy for me to recognize long term trends develop in markets. It's as simple as drawing lines at major lines of support, and major lines of resistance. Support is a line (horizontal or diagonal) that the price of an asset has held strongly in the past. A line of resistance is a line that the price has hit before and bounced downwards, failing to break through in the past. Since the price has reacted to these certain lines of support and resistance, traders psychologically use those price points to help them determine a trade.
Understanding the price movement of cryptos becomes even simpler when you realize every cryptocurrency moves with Bitcoin's price in the long term.
The market cap of cryptocurrency can also be used to identify where or not money will be moving into the stock market. So if money is rushing into cryptos right before the stock market opens, this is generally a signal that cash will flow into the stock market at opening bell, and vice versa. This idea was developed by trader and analyst Greg Mannarino.
Bitcoin:
I drew this negative trendline about two weeks ago. Bitcoin has since broken through that line of resistance and is making it's way back down through this line to continue it's downward trend. I do, however, suspect that this line of resistance will now be used as a line of support and that Bitcoin's price will follow this line all the way down to the green line of support that I drew at the bottom. I have also noticed a recent "double top" formed by bitcoin. This could be a confirmation of my bearish notions. By April, I expect Bitcoin to be priced at $8,000.
Ethereum:
Like I said above, all cryptocurrencies follow Bitcoin's price movement. Ethereum and the rest have developed a similar line of resistance. I think that Ethereum will use this line of resistance as support but continue to head lower, similar to Bitcoin. By April, I think Ethereum will be priced anywhere from $600-670.
Litecoin:
Litecoin is a bit of a different story. It's been known to rise and fall much harder than most cryptos. Unlike the others, Litecoin has failed to break through it's line of resistance and will continue to fall downward. I expect Litecoin to be priced at $120-140 by April.
Bitcoin Cash:
Bitcoin Cash is moving much like Bitcoin, but in a much more bearish manner. There is less faith in BCH, and a lot of FUD about BCH and it's creator, Roger Ver. I expect BCH to be at $800 by April, but I think this coin has much upside. It seems to have sudden and drastic pumps upwards. This may be the result of insider manipulation, but you can still profit from it in the future.
Litecoin/Bitcoin:
I don't do much crypto day trading, but when I do, I trade LTC/BTC. I will sell LTC for BTC at it's highs and then buy back LTC at it's lows. It's a lot similar to forex, for example trading USD for EUR. This market is very young and the sentiment between coins is always changing. One trend I have seen is that in the long term, Litecoin is continuing to become more expensive in terms of Bitcoin. Litecoin was originally created to be priced at 1/4 the price of Bitcoin. Bitcoin has the supply of 21 million while Litecoin has the supply of 84 million. It's hard to say if Litecoin will ever reach 1/4 of Bitcoin's price, but it is conceivable.
In the short term, I expect LTC/BTC to make it's way down to 0.0159 and possibly lower. I however have a buy order set at 0.0159.
Disclaimer: Though I do expect these coins to fall down to the prices stated above by April, I do not think that they will find their bottom by April and may go lower.
Disclaimer: I am not a financial advisor. The articles that I write are for educational purposes only. Do your own research and hold yourself accountable for the investments that you choose to make.
Thanks for Reading!
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