Will Established Alts Ever See Their Former Glory? (XRP)
I'm a bit under the weather - was going to do a video update, but thought better of it, since I'd be coughing all over the place. Crypto Zombie mentioned my "double bubble" chart in his most recent video, which cheered me up a bit :) It's nice that after many months of analyzing this market, some people are beginning to appreciate the hard work I've put into it. I could have given up when Bitcoin dropped to $3200, but I stuck with it, and even timed the reversal in the market pretty perfectly, as well as setting $8K-9K as a potential target for that reversal. Links to some of those charts are at bottom.
Anyway, in this analysis, I'm going to do my best to figure out what's going on with established altcoins. By "established altcoins," I mean coins that have been around for more than a couple of years, or coins that profited immensely during the 2017 altcoin bull run. This includes many of the coins in my portfolio: ETH, XRP, XLM, NEO, VET, NANO, ADA, etc.
In the second half of this analysis, I'll talk about why I'm concerned. But first, here's why the market still looks fairly good, despite low volume and somewhat lackluster short term price action. Consolidation is fine. The market has increased by A LOT in the last several months, although Bitcoin has far outperformed most altcoins. In a recent post, I said that many altcoins could double within the next week, since they were building pressure at a major long term resistance zone. Some have already done this (mostly lower cap projects), but big money has yet to flow back into established alts, except Litecoin. Litecoin has the halving hype going for it though. It's interesting to me that NANO moved up a bit in tandem with LTC. Charlie Lee is a supporter of the NANO project, so I wouldn't be surprised to see some peripheral FOMO money head into NANO, just because the market is strange like that.
The altcoin market cap is currently trying to get back above the major neckline resistance I keep talking about. If we can break and hold above it again, chances would increase for money to flow back into other big alts. The green zone is where I'd be targeting if we break the channel to the upside:
The total crypto market cap is still finding the center of the long term bullish channel as support:
Right now, there are several reasons to be concerned though (particularly in terms of Bitcoin ratios). It's always important to remain objective. If we are to see big alts like ETH and XRP increase on their Bitcoin ratios any time soon, I would have preferred to see more sustained rallies off the recent lows. That has not occurred. XRP is continuing to make higher lows, but if it cannot get back into the bigger uptrend (orange), this could turn out to be a big bear flag with a target between 2000 and 3000. This will become more likely if we break down from the short term uptrend. On the USD chart, XRP has done well in sustaining above the 37 cents previous resistance. But if it breaks down from that recent uptrend and fails to continue building buying pressure on the $0.47-$0.50 resistance, it could fall all the way back to the $0.32 support. On the flip side, XRPBTC will be a buy if it breaks above the pink downtrend it's failed at for months (currently in the 6000 zone, to be conservative).
Looking at ETH as well, it has consistently failed to get back to any level against Bitcoin that would be considered bullish, although it's done better than a lot of other alts during the past couple of months. Depending on which way this breaks, it could be a giant bottom or a bear flag.
Other coins like NEO and ADA are also exhibiting concerning behavior (against Bitcoin). It's hard to tell whether this is a bear flag, or if it is an accumulation process, just as with the ETH chart above. Many alts (especially Ethereum) showed this kind of price action against the U.S. Dollar before they broke out to the upside.
It's very possible that the bear flags on these alts will be invalidated, but it's still in play here. NEO consolidated between the 1800 and 2400 zone for months before confirming it as a bear flag and breaking down. This consolidation is happening much quicker, which could indicate a bit more demand at current prices. GAS is on the rise, so this could mean that some demand is also returning to the NEO network. If GAS can't sustain its recent uptick, it would probably cause the bearish pattern to continue for NEOBTC as well. You can see it found resistance precisely at the past support level (around 1670). A breakdown could send NEO all the way to the 600 level (ouchies!). I will feel better about altcoins like NEO if they can reclaim their previous support levels.
Something else that bothers me is that there are only a few coins that are doing well at the moment. Some of them are the Binance IEO bunch (MATIC, ONE, CELR, FET, etc.). The good thing is, I'm starting to see some lower cap coins (GRIN, BOMB, ENG, GVT, etc.) make some positive moves. This, along with the fact that NEO GAS is moving up, could also mean that the Bitcoin sideways movement will soon give way to an altcoin season. I'm worried though, because it seems like people are only chasing the flavor of the day (or month), rather than investing in established altcoins for the long term.
It remains to be seen whether or not we will see altcoins reclaim their former glory against Bitcoin. It's possible that many will never see higher Bitcoin ratios again, and that the only projects that see any gains will be those that are newer and more hyped. There is too much sell pressure at the moment on established projects (likely people who got burned on the last bull run). Additionally, I know for a fact that many people who get paid in cryptocurrencies other than Bitcoin like to immediately convert to Bitcoin once they receive their payment. This creates a lot of sell pressure as well. If Bitcoin decides to go straight up to $50K-100K, as I projected as a possibility, it could leave many of these projects in the dust. But perhaps this is exactly the kind of sentiment that means that their ratios have bottomed ; )
This is not financial advice. Just what I'm seeing in the market at the moment.
Good luck out there.
