I often read about cryptocurrencies, and a curious thing is that they are considered as a single asset class. Equity, bonds, cryptocurrencies...
This is just a way to organize ideas and simplify the realty. Actually we have to be honest: some months ago there was a high correlation between cryptos, so Bitcoin led the movement and the others followed.
In today's analysis we'll see that it's not true anymore, so our investment strategy could be more sofisticated, introducing new concepts like diversification and portfolio management.
That's way I changed the title of this article from "Make your choice", that gives an idea of unique choice, to "Place your bets", plural not for chance.
CRYPTOCURRENCIES BY COMPARISON
The chart shows the performance of cryptocurrencies in October. As you can clearly see, history wasn't the same and not only for total return, but in particular for how it was reached.
Looking at positive correlation, the only one we can see is between Ethereum and Litecoin: all the others are moving in different ways. And this is a consideration we have to do if we want do diversify the investment.
BITCOIN
MEDIUM TERM
Daily chart
Who doesn't believe in technical analysis shold look at this chart. After the breakout of yesterday, price went precisely to the upper part of ascending channel and there it stopped.
Now we are in a difficult situation, because there are some negative signals that we need to consider:
1- Reversal on upper part of the channel
2- Overbought in RSI
These two points don't give an automatic sell signal, but they could indicate a transition needed to normalize the situation after last breakout.
In this context, the most important level is previous high, at 4967$, a support that must hold to maintain a positive medium term view.
SHORT TERM
1 hour chart
As written before, we could expect a normalization with a sideways movement between 5474$ and 5770$. We have a little divergence between price and RSI, that need to unload after the high overbought accumulated.
ETHEREUM
MEDIUM TERM
Daily chart
"And yet it moves"
After some days at 300$, finally it did the breakout we were expecting.
The movement was very strong and this is proved by high volumes.
First target at 338.5$ has been reached, so we must understand if it has the strenght to go further. Looking at indicators, we have a positive answer: RSI is just at 60 and it has more room to go up. Similar situation for MACD that has just passed the zero line.
So it seems very probable a continuation of this movement up to 394.78$, previous high.
SHORT TERM
1 hour chart
Not more to add in short term view. We can just repeat what we have written before. It seems very probable a breakout of first resistance at 338.5$, that could become a good support for a conslidation phase.
____________________________________________
If you like this post, fell free of sharing it on social networks. You can also keep updated on CryptoCharting analysis, just pressing "SUBSCRIBE" button on the top of this page.
Comments are welcome!
Comments
Post a Comment