Litecoin Price Technical Analysis For 30/12/2015 – Ascending Channel Formation

Key Highlights

  • Litecoin price continued to struggle to clear the 100 simple moving average on the 2-hours chart (data feed from HitBTC).
  • However, there are a few positive signs noted on the 30-min chart (data feed from Bitfinex), as there is an ascending channel formed.
  • The price may trade a few points higher, as it is above the 100 MA (30-min chart).

Litecoin price struggle continues, but there are bullish signs emerging on the lower timeframe, which can be considered as an indicator of a move higher.

Ascending Channel as Catalyst

Litecoin Price Technical Analysis

We highlighted a major hurdle for Litecoin price yesterday in the form of the 100 simple moving average on the 2-hours chart (data feed from HitBTC). It continued to stall gains and prevent the upside move. However, when we look at the lower timeframe like the 30-min chart via the data feed from Bitfinex, then there are a few bullish signs emerging.

First, there is an ascending channel formed on the 30-min chart, which is acting as a catalyst for the upside move. The price recently closed above the 100 MA successfully, which is a positive sign. So, there is a chance of it trading higher and test the channel resistance trend line. A break above the channel resistance area may call for more gains and ignite an upside move towards $3.65.

Litecoin Price Technical Analysis

In order for any solid gains, we need to keep referring to the 100 MA on the 2-hours chart, as it may play a key role moving ahead. On the downside, the highlighted channel support area may prevent losses in the short term.

Looking at the indicators:

30-min MACD – The MACD is about to change the slope to bullish, pointing towards an up move.

30-min RSI – The RSI is just above the 50 level, and must hold if buyers have to take the price higher.

Intraday Support Level – $3.45

Intraday Resistance Level – $3.55

 

Charts from Bitfinex and HitBTC; hosted by Trading View

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Ethereum Price Technical Analysis for 30/12/2015 – Massive Short Fail

My short call on Ethereum completely bombed! Ethereum has soared 5.6 percent to 0.00208BTC, mauling the short sellers in a surprise jump. I was anticipating a decline to 0.0019BTC but Ethereum instead rose to hit a high of 0.0021BTC.

With this, Ethereum has approached the strong resistance level of 0.0021BTC with confidence. Beyond this hurdle, the pair will appreciate roughly 10 percent.

Ethereum price chart

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The ETH-XBT pair has formed an inverse head & shoulders pattern; a technical bullish pattern successful completion of which brings huge gains for the underlying. Today, we will discuss the best-case and worst-case scenarios for Ethereum using the technical indications from the 240-minute ETH-XBT price chart from KRAKEN.

Chart Structure – The chart image presented above clearly tells that bulls are challenging the resistance at 0.0021BTC with strong optimism. The level is the neckline resistance of the Inverse H&S pattern. The primary target objective can be calculated by adding the depth of the technical pattern above the neckline resistance which puts the target at 0.0021 + (0.0021-0.0019) = 0.0023BTC.

If bulls fail to cross this blockade, then profit booking will once again drag the price down to sub-0.0020BTC levels.

The last bullish candle was supported by a surge in volume as well.

Momentum – The Momentum indicator has finally reached the positive territory with a value of 0.0001.

Money Flow Index – The MFI is adding to the gains achieved in the previous session. The current value of the MFI is 67.2578.

Relative Strength Index – The latest RSI value is 61.7752, indicating a surge in bullish strength.

Conclusion

It seems like the force has awakened (yes, I know you got me there!) for the bulls. But cryptocurrency pairs are full of surprises, and there could be negative shocks as well.

One thing that doesn’t augur well for the bulls is that the pair is already trading at the upper end of the BB, and therefore, profit booking may come in.

Remain cautiously optimistic on Ethereum.

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Mainstream Media Admits Bitcoin Stronger Than U.S. Dollar in 2015

The illusion of the U.S. Dollar’s intrepid strength is a false indicator that the American media has been trumpeting since late 2013. It is an indication of its value relative to other fiat currencies like the Euro and Japanese Yen. Kind of like a battle for which debt-based bearer bond is the best at losing value the slowest. Well, CNBC has published an admission piece on how Bitcoin’s dollar price shames the world’s reserve currency in a battle of relative strength for 2015.