-Victor Cobra
Anyway, in this analysis, I'm going to do my best to figure out what's going on with established altcoins. By "established altcoins," I mean coins that have been around for more than a couple of years, or coins that profited immensely during the 2017 altcoin bull run. This includes many of the coins in my portfolio: ETH, XRP, XLM, NEO, VET, NANO, ADA, etc.
In the second half of this analysis, I'll talk about why I'm concerned. But first, here's why the market still looks fairly good, despite low volume and somewhat lackluster short term price action. Consolidation is fine. The market has increased by A LOT in the last several months, although Bitcoin has far outperformed most altcoins. In a recent post, I said that many altcoins could double within the next week, since they were building pressure at a major long term resistance zone. Some have already done this (mostly lower cap projects), but big money has yet to flow back into established alts, except Litecoin. Litecoin has the halving hype going for it though. It's interesting to me that NANO moved up a bit in tandem with LTC. Charlie Lee is a supporter of the NANO project, so I wouldn't be surprised to see some peripheral FOMO money head into NANO, just because the market is strange like that.
The altcoin market cap is currently trying to get back above the major neckline resistance I keep talking about. If we can break and hold above it again, chances would increase for money to flow back into other big alts. The green zone is where I'd be targeting if we break the channel to the upside:
The total crypto market cap is still finding the center of the long term bullish channel as support:
Right now, there are several reasons to be concerned though (particularly in terms of Bitcoin ratios). It's always important to remain objective. If we are to see big alts like ETH and XRP increase on their Bitcoin ratios any time soon, I would have preferred to see more sustained rallies off the recent lows. That has not occurred. XRP is continuing to make higher lows, but if it cannot get back into the bigger uptrend (orange), this could turn out to be a big bear flag with a target between 2000 and 3000. This will become more likely if we break down from the short term uptrend. On the USD chart, XRP has done well in sustaining above the 37 cents previous resistance. But if it breaks down from that recent uptrend and fails to continue building buying pressure on the $0.47-$0.50 resistance, it could fall all the way back to the $0.32 support. On the flip side, XRPBTC will be a buy if it breaks above the pink downtrend it's failed at for months (currently in the 6000 zone, to be conservative).
Looking at ETH as well, it has consistently failed to get back to any level against Bitcoin that would be considered bullish, although it's done better than a lot of other alts during the past couple of months. Depending on which way this breaks, it could be a giant bottom or a bear flag.
Other coins like NEO and ADA are also exhibiting concerning behavior (against Bitcoin). It's hard to tell whether this is a bear flag, or if it is an accumulation process, just as with the ETH chart above. Many alts (especially Ethereum) showed this kind of price action against the U.S. Dollar before they broke out to the upside.
It's very possible that the bear flags on these alts will be invalidated, but it's still in play here. NEO consolidated between the 1800 and 2400 zone for months before confirming it as a bear flag and breaking down. This consolidation is happening much quicker, which could indicate a bit more demand at current prices. GAS is on the rise, so this could mean that some demand is also returning to the NEO network. If GAS can't sustain its recent uptick, it would probably cause the bearish pattern to continue for NEOBTC as well. You can see it found resistance precisely at the past support level (around 1670). A breakdown could send NEO all the way to the 600 level (ouchies!). I will feel better about altcoins like NEO if they can reclaim their previous support levels.
Something else that bothers me is that there are only a few coins that are doing well at the moment. Some of them are the Binance IEO bunch (MATIC, ONE, CELR, FET, etc.). The good thing is, I'm starting to see some lower cap coins (GRIN, BOMB, ENG, GVT, etc.) make some positive moves. This, along with the fact that NEO GAS is moving up, could also mean that the Bitcoin sideways movement will soon give way to an altcoin season. I'm worried though, because it seems like people are only chasing the flavor of the day (or month), rather than investing in established altcoins for the long term.
It remains to be seen whether or not we will see altcoins reclaim their former glory against Bitcoin. It's possible that many will never see higher Bitcoin ratios again, and that the only projects that see any gains will be those that are newer and more hyped. There is too much sell pressure at the moment on established projects (likely people who got burned on the last bull run). Additionally, I know for a fact that many people who get paid in cryptocurrencies other than Bitcoin like to immediately convert to Bitcoin once they receive their payment. This creates a lot of sell pressure as well. If Bitcoin decides to go straight up to $50K-100K, as I projected as a possibility, it could leave many of these projects in the dust. But perhaps this is exactly the kind of sentiment that means that their ratios have bottomed ; )
This is not financial advice. Just what I'm seeing in the market at the moment.
Good luck out there.
-Victor Cobra
Comment:
Due to the lack of demand, XRP has just broken down from the short term uptrend. It's encouraging to see the long wick, which shows that we did actually reach a level where there is some demand. That happens to also be around the $0.37 area (previous major resistance on the USD chart). That's the real area that should continue to hold if XRP is going to move higher in the near term.
Comment:
Here is an encouraging move from ONT. Perhaps we can use it to gauge short term altcoin movement, since it tends to be one of the coins that pumps the hardest. It's still trying to reclaim its long term uptrend support, but also seems be attempting to break out from the short term downtrend. It also made a weekly higher low against Bitcoin.
Comment:
ONT continuing to look strong. Could be a good sign for other alts. Let's see. It might be enough to invalidate the bear flag, since it's back above previous support turned resistance.
