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New Highs In Bitcoin but Alts Remain Weak

I discuss the new highs in Bitcoin as prices moved back over $6000 USD plus give a technical analysis update for Ethereum, Litecoin, NEO & OmiseGo.

We continue to see altcoins dump on bitcoin rallies and many are wondering if we’ll ever see the kind of massive altcoin rally we saw earlier this year. I’ll share my thoughts on the total market cap and bitcoin’s dominance.

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Top Books for Technical Analysis

Several of you have asked me for book recommendations on technical analysis and trading.  Here are my top book picks for those wanting to learn more about the topic.

There are many good ones out there so narrowing it down to 5 was no easy task.  It’s also important to keep in mind that while technical analysis is incredibly important to trading, it’s not the complete tool-set.  You must also learn about trading psychology and money management.  Those disciplines are just as important, if not more so.

Finally, remember that technical analysis is a skill that must be applied within the context of the general market conditions.  It’s not just a mechanical set of rules to follow but is often more of an art.  Over time, you will get better at it if you continue to learn and practice.

Here are are my top choices for those wanting to learn technical analysis:

1. How To Make Money In Stocks – William O’Neil

2. Volume Price Analysis – Anna Coulling

3. Japanese Candlestick Charting – Steve Nison

4. Technical Analysis of the Financial Markets – John Murphy

5. Encyclopedia of Chart Patterns – Thomas Bulkowski

In the video linked below, I discuss a little more about each book and why I like it.  I also point out some great titles to consider beyond these five.

 

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Bitcoin & NEO Remain Strong

Bitcoin has risen from the lows of around $3000 in mid-September back to near $4400.  We are now at what was major resistance before the break.  I expect there to be a pause here.  BTC has been riding up a nice channel since around $3500 so any break of that trend to the downside will signal that pause.

NEO has also asserted itself as a leader in this recent rally and continues to shows great strength.  This will be a key week for both Bitcoin & NEO as they are right at resistance points.  NEO however has recently broken out of bull flag pattern and if it gets above 850k satoshi level, we could see another strong leg up to around 1000.

I posted a video recently outlining the key levels I’m watching for Bitcoin, NEO, Ethereum and a handful of altcoins I’m watching here.  In summary, the market remains in bull-mode but a pullback would be normal here.  We’re starting to hear more noise around another coming hard fork for Bitcoin in November and counties around the world continue to sound the alarms on ICOs and Cryptocurrency regulation.  I do not expect that to go away anytime soon.

Below is the latest video with the technical analysis on the coins I mentioned here.

 

 

 

Selling Strategies

Below are the videos and notes from the recent live streams covering selling strategies.  This covers my thoughts on when to take profits and when respond to sell signals.

Download the Notes HERE

 

Download the Notes HERE

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The Bull is Back!

August 1st is finally behind us and the markets have decided to move ahead.  While there will always be dramatic events, uncertainty and volatility in the cryptocurrency space, the biggest one in recent past has been the fork in Bitcoin.

I believe the markets are now in bull mode and we will see a series of higher highs.  The bottom was in after Bitcoin hit $1800 and while I started edging back after that, the hard fork cause more uncertainty resulting in a scaling back.  Now, Bitcoin is looking to make all-time highs and Litecoin & Ethereum are consolidating nicely. All three are nearing upper resistance and will signal their next move very soon.

Below are charts for the big three.

Bitcoin

 

Ethereum

Litecoin

 

 

Beyond these leaders, several altcoins have already made tremendous gains and I see more setting up to break out here.  In a recent newsletter, I covered several of these including NEO/Antshares, WAVES, OmiseGo, EOS, NEM and Stratis.

My top pick has been NEO and has finally staged a breakout following a long consolidation during the recent downtrend in the markets.  It’s near resistance now but a break above that could see it go to all-time highs versus BTC.  Against fiat, we’re nearly there and will exceed ATH prices sooner due to the higher BTC price.

Here is a link to the full newsletter.

To keep up with timely updates, follow me on Twitter and subscribe to the free newsletter if you have not already!

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How will the market react on August 1st. My Thoughts…

July has been one of the most volatile months in recently history for the cryptocurrency markets and as we approach August 1st, it could get even more wild.  I posted a video recently on my thoughts for the upcoming week.  Bitcoin and Bitcoin Cash will be huge drivers of what happens this weeks.  We’ll take an in-depth look at the charts for Bitcoin, Ethereum, Litecoin, Dash, EOS and Antshares/NEO.

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Bitcoin $3000 Within Reach

In just one week’s time, Bitcoin went from an extreme low of $1800 to a high of $2900 as fears of a hardfork began to dissipate.  I posted a video as the market had bottomed and I called for a change in tone as I had expected the downtrend to be ending.  I also pointed out several altcoins I was picking up.

At that time, Bitcoin was $2200 and several of the altcoins were showing good bottoming formations.  Among the few I mentioned were Stratis, Anshares/NEO and NEM.  Since that video, we have seen explosive moves in those coins.  For example, Stratis has already posted gains of over 60%!

 

The market has since taken a pause and many of those moves are being consolidated with the price of Bitcoin tightening up around $2700 and Ethereum at $220.  It would not be unusual to see some pullbacks here but there is no doubt the market sentiment has changed and we are now in bull-mode.  I’m watching for a breakout on BTC around $2900 and ETH around $240.

Ethereum still has a long way to go before it gets back to all-time high prices but Bitcoin is only a few percent away.  A break out above $3000 will lead to a run up in prices that could see Bitcoin move very quickly.  This would also have a positive effect on the current leading altcoins which could see prices move higher.