Eric Rosenbaum’s article has an odd post-mortum twinge to it, starting off with “The U.S. dollar has had a nice run.” Plenty were saying that about Bitcoin’s value at the end of 2013, no? Even so, U.S. Dollar index value has risen almost 10%, which sounds impressive enough. Yet, Bitcoin over the same period is up over 40%, which is somewhat misleading, at that. Bitcoin value hadn’t finished recovering from the Mt. God bubble/collapse, and dropped to under $180 in midJanuary, from over $300 USD at the start of the year. Bitcoin is up well over 100% since its darkest days, which is not mentioned in the piece.

Remember the midstream refrain from this time last year? BTC and the Russian Ruble were simply the world’s worst in relative value for 2014, with both losing over 50%. All of Bitcoin’s value growth has taken place in Q4, and many attribute it to the infamous Russian MMM scheme perpetuated upon the Chinese market. Be that as it may, prices haven’t receded, indicating that might have been a catalyst, but not the underlying cause of the increase. China’s capital controls have shown more of a direct impact upon BTC price, and more may be in store for early 2016 as the economy continues to struggle.

This article in CNBC may’ve been written by a Bitcoin owner, but the facts cannot be denied. Money worldwide continues to flow consistently into Bitcoin, Gold and other non-dollar denominated asset classes. Bitcoin transactions are up, as are venture capital investment, setting another annual record in 2015. With the Bitcoin halving coming next summer, many see another year of strength for “The Honey Badger of Money.” Reasons to be optimistic are legion.

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The latest of which is Bitcoin is showing impressive growth outside of the leading U.S. and China markets, according to Coinbase. Wallet creation in major markets like Brazil, India, and the Philipines indicate Bitcoin has more market reach than originally thought. With the advent of mainstream blockchain technology usage, 2015 seems to represent a foundational springboard into a potentially huge year for not just Bitcoin but the digital currency of all kinds.

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Leading Japanese Bank Yearns To Enter Fintech Space

The Wall Street Journal reports that Japan’s second-largest bank Sumitomo Mitsui Financial Group (SMFG) is eager to enter the fintech space. Japan has been playing catch-up with other nations who are quickly embracing the financial technology revolution.

It was only recently that the Japanese government and regulators allowed the bitcoin exchanges to be registered. Until now, the government had been lackadaisical in foraying into the fintech space, which includes bitcoin and its technology blockchain.

Speaking to WSJ, Koichi Miyata, President at the bank said that the group is keen to make investments in financial technology ventures once the nation’s rules change to permit it.

SMFG even started an IT Innovation Department specializing in fintech in October. Mr. Miyata said to WSJ,

If we have a fintech platform, that would be a big foundation for our retail business that would enable retail customers do virtual payments. They may not even need a branch.

Faced with declining profits, the Group is looking at the hottest sector of the world to reassert its dominance. Innovation in the financial space is expected to reduce costs for businesses, speed up the operations, and improve the profitability and the competitiveness of the firms.

However, Japan’s stringent regulations keep the banks from benefiting from the fintech revolution. Banks are allowed to hold a maximum of only 5% stake in companies who aren’t involved in the banking space.

Many global banks are coming together to create their version of the blockchain via a consortium called R3 CEV. And this consortium is only getting bigger every week. The blockchain technology is being seen as a tool that will completely alter the way payments are made in the future. Many have repeatedly compared it with the Internet revolution. Japanese banks lag behind in the fintech space, partly due to the stringent regulations imposed by the authorities.

While nations such as UK and China are vying for the top spot in best fintech hubs, Japan is yet to make that killer move that will put it on the investors’ radar.

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Bitcoin Price Breaks; Recovery Tonight?

In this morning’s bitcoin price watch article, we focused on a pretty narrow range in an attempt to combine our intraday breakout strategy with some scalp targets to draw quick profit from the market on any volatility. Action has now matured throughout the session, and we are heading into what looks like its going to be a pretty interesting evening. The Asian session has, over the last few weeks, traditionally been the session that has given us the most gains. This isn’t set in stone, but chances are we will see a continuation of this trend throughout tonight’s trading. If we do, we want to be ready, so let’s try and alter this morning’s parameters in response to the day’s action, and set up some entry levels ahead of Asia. As always, take a quick look at the chart to get an idea of tonight’s range.

Screen Shot 2015-12-30 at 18.03.39

One thing to keep in mind is that – while perhaps not as large as in the western world – the approaching New Year will likely impact volume out of Asia. Japanese markets close for the day, and many schools and businesses in China shut down, meaning market participation could be sparse. This doesn’t mean we wont get any action, just that it might be choppy and volatile, so we need to keep our risk parameters tight.

