Altcoin

Three-Coin Thursday #1 – An Altcoin Trader’s Blog


In this new weekly series, I’ll be sharing my analysis on three altcoins selected by you on Twitter. All you have to do to have your coins featured following this first post is tweet me their cash-tags with #ThreeCoinThursday, so I can keep track.

For this first instalment, I’ll be covering three coins that seem to be very popular on Twitter at the moment: $ZEC, $LSK and $ETC:

ZCASH

ZEC/USD

Weekly:

ZECUSDWeekly

Daily:

ZECUSDDaily

ZEC/BTC

Weekly:

ZECBTCWeekly

Daily:

ZECBTCDaily

Analysis:

So, Zcash has experienced somewhat of a resurgence since late last year and there is much discussion on whether it has finally found a cyclical bottom.

Let’s take a look at its Dollar pairing first before moving onto ZEC/BTC.

Beginning with the Weekly chart, we can see that price has been in a macro downtrend for well over a year, with price breaching new lows month-on-month. That is, until recently. We did appear to find a bottom back in November 2018, in fact, where price hit fresh lows of $46.70 and consolidated for several months at that base before rallying to prior support turned resistance at $107. A peak formed at $140 in June 2019 (as it did for many other altcoins in the transition between Q1 and Q2 2019) and price bled consistently for weeks, taking out the low at $46 and find new lows at $24.25 in November 2019. There was some trendline resistance that had been put in, as can be observed, but it proved insignificant (as trendline often can) and price simply consolidated through it at $37.80 in September 2019. Having made its all-time low, price found a new base and consolidated between $24-$38 until the turn of the New Year; since, price has rallied hard, breaking well above $38 and reclaiming support at $46.70, all within the space of a couple of weeks. As of this week, price appears to be pushing on towards resistance at $75.

Now, looking at ZEC/USD on the Daily timeframe, we can more clearly see market structure was bearish between June and December 2019, with old supports becoming resistance on the way down. As price consolidated below $35 in December, volume began to pick up a little, followed by a lull over the Christmas period and then a breakout on massive volume in January. Most significantly, price cleared $44, which successfully turned market structure bullish, and price rallied on above the 360-day moving average; something which had not occurred since the peak in June 2019. Price ten fell off a little, retesting $44 as reclaimed support and rallying all the way back to new highs at $66.75. There is something of concern here, however: volume appears to have dried up on this rally, with nowhere near as much being traded over the past week. Moreover, at the moment, it appears ZEC/USD is printing a swing-failure of the $66.75 high from earlier this month. If price is unable to close above it today, it would likely signal a short-term top and I’d expect the 360MA to be retested, possibly with a further downside move back to the swing-low above $44. RSI appears to be printing a bearish divergence, which gives some confluence to this idea. Now, if price closes above, this would invalidate the possible bearish scenario and bullish continuation would be likely.

Now, turning our attention to ZEC/BTC, we can see from the Weekly that there has been a very rough downtrend effectively since inception, and that price has rarely found a base for very long before making new lows. In September 2019, however, it hit 0.0036 and there it remained for 3 months, consolidating between range support and resistance at 0.0046. Volume was moderate during consolidation, but as price broke out above 0.0046 it exploded. The Weekly closed clean above resistance early this month and the subsequent weeks have been spent inside its range. Price is currently pressing up against prior support at 0.0079 and trendline resistance from 2018 looms overhead.

Looking at the Daily chart, we can see that ZEC tested range support at 0.0036 several times in 2019, always bouncing but always failing to hold above 0.0046. Volume began to pick up in December and price then broke out above range resistance in the first week of January. Following the breakout, price continued to rally, closing above 0.0052 – the last resistance in sight prior to 0.007. As one might expect, the gap was filled and price peaked at 0.0074, just shy of the 360-day moving average and support turned resistance at 0.008. It is above this area that I would begin to consider that ZEC has found its cyclical bottom, as it has failed to trade above this MA since inception. The volume also needs to pick up again, as this past week has seen very poor trading volumes relative to the week that made the high. If we get a close above 0.008 on solid volume, I’m a buyer of ZEC on dips moving forward. If price rejects here, expect it to retest 0.0052.


LISK

LSK/USD

Weekly:

LSKUSDWeekly

Daily:

LSKUSDDaily

LSK/BTC

Weekly:

LSKBTCWeekly

Daily:

LSKBTCDaily

Analysis:

Lisk is another coin that appears to be breaking out of its long-term downtrend since the turn of the New Year, though there is plenty of resistance ahead.

Beginning with LSK/USD, from the Weekly timeframe we can see that Lisk has been in a downtrend since Q4 2017, breaking new lows every few months. This downtrend culminated in a low of $0.45 in December 2019; incidentally, this was the area at which price originally traded upon listing back in May 2017. That historical resistance appears to have become support and price has since rallied hard, breaking above trendline resistance from December 2017. It is currently pressing up against support turned resistance at $0.98. Ignore the lack of volume here, as I provided a Bittrex chart for the Weekly timeframe, simply because it has full price-history.

