Welcome to another weekly cryptocurrency market analysis. As you may know, the aim of our weekly analysis is to provide you with a technical guide on how to profit from trading/investing in cryptocurrency. Although it is important to state that like traditional financial markets such as stocks or foreign exchange trading nothing is cast in stone.
As is our modus operandi (MO) for analysis we use market fundamentals, market behaviour and sentiments. While for technical analysis, we adhere strictly to demand and supply.
The XRP chart analysis shows that the bulls have taken charge, eliminating close supply zones (resistance levels) on the lower time frames. Price rebound off the demand zone at $0.29450 on the daily time frame retested the demand zone and rallied again. This proves that there is a clear demand in control and bullish sentiment. If price closes above the closest supply zone at $0.32 we should expect a strong rally in price.
The market sentiment of XRP is currently bullish but the bears are active in the market. Though we expect an uprise as more buyers step into the market as the price momentum has been maintained above $0.30250.
With a clear significant price correlation between litecoin and bitcoin, litecoin rallied with bitcoin this Friday breaking our expectations of reaching a demand zone at $68. With a significant weekly performance of 46.02% and a volatility of 11.97% we expect litecoin to follow the price action of bitcoin.
From a technical analysis standpoint, the daily time frame chart reflects a clearly defined strong uptrend as the price rallied off our dynamic demand zone at $69. Demand has consistently eliminated the supply zones at the lower time frame and as the price is heading toward a major resistance point (supply) at $99 we expect it to consolidate around that region in a couple of days, continue upwards or retest the last demand zone. Hence, since the sentiment is bullish we are expecting to go long and take some profits at a $100 psychological mark.
Last week, we envisaged a drop to our demand zone of interest which is between $144-$146. This week ethereum followed suit and has continued to make its bearish price movement as envisaged. On Sunday the price of ethereum reached our demand zone of interest that is at $144-$146 and rallied off. Etherum is currently making a rally in tandem with bitcoin with respect with its correlation coefficient record, hence a bullish sentiment has set in and we expect more buyers to come in and drive the price higher. Though we look forward to taking in some profits at $180 for the short term investors/traders.
This week Bitcoin has maintained its current price above $5000 reaching a new high of $5820, with an increased market cap of $103.74b while supply maintained above 17.6m based on data from coincap. These fundamentals show a clear demand dominance with the liquidity to mop up the short supply marking a strong demand. These fundamentals have consistently voided every technical analysis suggesting a fall in price. Hence this bullish sentiment is likely to last longer than expected.
The advice is to make your entry on the retracement to the supply zone on a lower time frame say a one-hour time frame.
Disclaimer: This article is provided for information purposes only without regard to any particular user’s investment objectives, financial situation, or means, and Quidax is not soliciting any action based upon it. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Adviser.