As the chart shows, and in response to today’s action, we are looking at 420.76 to the downside as in term support, and 428.26 to the upside as in term resistance. These levels define tonight’s range.

If we get a break (and a close) above in term resistance, we will take a long position towards an immediate upside target of 435.01, with a stop around 426 defining our risk.

On the other side of our strategy, a close below 420.76 will put us short towards 415, and a stop at 422 will keep things positive on the risk/reward front.

Charts courtesy of Trading View

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Litecoin Price Technical Analysis For 31/12/2015 – Risk of Further Declines

Key Highlights

  • Litecoin price failed to gain momentum and traded lower as sellers managed to gain control.
  • A contracting triangle is at risk of a break lower if we look at the hourly chart with data feed from HitBTC.
  • The price also closed below the 100 simple moving average on the 30-min chart (data feed from Bitfinex), which is a bearish sign.

Litecoin price failed to trade higher despite a few positive signs, and it looks like it may trade further lower in the near term.

New Lows in Making?

Litecoin Price Technical Analysis

It looks like selling pressure prevailed and buyers failed to take the price higher. There is a contracting triangle pattern formed on the hourly chart (data feed from HitBTC), which is about to be broken. If there is a close below the highlighted triangle support trend line, then there are chances of it moving lower further. A new weekly low may be created, and the price might trade near $3.40.

The price is well below the 100 simple moving average, which is another bearish sign that may ignite a downside reaction. Yesterday, the price was above the 100 MA (30-min chart via the data feed from Bitfinex). However, buyers failed to capitalize on the same, and as a result, the price moved below the 100 MA.

Litecoin Price Technical Analysis

Overall, the price remains at a clear risk of more losses in the near term. If there is an hourly close below the triangle support area, then the price may slide further. The next support area on the downside is around the $3.40 level.

Looking at the indicators:

Hourly MACD – The MACD is in the bearish zone, pointing towards a downside move.

Hourly RSI – The RSI is below the 50 level, which is another bearish sign that could encourage sellers.

Intraday Support Level – $3.45

Intraday Resistance Level – $3.55

 

Charts from Bitfinex and HitBTC; hosted by Trading View

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Will Bank of America Defend their Bitcoin-related Patents?

10 Bitcoin-related patents filed by American multinational banking and financial services corporation Bank of America in 2014 have recently been published by the US Patents Office.

The patents include rights to a broad range of blockchain-based systems including cryptocurrency transaction payment system and alternative decentralized settlement systems which allow clients and other financial institutions to make cryptocurrency transactions and settlement of assets with risk detection, offline support and fraud detection.

“A system comprises a memory operable to store a customer account associated with a customer and a processor communicatively coupled to the memory. The processor is able encode cryptocurrency information associated with the customer account onto a payment instrument. The processor is also able to receive a request for a cryptocurrency transaction from the customer using the payment instrument.” read the patent on Cryptocurrency Transaction Payment System, Patent #20150363770.

However, most of the patents published by the US Patents Office which include offline and offline cryptocurrency vault storage, risk detection and transaction validation systems and cryptocurrency suspicious user alert system have already been implemented by many bitcoin and blockchain startups in the industry.

Over the past few weeks, bitcoin and security experts have criticized the efforts of America’s second largest bank, stating that Bank of America is attempting to take credit for reinventing and altering systems being developed by others.

With an increasing number of bitcoin and tech enthusiasts in the community and bitcoin industry claiming that the patents are just an outright theft of ideas and concepts which have already been worked on for a long time, Bank of America will have difficulty in defending the patents that have been “published.”

For example, there are at least 5 prominent bitcoin startups offering real-time conversion system, cryptocurrency suspicious user alert system and offline storage, all three of which are claimed by Bank of America as “unique inventions” and discoveries.

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Korean National Television Reports Growing Mainstream Bitcoin Awareness

Korean national television and popular news network recently featured Bitcoin entrepreneurs Simon Dixon and Roger Ver to demonstrate how bitcoin is used often to settle peer to peer transactions in Korea.

Since 2014, an increasing number of venture-backed bitcoin startups including Coinplug and Korbit have emerged, enabling Korean bitcoin users and traders to purchase and sell bitcoin with ease.

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Korean bitcoin startups, specifically Coinplug have sponsored bitcoin meetups, conferences and events to increase mainstream bitcoin awareness in Korea. Due to these efforts, the number Korean bitcoin users have grown significantly over the past few years, as cafes, restaurants and apparel stores in Seoul and Pusan have begun to accept bitcoin.