Apart from Bitcoin & Ethereum, I continue to like the price in action in Stratis, NEM, Litcoin, Dash, Siacoin & Antshares/NEO.  There are also several smaller-cap names which are showing strength off the lows here.  Among those are PIVX, Ubiq, Storj, GameCredits & Iconomi to name a few.

Below is the latest video following what I dubbed “The Greatest Day in Bitcoin, Ever!”.

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Was That the Bottom?

The cryptocurrency markets have seen extreme selling in the past few days following the larger downtrend we’ve been in since June.  Total market cap has come down from $115 Billion to $80 Billion.  I’ve covered the selling several times in recent videos (linked below) and there is no doubt that the trend is still down.  However, one has to ask: “Was the recent selling capitulation or will we see another leg down?”

My experience in the markets is that tops don’t form in a day and neither do bottoms.   Perhaps the recent selling was the low-point for now and we bounce around for a while before going up again.  Perhaps we see another sharp leg down.  Either way, the biggest clues will come from Bitcoin so let’s look at that chart to see if we’ve hit a bottom.

Above is the daily chart of BTC with Fibonacci levels being measured from $1200 up to the top at $3000.  It’s clear a descending triangle is forming following the big drop in early June.  This is a bearish formation that leads to a sharp leg down if the support zone is broken.  Right now, that support zone is between $2250 and $2400.  Bitcoin is currently right in the middle of that zone which also happens to coincide with the 38% retracement level.  So far, support is holding and the RSI is still around 40, both positive signs for now.

The shorter term moving averages are now turning bearish as well.  If the current support levels break, the next stop is $2100.  If that level breaks then the next level of support is the zone between $1800 – $1900.  If we get that far down, that is where I believe Bitcoin will form a solid bottom and would be a tremendous buying opportunity.

I would wait to see the $2500 level recaptured and ultimately the $2600 level before feeling confident about a new rally and making larger capital commitments.

Below is the daily chart of Ethereum with Fibonacci levels being measured from $53 up to the top at $400.

The drop in Ethereum has been steep and quick.  The selling in ETH has also triggered deep corrections in most of the other altcoins.  While the downtrend is still in tact, we are currently as key Fibonacci ratio that historically acts as major support.  Volume has been very high today so this may be a low point for now.

If this level does not hold, then we could see prices drop to the $140-$160 range as that coincides with the last base as well as the next Fib level.  We are currently deeply oversold so a rally up to the $240 area could be next.  I would like to see the downtrend broken and the $260 and ultimately the $300 marks recaptured.  If you like ETH long-term, this may be a great place to look at it.

Should You Sell Here?

If it were me, I would wait at this point and assess how strong the bounce is.  We could rally strong from here but I would keep a close watch on these support levels because if they break, then we could see another sharp leg down.

Should You Buy Here?

I am personally not making an new buys right now.  I may look for some short-term trades if the rally begins but will likely take profits as we approach resistance and reassess the markets from there.

There are several altcoins that are key support levels and have already seen deep corrections.  Many of these could offer great buying opportunities here for longer term value plays but I would not expect huge gains right away.  Some of those right now are Siacoin, Stratis, Golem, Anshares/NEO, Waves and NEM.  I would also be looking at Litecoin and Ethereum.

With all of these however, one should keep a very tight stop loss in place (physical or mental) and be ready to step aside and if heavy selling ensues.

My Approach Right Now

I don’t like to post my portfolio allocations because I can change them often and sometime drastically based on market conditions.  So full disclaimer, by the time you read this, it may be different.

First off, I’m am in a 50% cash position and have increased my fiat from 25% just a few days ago.  I continue to take a conservative approach right now and remain cautious with any new buys.  As of this writing, my largest holding is Litecoin and it has served me well during this recent selling.  I still have a little Bitcoin but have sold a lot of it and will wait before getting back in.  I have essentially no Ethereum right now.  I do have several small positions in a handful of altcoins that add up to about 10%.  I recently (past days/weeks) exited many positions as support levels and stop losses were taken out.

For now I’m on the hunt for set ups and bottom formations and will step back in when it looks like a good low has been established.  No doubt there will be some trade-able rallies between now and then but as for longer term holds, I want the trend in my favor first.

Conclusion

I think we’ll bounce from here but will ultimately see more downside testing before this correction is over. The bottom in ETH may be in but I would not be surprised to see BTC go lower.  It’s best to be patient and wait it out instead of guessing bottoms along the way.  There will be a bottom! When it shows up, we’ll know and we’ll have many opportunities.  The trend will be in our favor and cryptos will be making daily/weekly gains again.  They are not going anywhere and blockchain is here to stay!

Recent Videos on the Topic

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Learn Technical Analysis for Cryptocurrencies

If you’re an investing or trading cryptocurrncies (or looking to get started), you must have a good understanding of Technical Analysis.  Whether you’re brand new to technical analysis or already have a basic understanding and want to increase you skills, this course can help you.

How it can benefit you?

By learning how to recognize the 9 key patterns I talk about, understanding how to spot trends, support & resistance and how to use some of the essential indicators, you can begin to quickly interpret the market price action.

Understanding how to read the charts will help you optimize your buying and selling as well as show you when you should just hold tight.  You may have heard me talk about breakouts, and when that happens I have way more confidence in my position and very often go heavy to maximize the gains.

Click Here to purchase the course and to get more info.

 

Below is a video overview of the newly released course on getting started with Technical Analysis.

 

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