Price Prediction: Ethereum Relaxes on Its Journey to Constantinople

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople


Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 1
  • It’s Bitcoin’s turn while the Ethereum takes a breather.
  • Three weeks of rising have exhausted Ether’s move in the short term.
  • XRP remains at $0.37 without the strength to follow the market.

We begin the weekly review of the three main cryptocurrencies of the Crypto board. After several weeks in which Ethereum has been leading the market, Bitcoin takes the baton.

On several occasions, I have expressed the need for Ethereum to play its role as a necessary collaborator to see a bullish market. For now, the leader of the Altcoins has begun to play his part.

The ETH/BTC pair reached the level of 0.041 yesterday (price congestion resistance) drawing on the daily chart a figure that is being effective. The direct consequence has been a transfer of capital from Ethereum to Bitcoin that has allowed the King to rise more than 5% yesterday.

BTC/USD Daily Chart

BTC/USD trades at the $4,013 price level after setting a high of $4,005 yesterday. The retracement moves Bitcoin away from the $4,389 level (price congestion resistance), which is the first level to overcome before considering any bullish scenario.

Above this first resistance is the bearish trend line that has governed the market throughout 2018. Exceeding this second price level would place the BTC/USD on the positive side of the trend line, but would not change the overall bearish profile. BTC/USD needs to exceed $5,874 (price congestion resistance and long-term bearish trendline) to consider a general change in trend.

Below the current price, BTC/USD is left with very little help in case strong sales appear. It has only two significant support levels that separate it from entering a free-fall mode. The first support level is at $3,590 (price congestion support). The second support level is at $3,273 (price congestion support and 2018 lows).

Below this level, BTC/USD would go into free fall again and set the course for levels around $2,000.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 2

The MACD in the daily range appears to be slightly bullish. The line spacing has decreased just as we reach the indicator’s zero lines, a typical pattern that should prepare us for increased volatility and a possible bearish rejection scenario.

The DMI in the daily range shows us that the bulls are taking control of the situation. They are above the ADX line and also above the 20 levels of this indicator. The setup is statistically bullish, but I am cautious due to the previous strong bearish trend.

ETH/USD Daily Chart

ETH/USD is currently trading at $153.90, after setting a relative high at$163.74 (price congestion resistance) yesterday. The time to consolidate the 80 % price increase from the 2018 lows has come. In the medium and long-term, ETH/USD continues to be strongly bullish.

Above the current price, the first target is $170 (price congestion resistance). The second resistance level is $180 (price congestion resistance). The third resistance level is at $190 (price congestion resistance). In the medium term, the critical level to exceed is $260 (price congestion resistance and SMA200).

ETH/USD does not enjoy better support levels than BTC/USD despite that %80 gain from lows.

Below the current price, the first support level is at $142 (price congestion support). The second support level is at $125 (price congestion support). The third level of support is at $95 (price congestion support).

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 3

The MACD in the daily range shows a clear exhaustion profile after three consecutive weeks of increases. The bullish slope decreases and is likely to be lost this week. The distance between the lines continues to be substantial, so we should not rule out a significant upward movement.

The DMI in the daily range shows the bulls are at high levels and maintain a safe distance from the bears, that continue to have little confidence in their strength and continue to decrease in intensity.

XRP/USD Daily Chart

The XRP/USD is currently trading at the $0.3684 price level. Of the three main players on the Crypto board, Ripple has shown the most weakness in recent weeks. XRP/USD has moved sideways at around $0.37 for over two weeks.

Above the current price, the first resistance level is at $0.3758 (EMA 50), being the only obstacle to the second resistance level at the price level of $0.4129(congestion resistance and SMA100).  The third resistance level is at $0.4224(SMA200), slightly below the long-term bearish trend line passing through the $0.44 price level. Above this price level, we could move from the current bearish scenario to a bullish side one in the medium term.

Below the current price, the first support level is $0.345 (price congestion support). If the XRP/USD were to lose this support level, the drop to the second support level at $0.32 (price congestion support) could be quick. The third support level is $0.297 (price congestion support).

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 4

The MACD on the daily chart shows very horizontal lines that are very close together. It is a profile that indicates the lack of strength that the XRP/USD currently has. The positive data comes from the fact that the lines are still above the zero lines.

The DMI in the daily range shows that the bulls command an advantage over the bears, although neither side of the market has changed its trend level in the last week. XRP/USD shows considerable levels of indecision.

Featured image courtesy of Shutterstock. 

