Price Analysis, Jan. 19: Bitcoin, Ethereum, Bitcoin Cash, Ripple, IOTA, Litecoin, NEM, Cardano

Price Analysis, Jan. 19: Bitcoin, Ethereum, Bitcoin Cash, Ripple, IOTA, Litecoin, NEM, Cardano

The views and opinions expressed here are solely those of authors/contributors and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The market data is provided by the HitBTC exchange.

After a sharp fall, the aggressive bulls jump in and buy at lower levels. This strategy has resulted in huge gains for the cryptocurrency traders in 2017. However, unlike previous occasions, we have not seen a sharp rise this time. This shows that the traders are not confident of a huge rally from the current prices.

In the next few days, we expect a range bound action in most of the top cryptocurrencies.

BTC/USD

We had expected a pullback from the $10,704.99 levels. But Bitcoin overshot on the downside and fell to $9,300 levels.

BTC

Currently, the bulls are attempting a reversal, which is likely to carry the cryptocurrency to the neckline of the head and shoulders pattern at $13,202 levels.

We expect another round of selling from those levels, which is likely to sink the BTC/USD pair back to the support zone of $10,704.99 to $9,300. If this support zone breaks, a fall below $8,000 is likely.

On the other hand, if the bulls succeed in holding the support zone, it will lead to a start of a new uptrend. Nimble-footed traders can play the rise, but others should wait for more clarity to develop.

ETH/USD

We expected the support zone between the trendline and $940 to hold. On Jan. 17, Ethereum broke below the trendline and fell to a low of $770.   

ETH

The bulls bought the dip aggressively, which has resulted in a pullback that carried the cryptocurrency towards the 50 percent Fibonacci retracement levels of the recent fall from $1424 to $770.

For the past three days, the ETH/USD pair has been struggling to cross above $1097. If the price breaks out of the $1100 levels, we expect a move to $1174.36 and $1284.28 levels. As the stop loss is $930, which doesn’t offer a good risk to reward ratio, we are not suggesting any trade on it.  

BCH/USD

We expected the $1733 levels to hold. Still, the bears easily broke through it and Bitcoin Cash fell to a low of $1364.96 on Jan. 18.

bch

The current increase is likely to face resistance at the $2072 levels, which was the support of the range previously. We shall get a confirmation of a bottom during the next downturn. If $1364.96 breaks, a fall to $1194 is likely.

Our bearish view will be invalidated if the BCH/USD pair sustains above $2072 for a day.

XRP/USD

We had forecast a fall to 61.8 percent Fibonacci retracement levels of the latest rally, however, Ripple fell close to the 78.6 percent retracement levels, which coincided with the lower end of the descending channel.

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XPR

The cryptocurrency has broken out of the descending channel, which suggests that the downtrend is over. However, the present increase is facing resistance at the 20-day EMA, above which a move to $2.20 is likely. At that price, the XRP/USD pair will face resistance from the trendline that had previously acted as a strong support.

However, if the cryptocurrency fails to break above the 20-day EMA, the bears will attempt to resume the downtrend. Support lies at $0.87.

We expect a few days of range bound trading.     

IOTA/USD

IOTA broke down of the bearish descending triangle pattern on January 16, which gives it a pattern target of $1.10.

IOTA

However, the cryptocurrency took support at $1.93 levels on Jan. 17.

Currently, the IOTA/USD pair is retesting the breakout levels of $3.032. If the bulls breakout of the overhead resistance and the downtrend line, our bearish view will be invalidated.

However, if the bears defend the $3.032 levels, we are likely to see another bout of selling, which will retest the lows.  

We don’t find any clear pattern; hence, we are not recommending any trade.   

LTC/USD

We had forecast a likely fall to $100 if Litecoin broke below $175.19. It rose from a low of $140.00 on Jan. 17.

LTC

For two days in a row, Jan. 16 and Jan. 17, the bears broke down below $175.19 but were unsuccessful in holding prices down.

If the bulls breakout of $205, a move to $225 is likely, where both the moving averages converge. This level is likely to act as a resistance.  

We don’t find any reasonable trades on LTC/USD pair.

XEM/USD

NEM fell close to the 78.6 percent retracement levels on Jan. 16 and Jan. 17. Thereafter, the bulls have commenced a pullback, which is likely to face a strong resistance at the downward trendline.

