by Jamie Holmes
Every week BTCManager provides an outlook of the best opportunities in cryptocurrency markets. This week, we focus on the biggest cryptocurrencies such as Bitcoin, Ether, and Monero while also highlighting some opportunities for up and coming altcoins that have attracted some attention.
Following a breach of the recent high at $755.07 on the BitStamp exchange, which we highlighted in our previous cryptocurrency outlook, bullish momentum gains dominance in the market and we expect this to continue with strong gains posted last week.
The market just missed out on an attempt at the $778.85 fractal resistance and extended back down to $750. However, the upward surge has returned this week and we anticipate a break of the $778.85 fractal sell level, driven by higher volumes and more certainty of direction in the market.
See that for the week ending November 27, a Doji candlestick has formed indicating indecision but last week’s candlestick shows the best week for bitcoin in the past month. Therefore, it is likely bulls will be emboldened by this and continue to take the market higher, especially with New Year approaching, whereby traders will want to cash in on their profits for the year.
This week’s outlook is illustrated below. The upward march towards the psychological $800 level looks to continue. Firstly, notice that the fractal sell level that was potentially forming was invalidated last week with a move above $755.07. Therefore, we look to buy at market and limit by orders just above the fractal sell level at $778.85.
Moreover, from the chart we see that volumes are rising and more interest in BTC-USD is indicated comparing the two most recent weekly trading sessions. As volume proceeds price action, where is a higher chance of bitcoin going higher in the week ahead.
While the long-term, upward momentum is dominant, when looking at the 4-hour price action below, we see that a fractal resistance looks to form at $772.01 and we could see some short-term downward momentum taking us to $747.50.
If the market is unable to surpass $772.01 within the next hour then a fractal sell level will have formed and this will be indicative that downward momentum will dominate. Since the market will be very close to a resistance level, it will follow the path with the least opposition and try to establish a support.
The Green Ichimoku cloud will provide that support from $747.50 to around $753.00 for the remainder of this week. The conversion line and base line offer support around the $760.00 level as well. Therefore, limit buy orders could be placed at all four of these levels and enter into the longer, ongoing uptrend.
Bearish sentiment extended and looked as if Ether was doomed in recent days. In our previous cryptocurrency outlook, we identified a critical buy area between $6.47 and $7.00. Historically, the $7.00 handle has held even under the intense pressure of the DAO hack, so it is surprising to see it temporarily broke that level, although not unanticipated.
Looking at the current outlook below, we see that ETH-USD has recovered and regained the $7.00 level, trading at $8.36 at the time of writing. After six weeks of consecutive losses, it seems now that sellers in the market are finally exhausted and looks as if a bullish hammer candlestick will form this week. If this candlestick pattern is validated, then we have a high probability that the downward trend has been extinguished and we should see more gains in the weeks ahead.
However, on balance the Ichimoku cloud is turning red, so for a more definite long-term bullish outlook, we look for a weekly close above the conversion line. Therefore, ETH-USD needs to close above $9.4098 on December 11. If this is achieved, then Ether will be a strong buy.
Also, up until Christmas Day, we require ETH-USD to remain above the recent low at $5.92 to confirm a fractal buy level forming, and hence confirming bullish momentum. Notice that the market will now look to find resistance, with the most recent fractal resistance at $14.45, providing a lot of leverage for gains in ETH-USD in the weeks ahead.
Looking at the 4-hour price action, we see ETH-USD is in equilibrium and a short-term break is imminent. However, the risks are more skewed to the upside given that the Ichimoku cloud has turned green in color and given that the conversion line (blue) is trending higher than the base line (red), i.e. indicating bullish momentum.
An upward break above the Ichimoku cloud is required for a short-term bullish outlook. However, the market could also tend to the downside and test support at $8.11 (conversion line) and $7.40 (base line).
Ripple broke below 0.00000900 against bitcoin on December 1, foretelling of a bearish outlook as mentioned in our previous cryptocurrency outlook. The market now looks to have established a floor just above 0.000080 and now looks to trend higher.
The chart below shows the daily price action for XRP-BTC. On December 7, the market managed to close above the conversion line, which was providing resistance around 0.00000894. Now that the market has moved above the conversion line, we should see further gains in the days ahead. Notice that today sellers have tried to move the market back below this level but have been rejected so far.
After such a long-term downtrend, we expect XRP-BTC to return to equilibrium, as indicated by the red Ichimoku cloud around the 0.00001000 to 0.00001200 area as we lead into 2017. This will be further confirmed if the market manages to close above the base line, which offers resistance at 0.00001000.
However, it may be a better strategy to set limit sell orders at the resistance at 0.0000100, as given the market is below the Ichimoku cloud and has not yet changed colour to green, this suggests that sellers are still in control of the market.
Monero extending to a fresh high at $9.379 but has since retreated lowe. The weekly price action for XMR-USD, shown below, illustrates that the market is currently trapped between the base line and conversion line. Therefore, this could go either way but there seems to be more risk to the downside this week.
First, the base line is higher than the conversion line. The base line provides resistance at $8.17 whereas the conversion line provides support at $6.78. We look for a long-term buy if the week’s close for monero is higher than $8.17 whereas we look to sell if the week’s close is lower than $6.78.
It looks as if Ethereum Classic’s token is started to form a foundation for further gains. Firstly, the cryptocurrency has benefitted from a tailcoat effect, riding the upward surge of Ether. Secondly, the market may have to digest some important information, with the upcoming Ethereum Classic monetary policy set to be revealed.
After the conversion line (blue) has started to flatline, we can now be confident that the market will tend to this resistance, currently at $0.9724. Therefore, we look for a buy in ETC-USD with an initial target of $1.20. Also, notice that the lagging line (purple) is starting to trend higher and looks like support has been established. Consequently, the market will now lok to establish a ceiling.
A sell is only validated if the market moves below $0.7047, as shown above, and in this case we target $0.50.
In response to the recent news on the expansion of partners and the network of Stellar, the price of the cryptocurrency has jumped massively, piercing above the Ichimoku cloud. The chart below displays the daily price action for STR-USD. On December 6, we see that a variant of the bullish marubozu candlestick formed. Therefore, we suggest set limit buy orders at the 50 percent and open levels of this candlestick, at 0.00209131 and 0.00152614 respectively.
Also, notice that the Ichimoku cloud has changed to green, foretelling of further appreciation in the week ahead. Notice also that a fractal support looks to be forming at the low on December 6, indicated by the blue horizontal ray on the chart.
The huge price increase over the past few days has boosted the Stellar network to number 16 of the largest cryptocurrencies by market capitalization, ahead of Factom and Lisk.
GameCredits announced their integration with the popular online game Fragoria this week and we could see some interesting price action in the weeks ahead. The chart below shows the weekly price action for GAME-BTC and the market is facing a key resistance level. This is indicated on the chart below by the blue horizontal ray at 0.00033514. Therefore, a close higher than this level at the end of the week will indicate an intensification of bullish momentum and we could see GAME-BTC reach new highs.
Secondly, notice that the Ichimoku cloud and conversion line are starting to trend higher after remaining horizontal for several weeks. This fact indicates that bullish momentum is only starting to emerge and could strengthen throughout December. The Awesome Oscillator also support this motion, as this week the oscillator is trending higher and is green.
While market participants are unsure of direction so far this week, the conversion line has held up as support, at 0.00027, suggesting upward momentum will continue. Like Stellar, GameCredits have pushed their way past more established cryptocurrencies, standing at number 19 in terms of market capitalization.