Turning to the Daily chart, which is from Binance, we can see that volume on the decline from June 2019 was effectively non-existent, as was volume prior to that peak at $2.37. Funnily enough, that peak was right at the 360-day moving average, below which price has remained since the bear market began back in late 2017. Ultimately, after months of bleeding, price bounced sharply at $0.45, not even consolidating and forming a base, but instead forming a V-shaped reversal that we can observe on the chart. Price broke out above trendline resistance earlier this month on relatively high volume and has since maintained an uptrend, with price, as of today, coming into significant resistance just shy of $1. The 360MA is overhead at $1.25. I expect we may see some selling here, with price perhaps retesting the short-term trendline support that it has recently rallied away from. If price closes the Daily above $1, I expect it to continue another 25% towards the 360MA before finding any further resistance.

Looking at LSK/BTC, the Weekly chart is very interesting to me, as it resembles a classical altcoin market cycle: price rallied up from lows of 7268 satoshis in 2017, peaking in December 2017 at 352,600 satoshis; the cycle topped out and the bear market began, with price bleeding for two years, culminating in a low at… you guessed it… 7200 satoshis. In fact, price has spent over 4 months inside the range of the Weekly candle that preceded the 2017 bull cycle. That is significant, as a close above 11,200 satoshis would be a key indicator for a cyclical reversal.

Looking at the Daily chart, we can see that price actually bottomed at 6450 satoshis in early January but immediately bounced and remained above 6900 satoshis following it. Since, price has been in a firm uptrend, with volume spikes coming in as price has been rising, suggesting to me that this may all still be a process of accumulation, given that Lisk did not consolidate at the lows; however, as mentioned previously, it has consolidated inside a much larger range, between 6900 and 11,600 satoshis, for several months, and so I am waiting for a breakout on strong volume above 12k satoshis before I start buying dips. The next resistance after this would be at 18,000 satoshis, which coincides with the 360-day moving average. If price rejects a move above range support, I’d expect a move back to the mid-point of the range, around 8,300 satoshis.


ETHEREUM CLASSIC

ETC/USD

Weekly:

ETCUSDWeekly

Daily:

ETCUSDDaily

ETC/BTC

Weekly:

ETCBTCWeekly

Daily:

ETCBTCDaily

Analysis:

Ethereum Classic has been on an absolute tear for several weeks now and remains looking strong.

Beginning with the Weekly chart for ETC/USD, we can see that price initially peaked at $47 in December 2017, following which price bled for almost a year, bottoming at prior resistance turned support around $3.28. Price then rallied for a couple of months and tested prior support turned resistance at $9.50, having broken above trendline resistance from Q1 2018, but failed here, culminating in a double bottom at $3.28 in December 2019. Price did, however, remain above trendline resistance during the downtrend, with it often acting as support. ETC has since broken above more recent trendline resistance from May 2019 and closed firmly above short-term resistance levels at $5.13 and $7.77. Most significantly, it failed to close above the prior support turned resistance at $9.50 on the week of the breakout, instead peaking at $11.95 and closing back below resistance. Price then tested $7.77 as support and has since moved back above the all-important pivot. Why all-important? Because not only was $9.50 the catalyst for the move to the all-time high at $47, but it also preceded the capitulation to $3.28. If we get a Weekly close above this area, this would be extremely bullish moving forward and I would be getting long on any dips. Ideally, I’d like price to close above $12 this week and then retest $9.50 in February to get long for a position trade.

Looking at the Daily chart, we can see that price also poked above the 360-day moving average back in June 2019, where it failed at a confluence of resistance levels, leading to the double bottom above $3.07. Volume began to pick up subsequently, as price rallied above the 360 MA earlier this month, closing above numerous levels in the process. Volume exploded when price attempted to climb above $10, but it was rejected at prior support of $12.07 and came back to retest $7.80 as support. Since then, volume has remained strong, though not as high as the prior week, as price has rallied back above $12. It is hard not to be bullish when you look at this chart, but, short-term, it does appear that we may get a dip, with a potential swing-failure unfolding, as well as bearish divergence. If we do get that dip, I would love to get long below $10.

Looking at ETC/BTC, we can see from the Weekly chart that price was in a macro downtrend from April 2017, having peaked at 0.0092. That’s almost 3 years of bear market. It is absolutely no wonder that the reaction from the lows has been so violent. Importantly, we can see that, prior to ETC’s only bull cycle, it formed a base between 0.00098 and 0.0017. The range resistance became support for a large part of ETC’s bear market through 2018, before giving way in Q3 2018. Price then fell swiftly to support at 0.00098 before retesting 0.0017 as resistance and falling to new lows. In July 2019, price hit 0.00048 and this remained the base for several months, with range support coming in at 0.00075. Price then rallied away from consolidation earlier this month, closing the Weekly above trendline resistance from April 2017.

Finally, looking at the Daily chart, we can clearly see the breakout a couple of weeks ago above support turned resistance at 0.00075 and subsequently the 360-day moving average, with ETC trading above it for the first time since 2018. Volume picked up massively this month and continues to look strong, even with the wick and rejection at 0.00135 from a couple of weeks ago. Price appears to be reaching for 0.00157. I am hoping for a period of consolidation and a dip to retest 0.00091, where I would like to get long. Failing that, if price closes above 0.00157 before a dip, the next area to get long would be a retest of 0.00135 as support.

And that concludes this inaugural Three-Coin Thursday.

I hope you’ve found some value in the read. Remember to tweet me @cointradernik with your coin requests for the next #ThreeCoinThursday.

If you have any questions, feel free to leave a comment!




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