by Jamie Holmes
Our Weekly Cryptocurrency Outlook highlights the price action and technical indicators on a long-term basis to identify the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.
BTC-USD (Bitstamp): Extension to $1331.81
The 4-hour chart below displays bitcoin's break of $1220.00, the previous all-time high on the Bitstamp exchange. Notice that in the run up to $1220.00, BTC-USD retreated to the 50 percent Fibonacci level and found support around $1129.53. Since testing this support on February 25, bitcoin has continued to appreciate against the dollar, with a break of $1220.00 opening up the Fibonacci extension level at $1331.81.
Buying interest should now be found around the former resistance now turned support at $1220.00; as long as BTC-USD remains above this level, the market will tend toward $1131.81.
Also, notice that over the past few 4-hour sessions, volumes have risen signficantly, pointing to a continuation of the upward move in the days ahead. Bullish momentum is strong and starting to gain the upper hand, as displayed by the Awesome Oscillator, which has switched to green colored bars and the bars are moving higher, forming a nice curve after establishing a low in the first 4-hour session of March 1.
The weekly chart below shows that a fractal break of $1139.89 is confirmed as last week's price action closed higher at $1179.05, with buyers beaten back down from the $1220.00 level. Also, volumes are rising week-on-week, suggesting the long-term outlook will remain bullish with volumes during the week beginning February 20 almost double that of the prior week.
Bullish momentum is also strengthening as the Awesome Oscillator moves higher and remains green in color. The conversion line, however, is flattening suggesting momentum is becoming neutral and provides a support zone around $991.17.
ETH-USD (Kraken): $16 Psychological Holds as Resistance
Ether reaches our targets of $14.45 and $15.23, with ETH-USD currently trading around $15.82. However, the weekly chart below indicates that ether will attempt to test the all-time high at $21.48995. All fractal resistances have been broken, leaving $12.48995 the only one remaining, suggesting the market will tend toward this level.
Firstly, the fractal resistance at $15.23 looks to break this week and will now provide a key support level. Secondly, notice the steep upward climb of the conversion line and base line, which indicates that bullish momentum is very strong. Strong bullish momentum is also revealed by the Awesome Oscillator which continues to trend higher and looks to be far from its peak.
Thirdly, notice that the red Ichimoku cloud projected ahead is starting to unravel and looks to be in the process of changing color to green. Once confirmed, the emergence of a green Ichimoku cloud suggests the establishment of a long-term uptrend.
In the event of a sell-off, the green Ichimoku cloud should provide a support zone around $10.95 and $12.80.
DASH-USD (Poloniex): Breaks $30 With Ease, $45 Next?
DASH-USD has gone onto post fresh all-time highs, just short of the psychological $40.00 handle. The weekly chart below shows that the most recent fractal buy level lies just above the $8.00 level. What is the significance of this? Well, it suggests that leverage for a downward move is very favourable, with $8.00 anticipated to be a floor when the market runs out of steam. It also suggests that if the market does not reach this low, a new fractal buy level will need to be formed.
However, the market remains above the green Ichimoku cloud, the conversion line and base line are climbing even higher this week, pointing to further gains. But after making five near consecutive higher highs, DASH-USD is due for a downturn soon. For instance, the chart below also shows the Fibonacci extension level for when DASH made a run from around $6 to $15.249 in 2016. So far, the market has achieved all but one of the Fibonacci extension levels, that is at $43.00. Therefore, the structure of the market suggests that limit sell orders should be placed just above $43.00.
Moreover, instead of trying to find the top of the market and selling, we should place limit sell orders just below each of the extension levels displayed below. For example, once the market breaks below the 361.8 percent extension level at $37.70, we should see downward momentum begin to strengthen. Another limit sell order is placed below the next extension level at $29.12 and so on.
The 4-hour chart below shows that bulls may be starting to exhaust themselves already, with a gravestone doji candlestick forming in the most recent 4-hour session. The market has achived the Fibonacci extension target at $35.93 and should provide support going forward. If $35.93 is broken, the market will then look to test $30.00.
On the other hand, if bullish dominance continues, then the next Fibonacci level at $45.53 will provide resistance and be an optimal entry into sell positions. Therefore, we could place limit sell orders just above $45.53. Alternatively, we could enter into short positions on DASH-USD once the 4-hour conversion line is broken and the price closes below this level, currently at $34.04.
XMR-USD (Poloniex): Waiting for a Breakout
The weekly chart below for XMR-USD shows a neutral outlook. Last week, a fractal buy level was invalidated as monero made a new low at $11.42. The market remains trapped between the conversion line, providing resistance at $14.10, and the base line, providing support at $11.33. Therefore, we await the weekly close of the current candlestick to determine long-term positions. For instance, a close higher than $14.10 will necessitate a long-term bullish outlook and long positions are favored. Given a break of the conversion line, the market will then look to test fractal resistance at $18.46. On the other hand, a close lower than $11.33 will favor short positions.
The market now needs to remain above $11.42 for this week and next to also support a bullish outlook, so that a fractal buy level forms. However, a break below $11.42 will invalidate this potential fractal support and point to a bearish outlook, with the market likely to tend toward the support zone provided by the Ichimoku cloud (around $8-$7). Therefore, we set limit sell orders just below $11.42 to capitalize on a bearish breakout.
Notice that bearish momentum is starting to gain a foothold in the market, as suggested by the Awesome Oscillator. The oscillator has remained red in color for the past five weeks and is moving lower compared to last week, currently at 4.19.
XEM-BTC (Poloniex): Pullback Over, Uptrend Continues
XEM-BTC continues its uptrend this week, up roughly 9 percent against bitcoin in the past 24 hours. The weekly chart is displayed below and shows that after finding support above the conversion line, the market continues higher. In our previous weekly outlook, we stated that XEM-BTC was likely to continue the uptrend and now looks to continue tending towards the fractal resistance at 0.00000719.
A weekly close above the base line will give further bullish confirmation and increase the likelihood of uptrend continuation. Therefore, we look to enter long positions if the weekly close is higher than 0.00000668.
The Fibonacci retracement and extension levels are drawn on the chart for the upward surge of XEM-BTC since January 2017. The upward move is anticipated to continue as the market found support just above the 50 percent Fibonacci retracement level at 0.00000502, which aligns nicely with the conversion line. The market has broken through resistances and heads higher. Limit buy orders are suggested just above the remianing Fibonacci resistance at 0.00000719 and the Fibonacci extension level at 0.00000987.
Our target remains the Ichimoku cloud, which indicates long-term equilibrium. Notice how the second extension level at 0.00001421 aligns nicely with the upper span of the red Ichimoku cloud, suggesting this is an important resistance area and where the long-term bullish move may reverse.