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 5

Altcoins

Published

16 hours ago

on

January 7, 2019

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 6

“Clear eyes, full hearts, can’t lose.”  One of my favorite quotes from “Friday Night Lights” is a great way to describe the new year.  2018 was rough, brutal, and painful.  But with a new year comes new opportunities.  Crypto markets have started off strong during the first week of January.  Bitcoin gained nearly 5% on Sunday and now trades at approximately $4,060.  The broader crypto market has also followed suit as several notable coins have generated substantial gains.  Those coins include:

  • Ripple (XRP) with a 3% gain
  • Litecoin (LTC) with a 10% gain
  • Stellar (XLM) with a 5% gain
  • Ethereum (ETH) with a 2% gain

While the gains are a great way to bring in the new year, the market is still very cautious regarding the next step.  For cryptocurrencies to truly break out of the current bear market, they likely need to reach a market valuation of $230 billion.  Bitcoin would also need to trade at approximately $6,000.  So, based on today’s levels, there is still substantial work left to do.

Ethereum Hard Fork

Binance has just announcedplansto support the Ethereum Constantinople Hard Fork which is currently scheduled for January 16th.  Traders need to be reminded that January 16 is the expectation, but nothing is set in stone.  When asked about the firmness of the data,Peter Szilagyi, an Ethereum core developer had this to say: “We can just mid-January, it doesn’t make a difference if we decide on a date or not.  We can always postpone.”

Ethereum has already had to delay the Constantinople upgrade once before after developers detected some errors on the testnet platform.  Given the complexity of the upgrade, it wouldn’t be a surprise if an additional delay was necessary.

Is the Hard Fork Necessary?

In a word, yes.  There are a few issues at play here.  The first is the “difficulty bomb.”  The difficulty bomb is the term used to indicate the increasing level of mining difficulty that results in an increased amount of time required to mine a new block on the Ethereum blockchain.  Block times are expected to begin increasing this month and could hit 30-second block times by May.

Some traders may be wondering why this “bomb” was put in place.  It’s a bit complex but essentially was designed as a deterrent for miners, who may opt to continue with Proof of Work (miners compete directly against each other), even as the blockchain transitions to Proof of Stake (where rewards are based on staking).  With the bomb in place, Ethereum will need to undergo regular network upgrades.

The Constantinople Upgrade

Constantinople is a system-wide upgrade that wasenactedat the end of August, 2018.  The upgrade includes five different Ethereum improvement proposals (EIPs).  After the proposals are released on Ethereum, the blockchain will be permanently altered with new backwards-incompatible upgrades.

This essentially means that the network of computers that run Ethereum software must either update or continue running independently.

There is no doubt that hard forks have caused a great deal of squabbles in the past.  The most notable of which occurred with the Bitcoin Cash (BCH) hard fork.  Roger Ver, known as “Bitcoin Jesus” and the most prominent supporter of Bitcoin ABC, took a position in favor of the new software upgrade.  On the opposite side, Craig Wright, who claims to be Satoshi Nakamoto, was in favor of expanding the maximum block size from 32MB to 128MB.  ABC appears to have won that war.

Ethereum Rally Can Continue

Ethereum has had a monster rally over the past 30 days, gaining more than 80%.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 7

So, while Ethereum miners are likely quite anxious as we approach the hard fork, the broader market appears to be quite fond of it.  I expect the rally to continue as we approach January 16th.

One risk is that if developers announce another delay.  A short delay probably wouldn’t have a major impact on price, but a delay of any meaningful length could lead to a selloff.  Traders looking to initiate a short-term trade may want to make use of stop limit trades.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Analysis

Published

2 days ago

on

January 5, 2019

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 8

The counter-trend rally in the cryptocurrency segment continues, and after a period of consolidation, Litecoin has been showing strength today in early trading. Ethereum, the other relatively strong top coin is also higher today, while the likes of Tron and Cardano are also up, but for now, the lagging majors, such as Ripple and Bitcoin still haven’t joined the move, weighing on the segment’s performance.

As we reiterated several times this week, odds continue to favor the continuation of the corrective rally, with correlations and volatility still being relatively low. That said,from a long-term perspective, the majors are still clearly in bear markets, and as the oversold momentum readings are quickly being cleared, a short-term top will likely form in the coming couple of weeks.

Traders and investors could still remain in short-term positions, with strict risk management rules and a focus on the relatively stronger coins, but we would need to see strength in the laggards in order to keep up the bullish momentum in the market.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 9

LTC/USD, 4-Hour Chart Analysis

Litecoin finally exited the volatility compression pattern of the recent days, and the prior leader of the counter-trend move is back near its recent swing high, eyeing a break-out and a rally towards the $38 resistance level.

LTC is still on a clear short-term buy signal in our trend model, despite the bearish long-term setup, with further resistance ahead near $40 and $44, and with support found between $30 and $30.50 and near $26. Above $38, traders should reduce their positions, with a strong declining broader trendline also providing resistance in the $40-$41 area.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 10

ETH/USD, 4-Hour Chart Analysis

Ethereum rallied back above $150 and touched the $160 resistance today, but for now, a clear move above the key long-term level didn’t happen. The coin continues to show relative strength but the lack of momentum is a bit worrying for bulls here. A move to $180 is still likely in the coming weeks, as the short-term uptrend is intact and our trend model is on a clear buy signal.

