Ana Grabundzija · 11 hours ago · 2 min read
Ethereum · Litecoin · XRP › Technical Analysis
Ethereum, XRP and Litecoin look bearish against BTC, but promising against USD
Disclaimer: This article contains technical analysis, which is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The content presented in this article is the opinion of the author. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence and consult with a financial advisor before making any investment decisions.
At the moment, altcoins continue limping without any significant price movement. Meanwhile, Bitcoin is back above $10,000 and recently reached a 70 percent market dominance. Against the BTC, most of the cryptocurrencies in the space seem like they are doomed to continue depreciating in value.
Peter Brandt, a renowned technical analyst, recently emphasized that Bitcoin is the only cryptocurrency with “real and lasting value.” After taking a look at the trading pairs ETH/BTC, XRP/BTC and LTC/BTC the 40-years trading veteran came to the conclusion that “altcoins are to Bitcoin what lead is to gold.”
— Peter Brandt (@PeterLBrandt) September 2, 2019
Although Ethereum, XRP, and Litecoin look extremely bearish against BTC, their future looks brighter against the U.S. dollar.
The TD sequential indicator is doing an outstanding job forecasting Ethereum’s price movement since the beginning of the year, based on the 1-week chart.
During the week of Feb. 4, it gave a buy signal (in the form of an aggressive thirteen) that was succeeded by a 77 percent bullish impulse that took this cryptocurrency from $102.50 to all the way up to $181.30. After the major upswing, the TD sequential presented a sell signal (in the form of a green nine) causing ETH to retrace nearly 21 percent. Finally, this technical index gave another sell signal (in the form of a green nine) during the week of July 1 that was followed by a 48.40 percent correction. Ethereum plunged from $318.30 to $164.10 in a matter of eight weeks to reach the setup trendline.
Now, the TD sequential indicator is signaling that this cryptocurrency could be about to rebound. In fact, ETH is sitting on a red nine candlestick above the setup trendline, which is a buy signal based on this indicator. Thus, Ethereum could be bound for one-to-four weeks of upside movement or the beginning of a new countdown that could take it to new yearly highs.
If ETH is indeed likely to rebound from the current price level, it will have to first move above the 100-three-day moving average, based on the 3-day chart. A break above this moving average has the potential to take this cryptocurrency up to test the next level of resistance around the 150-three-day moving average, $220.
A move up to $220 is very likely based on the 1-day chart. As a matter of fact, a falling wedge appears to be developing under this timeframe. This is a technical formation that signals a price reversal from bearish to bullish. Upon the breakout point, the falling wedge predicts a 38 percent surge that could take ETH to surpass the resistance given by the 150-three-day moving average (based on the 3-day chart) and reach $242. A spike in the buying pressure behind this cryptocurrency will confirm all the bullish signals seen before.
Nonetheless, if Ethereum is bound to continue falling it may try and test the next level of support around $145.
XRP continues lurching. While Bitcoin is up 230 percent from the low of December 2018, this cryptocurrency is down 7 percent. Some of the most prominent analysts in the industry are placing the blame on Ripple for the major XRP sell-off seen since 2018.
In fact, Ripple revealed a substantial increase in XRP sales in its latest quarterly report. In total, the company sold $251.51 million in XRP during Q2 2019. This represents a 48 percent increase from the previous quarter where it sold $169.42 million worth of XRP.
Although the firm plans to take a more conservative approach to XRP sales in Q3 2019, a popular Twitter account that tracks large cryptocurrency transactions recently reported that 1 billion XRP, worth over $258 million, were unlocked from escrow.
🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 1,000,000,000 #XRP (258,488,781 USD) unlocked from escrow at Ripple Escrow wallet
— Whale Alert (@whale_alert) September 1, 2019
This is a clear sign that the sell-off will not stop anytime soon, as director of research at Messari Eric Turner explained:
“Ripple keeps selling because it is a major source of revenue for them. I don’t expect them to stop selling any time soon. If someone gave you a printing press that spits out hundreds of millions of dollars a quarter, would you stop using it?”
Even though Ripple CEO Brad Garlinghouse tried to address the “FUD” around XRP, it will be wiser to remain out of it due to the lack of clarity. Based on the 1-week chart, XRP could soon drop down to the next level of support that sits around $0.1975 or even lower as Peter Brandt stated if the selling pressure behind it increases.
Based on the Fibonacci retracement indicator (which is composed of horizontal lines that refer to areas of support and resistance associated with a percentage based on how much of a prior move the price has retraced) Litecoin spent over a month consolidating between the 38.2 and 50 percent Fibonacci retracement area.
Following the consolidation period, LTC dropped 31 percent to reach the 65 to 61.8 percent Fibonacci retracement zone. Now that this cryptocurrency is trading around this area, it could likely rebound since this is considered as the ‘golden’ retracement zone.
If Litecoin is indeed bound for an upswing from the current price levels, it could find some level of resistance around $85, which is where the 50 percent Fibonacci retracement zone is at. However, a break below the 65 to 61.8 percent Fibonacci retracement area is a strong signal of a trend reversal from bullish to bearish.
The TD sequential indicator also forecasts that Litecoin could soon experience a bullish impulse. Based on the 3-day chart, this technical index is giving two different buy signal. The first one is a red nine that predicts three-to-twelve days of upside movement or the beginning of a new bullish countdown. The second one is an aggressive thirteen that adds credibility to a new uptrend.
The last time the TD sequential indicator presented an aggressive thirteen under this timeframe was in Dec. 27, 2018, which was succeeded by a 421 percent upswing. An increase in the buying pressure behind this cryptocurrency could validate all the bullish signals previously mentioned taking it up to the 50 or even the 38.2 percent Fibonacci retracement, as seen on the 1-week chart.
In addition, a bullish divergence between the relative strength index (RSI) and the price of LTC can be seen forming on the 1-day chart. Divergences occur when an oscillator such as the RSI disagrees with the actual price movement. Thus, an RSI making a series of higher lows while prices are declining is indicative of an improving trend and the probability for a trend change increases.
Although the cryptocurrencies previously analyzed look bearish against BTC, Ethereum and Litecoin could be bound for a major upswing against the U.S. dollar. A spike in volume behind these two cryptocurrencies could confirm the bullish signals seen across the different timeframes. Both ETH and LTC are signaling a 23 percent upswing that could take them to $220 and $85, respectively.
On the other hand, the XRP sell-off by Ripple could be taken as a sign to remain cautious about this cryptocurrency. It is worth noting that co-founder Jed McCaleb, who is no longer at Ripple, is allegedly selling half a million XRP on a daily basis, according to Coin Metrics. Meanwhile, Ripple’s CTO David Schwartz sold 2.8 million XRP worth roughly $810,000 since the beginning of 2019. The ongoing sale of XRP could have a direct impact on the selling pressure behind this cryptocurrency depreciating its value as time goes by.
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