by Jamie Holmes
BTCManager’s 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): Below $4000 on China’s Apparent Move to Ban Exchanges
The price of bitcoin has suffered a sharp drop on September 12-13 as it appears that rumors about the banning of bitcoin exchanges in China has some weight behind it. Litecoin founder Charlie Lee and others revealed that their anonymous sources had confirmed the earlier rumors that exchanges would be banned, while OTC and peer-to-peer trades will carry on as usual. But with no official statement yet, uncertainty lingers. JP Morgan executive Jamie Dimon labelled bitcoin as a fraud, which is a bit like Al Capone dishing out tax advice, and the mainstream media have mistakenly attributed the fall to his skepticism.
On September 13, BTC-USD reached a fresh low at $3800 on the Bitstamp exchange, the lowest since August 22. Looking at the weekly price action, we see that the market failed to sustain above the Fibonacci extension level at $4270.80, with the next support found at $2980, the key fractal resistance from June 2017. Also, we see that the bull run may be invalidated if we do not get a fresh high above $4979.90 next week. The near consecutive record high count will be finished, and we look to count the near consecutive record lows as the market changes direction.
The Awesome Oscillator also turned red this week, giving a warning of the bearish momentum that is taking hold of the market at present. The oscillator remained green for six weeks and buyers should await the next bullish saucer to form to get into long-term buy positions.
Also, since a fractal sell level is imminent at $4979.90, we can use the Fibonacci tool starting from the run up from $1830 to see where the market might find some support. The market is currently sitting just above the 0.618 support at $3776.64, but we look to buy deeper, at the 0.5, 0.382, and 0.236 levels. These Fibonacci retracement levels are much more commonly the bottom of pullbacks than the higher levels. Therefore, we look for any sign of a change in momentum and bulls to reassert control around these three supports which stand at $3404.95, $3033.26 and $2573.38.
The monthly timeframe below shows that bulls dominated in August, bringing BTC-USD from $2855 to finish above $4700. Notice that the Fibonacci supports align with the base line of the Ichimoku indicator, suggesting strong support around $2589 for the month of September.
ETH-USD (Kraken): Ether to Drift to $200?
It wasn’t just bitcoin that had a spectacular August, Ethereum’s ether also climbed higher over the month, closing at the highest ever level on the monthly timeframe at $388.00. August’s candlestick is also a bullish variant of a Marubozu, with two supports found at the base of the candlestick and the 50 percent level.
Already this week, ETH-USD has broken below the first support at the 50 percent level, which lies at $294.89. The next support lies at the open at $201.78. Therefore, we look to place buy orders around $201.78 for the month of September, since as long as this support level holds, the longer-term uptrend remains intact. Also, notice that the base line and conversion line also offer support around the $200 psychological level.
Also, using the Fibonacci ratio, we expect ETH-USD to find a floor just above $200. Looking at the daily timeframe below, we plot the Fibonacci tool over the downward move on September 1 to September 4. On September 13, the market broke below the low at $281.30, opening up a move to $211.03, the first Fibonacci extension level.
LTC-USD (Bitfinex): Bears Test the $60 Handle
Litecoin is down over nine percent against the US Dollar on September 13, with immediate supports found at $55.47 and $48.76, as shown below. The base line provides a key support this week at $48.76 and we look to buy around this level. The $55.47 level is also important, as the market needs to stay above this level to keep the target at $76.46 intact. LTC-USD reached a peak of $93.71 but failed to maintain above the $76.46 Fibonacci level. Last week, the price action closed below $76.46, opening up the $55.47 support. Therefore, we look to buy around $55, as this may be a turning point.
Looking at the daily timeframe, we see the net fractal support lies at $42.00. This fractal buy level also aligns with the support provided by the Ichimoku cloud for September 13 to 21. Therefore, LTC-USD needs to remain above $42.00 for this period, otherwise we will see bears take full control of the market and attempt a takedown to $30. Notice that for the end of September and beginning of October, the Ichimoku cloud is green and rises to around $65-$72 zone. This indicates that equilibrium prices for litecoin are expected to be much higher at this time, suggesting we will see litecoin dip to $55-$42, or perhaps even lower, then the market will slowly return to equilibrium around $65 by the first week of October.
BCC-BTC (Bittrex): Bitcoin Cash to Head Lower Against Bitcoin
Bitcoin Cash looks to head lower, as shown by the daily chart below. The market is below the conversion line and while remaining stable around 0.12 over the past few days, a move toward 0.06 looks likely. Firstly, notice that the lagging line (purple) is moving from above to below the previous price action. Also, the awesome oscillator is looking bearish, with an imminent move into negative territory.
XMR-USD (Kraken): Holding Strong Above $100
Monero is down over four percent on September 13, remaining relatively strong compared to other cryptocurrencies like ether, litecoin, which have experienced a much sharper pullback. The price of monero is holding above $100, but a drop below this psychology level could see a test of $93.71, the 50 percent retracement level of the massive move up from $45 to $150.
Also, we see that the conversion line and base line offer support around this level too, at $94.44 and $88.20 respectively. However, the Fibonacci retracement levels show other possible supports, with a protracted downward trend able to push as low as $58.76. Notice that the peak of the lagging line also corresponds with this level, suggesting a strong support level. However, it is more likely XMR-USD will drift to short-term equilibrium around $90, as indicated by the conversion line.
DASH-USD (Kraken): Closing in on Supports at $265 and $229.60
Interestingly, DASH-USD has already confirmed a fractal sell level at $415, the recent all-time high, whereas bitcoin is still waiting for this fractal to form. The Fibonacci analysis shows that DASH-USD is likely to find support and reverse the current downtrend at $265, $229.60 or $185.80. What is also interesting about DASH, compared to other large-cap cryptocurrencies, is that the conversion line is moving higher this week. The conversion line offers support at $272.50, just above the 50 percent Fibonacci retracement.
A weekly close above $272.50 for DASH will be considered bullish. However, a weekly close below $272.50 will point to further downside and we should observe the market’s behaviour closely when approaching the Fibonacci support levels mentioned above.
ARK-BTC (Bittrex): Important Resistance Stands at 0.0019
In our previous cryptocurrency market analysis, we mentioned that ARK-BTC was breaking above a fractal resistance, necessitating a bullish outlook and buy positions. In under a month, the cryptopair doubled, jumping from 0.00044 to a fresh high of 0.00100 this week. The upward trend in the conversion line suggests that the market will continue to move higher. Also, last week’s close broke another fractal resistance, suggesting bullish momentum will remain strong. We look to target the 50 percent level of the huge bearish candlestick, which provides resistance at 0.00196608, shown below. Moreover, we also see that the base line is starting to form and is aligned with the 50 percent level of the candlestick at 0.0019. A weekly close below the conversion line will invalidate the bullish outlook.