Bitcoin entrepreneurs and investors including Simon Dixon and Roger Ver explained in an interview that they see a huge potential for bitcoin in the Korean market, based on the growing bitcoin industry and community in the country.

“It is a technology which changes everything in Finance,” explained BankToTheFuture CEO and co-founder Simon Dixon during an interview. “It acts as a currency because people can transfer value virtually free anywhere around the world. It also acts as a commodity because it’s a fixed supply and it tends to be very volatile as a result.”

The Korean news network further emphasized that established financial institutions, banking groups and central banks worldwide are exploring the potential of the Bitcoin blockchain technology in the traditional finance sector and that the decreasing supply of bitcoins is causing the price of the digital currency to spike.

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“Right now there is today around 15 million bitcoins in the entire world and just a few people with not very much money can really have a big effect on the price but that is going to change and that volatility will slow down over time as more and more people around the world are using bitcoin,” stated Bitcoin entrepreneur and Angel Investor Roger Ver.

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Indian Central Bank: Blockchain will Transform the Finance Sector

The Reserve Bank of India, one of the few central banks worldwide that has been skeptical towards the Bitcoin blockchain technology has recently shown interest in the distributed ledger technology and peer to peer financial systems, due to their strengths in settling transactions and clearing assets securely, with significantly lower costs.

“With its potential to fight counterfeiting, the ‘blockchain’ is likely to bring about a major transformation in the functioning of financial markets, collateral identification (land records for instance) and payments system,” stated the RBI.

The RBI emphasized the benefits of using the blockchain technology and its decentralized and transparent nature. Since no central authority or third party application are involved in the network, the bank believes that the implementation of the blockchain technology in the conventional finance sector could truly disrupt the industry and existing financial platforms.

“As against this, the ‘blockchain’ technology is based on a shared, secured and public ledger system, which is not controlled by any single (‘central’) user and is maintained collectively by all the participants in the system based on a set of generally agreed and strictly applied rules,” the bank added.

However, two years ago, the bank publicly warned its users against virtual currencies including bitcoin, despite the potential and benefits of the independent digital currency and it underlying technologies. Like many other established financial institutions and banking groups at the time, the Reserve Bank of India deemed bitcoin as an illegal currency, advising its users to stop exposing themselves to cryptocurrencies which hold significant risks.

“The creation, trading or usage of VCs including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities,” the bank said on December 24, 2013.

The organization also insisted that potential hacking attacks and data breaches could result in the loss of bitcoins and user funds held by bitcoin exchanges and wallet platforms, advising its customers and clients about the potential financial, operational, legal and security related risks in using bitcoin.

“VCs being in digital form are stored in digital/electronic media that are called electronic wallets. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc.,” read the statement.

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Bitcoin Recognized as Viable Retirement Asset by Investors

The volatility of the bitcoin price has resulted around 50% loss for high profile and established investors and traders who purchased the shares of publicly traded bitcoin exchange-traded fund (ETF) like Grayscale Investment’s Bitcoin Investment Trust.

However, due to the underwhelming performance of stock markets and equities and the rising trend of bitcoin price, an increasing number of investors are beginning to recognize bitcoin as a viable retirement portfolio asset.

Over the last few days, the value of public equities and precious metals including gold have plummeted, with market favorites like Apple falling by 14.5%, the price of gold plunging by 12.5% and the Dow Jones Industrial Average dropping by around 3% since May 2015.

Despite such poor performance of the public market, the value of bitcoin etfs such as Bitcoin Investment Trust (OTCMKTS:GBTC) has surged by around 133% since the beginning of the year, surpassing the growth rate of many publicly traded market favorites in established stock exchanges.

According to the financial data provided by OTC Markets, the share price of GBTC has increased from US$45 to US$63 per share, marking a 28.5% monthly increase. Each share of Bitcoin Investment Trust guarantees the ownership of one tenth (10%) of a bitcoin. Thus, investors are currently trading bitcoin at an average price of US$630 per bitcoin on public markets.

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At the time of writing, bitcoin is being traded at around US$421 at prominent bitcoin exchanges including BitFinex and Chinese exchanges such as OKCoin. Which means, investors are purchasing bitcoin for nearly 33.2% higher than average.

Due to this valuation of bitcoin in the public market, many investors are advising individuals with retirement portfolios to include bitcoin as one of the main assets, as it will increase in value as time goes by. Some investors have begun to allocate over 10% of their retirement portfolios for bitcoin, expecting the price of bitcoin to reach a new all-time high in mid-2016.

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