XEM

If the price moves above the downtrend line, an increase to $1.45 can’t be ruled out.

The next fall towards the recent lows of $0.55134 will confirm whether the bottom is in place or is there further to go.

Until then, we shall remain on the sidelines on the XEM/USD pair.

ADA/BTC

Cardano broke below the trendline support on Jan. 16 and Jan. 17, however, the bulls defended the support and pushed prices higher quickly.

ADA

The ADA/BTC pair broke out of the downtrend line yesterday, Jan. 18, however, it could not pick up momentum. It is struggling to rally above 0.00006. Once bulls breakout of 0.00006, a move to 0.00007 and thereafter to the 0.00008 levels is likely.

The cryptocurrency pair will become negative below 0.00004730.

The charts for the analysis are provided by TradingView

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Tether Printing Press In High Gear, Issuing $400 Million in Four Days

Tether Printing Press In High Gear, Issuing $400 Million in Four Days

Tether Printing Press In High Gear, Issuing $400 Million in Four Days

Bitcoin has had a rocky week to say the least. At its lowest point, the cryptocurrency dipped to $9,200 before a rising green candle sent it scurrying back into the safety of five figures. That candle was sparked by the release of $100m worth of tethers – surrogate US dollars – and was followed by another $100m issued for the next three days in a row. Tethers are propping up the bitcoin market right now, but what happens when the music stops? Should regulators wade in or Tether shut up shop, the loss of fresh capital could be cataclysmic.

Also read: While Tether Critics Grow More Vocal, Belief in the 1:1 Tightrope Remains

Tether – Savior or Sinner?

The bitcoin community have decidedly mixed feelings on Tether. On the one hand, this ersatz fiat currency is instrumental in shoring up prices. But if that supply line were to be cut off, the crypto markets would be starved of new money. While Bitfinex, which controls Tether, is in charge of issuing these dollar-pegged tokens, other exchanges are also reliant on them including Kraken and Bittrex. What happens to Tether affects everyone.

Bitfinex Tether Printing Machine In High Gear, Issuing $400 Million in Four DaysThe amount of new bitcoins created each day is worth approximately $18 million. Miners need to sell most of these coins to cover their utility costs. This means that $18 million of new money needs to enter the markets daily just to maintain current prices. Given that $400 million of tethers has been issued over the past four days, and yet the price of BTC has remained sluggish, this is alarming. If it wasn’t for tether’s torrent of newly created cash, this week’s dip would have cut deeper still.

Don’t Stop Believing

In the short-term, the issuance of tethers serves as a form of quantitative easing that keeps the markets ticking over, even amidst negative news and regulatory uncertainty. As one commenter pointed out, “Tethers aren’t really ‘backed’ by USD fiat, but rather by confidence in Bitfinex itself. Similarly the USD isn’t ‘backed’ by hard assets, but rather confidence in the US economy. What happens to USD if the Fed shuts off the insane volume of their printing press?”

Bitfinex Tether Printing Machine In High Gear, Issuing $400 Million in Four Days

So long as we collectively believe that tethers are real, they are real, or at least as real as any other global currency that’s magiced out of thin air, which has generally been the case ever since the gold standard was dropped. But what are markets if not manifestations of human psychology; global sentiment etched into every line, chart, and candle? No one, at this stage, realistically believes that Tether is receiving $100 million a day in customer deposits via its diminutive Polish bank and then converting these into USDT. That just ain’t happening.

Beware the Changeling

Bitfinex Unties the Tethers, Issuing $400 Million in Four Days
Der Wechselbalg (The Changeling) by Henry Fuseli, 1781

In folklore, a changeling was a child that fairies were reputed to leave in cradles after snatching the human baby. It looked like the cradle’s original inhabitant on first glance, only to prove to be anything but. If the fairies performed the old switcheroo, unexplained diseases, disorders, and failed crops were sure to follow. Tether is valued like a real dollar and works like a real dollar – at least until the time comes to cash out. In the past month alone, over $1 billion of tethers have been issued. If Tether doesn’t hold a corresponding amount in its bank, the whole house of cards could come tumbling down, destroyed by a changeling swaddled in the mantle of the US dollar.

Do you think the volume of tethers entering the market is cause for concern? Let us know in the comments section below.


Images courtesy of Shutterstock and Wikipedia.


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