That said, given the extent of the counter-trend move, the risks are increasing that the bearish long-term trend will resume, so traders should reduce their exposure and use strict risk management strategies, even as the tally will likely continue. Below the initial short-term level near $145, support zones are still found near $130, $120, and between $95 and $100, while further resistance is ahead near $200.

Bitcoin and Ripple Struggling to Find Momentum

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 11

BTC/USD, 4-Hour Chart Analysis

Bitcoin got to a standstill in the past few days, with low trading volumes and volatility dominating the market of the most valuable coin. The $4000-$4050 resistance zone and the $3600 support level continues to be in focus, and the short-term momentum indicators are neutral thanks to the lengthy consolidation phase.

Our trend model still on a short-term buy signal, despite BTC’s relative weakness and the bearish long-term setup, but traders should continue to focus on the leaders, until we see bullish momentum in the laggards. Further resistance is ahead near $4450 and between $5000 and $5050, while support below $3600 is found near $3250 and $3000.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 12

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to trade in the close vicinity of the $0.3550 support level, being the weakest among the top coins, severely lagging the leaders of the move. For now, the coin remains on a neutral short-term trend signal, but given the negative long-term outlook and the maturing counter-trend move, traders shouldn’t enter new positions here barring a strong break-out on the upside.

Primary resistance is ahead near $0.3750 with the key long-term resistance still ahead in the $0.42-$0.46 zone, while support is found near $0.32 and $0.30.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Analysis

Published

3 days ago

on

January 5, 2019

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 13

The cryptocurrency segment continues to be relatively quiet, with the counter-trend rally still being intact in the market of the top coins. While Ethereum attempted a move to new correction highs in the past 24 hours, the relatively strong coin failed to break out substantially and retreated in the second half of the day.

Despite the failed move, ETH and the other, relatively weaker majors are all stable, and the key support levels are in no danger. Volatility and correlations remain low, and odds still favor the continuation of the counter-trend move, even asthe long-term picture remains overwhelmingly bearishin the segment, and a test of the bear market lows is still likely in the coming months.

On a negative note, we haven’t seen signs of bullish rotation in the market, meaning that the relatively weaker top coins, such as Ripple and Bitcoin continue to lag the leaders, and even the leaders are far from breaking the longer-term trends. With that in mind, traders should still only consider short-term positions with strict risk management rules.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 14

BTC/USD, 4-Hour Chart Analysis

The technical setup in Bitcoin’s market is unchanged, with the coin still being stuck below the $4000-$4050 resistance zone, while being clearly above the $3600 support. While the short-term buy signal is still in place in our trend model, barring a move above the short-term range, traders should focus on the leaders of the move, as BTC is still weak from a short-term perspective. Further resistance is ahead between $5000 and $5050, while support below $3600 is found near $3250 and $3000.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 15

ETH/USD, 4-Hour Chart Analysis

Ethereum established a short-term swing low near $145 following another failed rally attempt, and although the coin faces strong resistance near $160, the coin’s short-term relative strength is still encouraging for bulls here. The short-term uptrend is clearly intact, and our trend model remains on a short-term buy signal, even as the steep long-term downtrend is still dominant.

A move above $160 could open up the way for a test of the $180 level, with another level found above that near $200, but given the extent of the counter-trend rally, above $180, even short-term positions would become risky. Below the initial short-term level, support zones are still found near $130, $120, and between $95 and $100.

Declining Volatility Across the Board

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 16

XRP/USDT, 4-Hour Chart Analysis

Ripple dipped below the $0.3550 support level, triggering a downgrade to neutral in our trend model from a short-term perspective, and the coin remains among the weakest majors. While a broad rally would likely lift the coin too, traders should remain cautious with opening new positions here, with the long-term setup being clearly bearish. Key long-term resistance is still ahead in the $0.42-$0.46 zone, with further levels at $0.3750 and $0.40, while support is now found near $0.32 and $0.30.

Price Prediction: Ethereum Relaxes on Its Journey to Constantinople 17

LTC/USD, 4-Hour Chart Analysis

While Litecoin continues to be weaker than earlier on during the counter-trend rally, it remained stable in the past few days, and it’s trading well above the $30-$30.50 support zone, with progressively declining volatility in the coin’s market.

We still expect the rally to continue in LTC, although given the bearish long-term trend, a move below primary support would trigger a sell signal in our trend model. Further support is found near $26, while key resistance zones are ahead near the $34.50 and $38 price levels.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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