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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 of $9.5. We anticipate a strong defense of this level by the bears.
If, however, the bulls fail to break out, the cryptocurrency can again slide back to the recent low of $3.3. Any break of this support can resume the downtrend.
After the long downtrend, we anticipate the virtual currency to enter a consolidation period before breaking out to a new uptrend. Therefore, long-term investors can wait for a reversal setup to form before building positions. However, short-term traders can stay on the long side after the price breaks out and closes above the downtrend line.
Featured cryptocurrency* — STRAT/USD
Stratis is currently at the 40th place in terms of market capitalization. Recently, it released the first Turing-complete smart contracts to execute .NET code on-chain and its first sidechain, Cirrus, to the Stratis mainchain. These will provide the businesses and the blockchain developers the perfect platform to create bespoke blockchains tailored to specific applications.
The past few months have seen a slew of announcements by the Stratis group. It partnered with MediConnect, the company that focuses on blockchain solutions for the pharmaceutical industry.
It also became a certified Microsoft Independent Software Vendor (ISV) a couple of months back, which was a major step ahead. With a positive fundamental news flow, is it a good time to buy the cryptocurrency? Let’s see.
The STRAT/USD pair was severely hit by the ongoing bear market. Its prices plunged from a high of $24.39960825 in early January of this year to a low of $0.53353976 in mid-December, a loss of 97.81 percent.
However, the positive thing is that it has participated in the recent pullback.
From its low of $0.53353976 on Dec. 14, it recovered to a high of $1.84123616 on Dec. 24, a rally of 245 percent in 10 days. Currently, the bulls are attempting to stall the pullback at the 20-day EMA.
If successful, the cryptocurrency will again attempt to move toward the overhead resistance of $1.91493444. If this level is crossed, the recovery can extend to $2.14656768. We anticipate a new uptrend to start if the bulls sustain the price above this level.
Traders can wait for the price to rebound from the 20-day EMA and rise above $1.46 to establish long positions with the stop loss placed just below $1.15. Partial profits can be booked close to $1.84 and the stops on the rest can be trailed higher.
However, if the bears sink Stratis below the moving averages, it will lose its momentum and can correct to $0.81338679, below which a retest of the low is probable.
NEO/USD
NEO has announced their second edition of DevCon on Feb. 19. The founder of NEO, Da Hongfei, is undeterred by the current bear market. He believes that the price of the cryptocurrency only tells a part of the story, as it is primarily driven by sentiment. Hongfei continues to focus on the project and the ecosystem and has called the current phase as, “ContiNEO – We keep on going,” Forbes reported.
The NEO/USD pair is in a strong downtrend. From a high of $200.59839784 reached in mid-January of this year, it dropped to a low of $5.4808 in mid-December. Currently, the bulls are attempting to pull back from the oversold conditions.
Any recovery will face a stiff resistance at $13.60337627. Previously, this level had acted as a strong support for about three months, so it will act as a strong resistance now.
If the bulls fail to scale the overhead resistance, we anticipate a consolidation period of a few days. The downtrend will resume if the bears plunge the cryptocurrency below $5.4808 once again. The traders should wait for a trend reversal before initiating fresh long positions in it.
IOTA/USD
IOTA has been attempting to climb back into the top 10 cryptocurrencies by market capitalization but has not been successful. Last week, it was the fourth best performer. How does its chart look now?
The IOTA/USD pair is attempting to form a basing pattern. It is currently facing selling at the previous support-turned-resistance of $0.4037. If the bears continue to defend this level, we anticipate a consolidation between $0.2051 and $0.4037 for a few weeks.
Contrary to our expectation, if the bulls break out of $0.4037, it will indicate that the markets have rejected the lower levels. In such a case, a move to $0.8152 is probable.
Aggressive traders can look to enter long positions on a close above $0.4037, whereas the long-term investors can wait for a new uptrend to start before buying it.
BNB/USD
In a letter titled “2018 Binance Year-End Review,” Binance CEO Changpeng Zhao has painted a positive picture of the crypto industry. He has also outlined the various plans for the Binance exchange and its own cryptocurrency. What does the chart project? Let’s find out.
The BNB/USD pair has been a relative outperformer. It successfully held the support at $4.5200621 for four weeks, after which the bulls started a pullback attempt.
For the past two weeks, the bulls have kept the price above $5.4666, which is a positive sign. This shows that the markets have rejected the lower levels. The digital currency is likely to rise to the resistance line of the descending channel, closer to $8.25. The short-term traders can attempt to ride this move higher.
However, the long-term investors should wait for the price to break out of the channel before attempting a trade in it. Our bullish view will be invalidated if the bears plunge the digital currency below $4.1723848.
The market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.
*Disclaimer: Stratis is a featured cryptocurrency from one of Cointelegraph’s sponsors, and its inclusion did not affect this price analysis.
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