Cryptocurrency trading tips: week 49 review: quick correction in an uptrend

Last week, cryptocurrencies went through a quick correction, which was as sharp as the ascend that preceded it, as traders and investors took some profit off the table following big gains in the prior week.  During a volatile week, Bitcoin (BTC) reached new YTD highs at $19,200, then dipped by 15% to $16,200, and then recovered most of the loses.

Even following the quick correction, some altcoins advanced further (XLM, XRP, XEM, KSM, ZIL, DASH).

Some altcoins didn’t participate in the rally at all (ABBC, OCEAN), which makes one wonder why. What would it take to make buyers notice these poor orphans.  If the rising waters are not enough to lift these boats, what will?!  Traders are probably better off focusing on the winners than searching for “value” altcoins that haven’t moved up yet.  But to each his own.

We believe that those altcoins that ran up and corrected are showing us that traders / investors care about them and are likely to rally again on the next market upswing.  You can find more coins with a Pullback in Uptrend in our Signal Summary section.

Last week we also posted a couple of videos with trades in LEO and BAT, demonstrating how to find and trade breakouts from Ascending Triangle and Resistance key level. 

What’s driving market overall?  Adoption by early majority (see chart).   We believe that PayPal’s announcement to enable buying of four major cryptocurrencies (BTC, ETH, LTC, BCH) has created a surge in demand for BTC from PayPal’s 361M users, which then pulls demand for altcoins.  We quantified PayPal’s potential impact on demand for Bitcoin in this article, where we concluded that PayPal’s user base could generate demand for over 15% of Bitcoin’s current market cap over the next 12 months.

In addition to retail investors, adoption from institutional investors and corporations is also ramping up.  Recent prime example is Guggenheim Partners, which in a filing with SEC disclosed its intentions to invest up to 10% of its Macro Opportunities Fund into Bitcoin through Grayscale Bitcoin Trust.  That 10% would represent about $500M worth of Bitcoin purchases.

Although overall, more assets (2 : 1) remain in a downtrend than uptrend, the ratio is still in an uptrend (improving), which forms a good backdrop for bullish traders.  We can see that uptrend on a Medium- and Long-Term basis (see charts below).

You can monitor these trends on the Signals Summary page, which also contains shortcuts to strategy screeners and signals.

Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice. There are risks associated with investing in cryptocurrencies. Loss of principal is possible.