Stellar Short

XLM deflates after 55 percent rally, Bitcoin traps sellers

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September 20, 2019 Welcome to the weekly edition of the CoinDesk Markets newsletter! Every Friday we will review our cryptocurrency price predictions posted during the week via CoinDesk Markets Twitter  or our private room on StockTwits, the CoinDesk Dojo.  "Trades You Missed" will feature our favorite trade ideas or technical analysis insights that accomplished impressive gains, where as "Trades We Missed" will feature those that took a turn for the worse. Wins and losses are both part of the trading game, so we hope you will learn how to replicate our successes and minimize losses!   Stellar Price Pulls Back From Two-Month Highs XLM/BTC: Price: 746 sats | MCAP: 148,774 BTC  | Maximum Gain: +9.80% Why we were intrigued: XLM/BTC rallied 55 percent in the first half of the week to hit a high of 0.0899, a level last seen on July 22. The sharp rise caught many by surprise and left the cryptocurrency overbought on technical charts.  Notably, on Thursday, the hourly chart was reporting a bearish divergence of the relative strength index. A bearish divergence occurs when the indicator charts lower highs, contradicting the higher highs on price.  It is widely considered an early warning of an impending bearish reversal. Further, XLM/BTC had charted a bearish doji reversal on the hourly chart on Thursday.  Hence, a short XLM/BTC call was initiated on CoinDeskDojo during the U.S. trading hours yesterday. At that time, XLM was trading at 837 sats.  Prices slipped to our target of 755 sats and extended losses to hit a low of 734 sats during the Asian trading hours today.  As of now, XLM/BTC is changing hands at 746 sats. Despite the pullback, the outlook as per the daily chart remains bullish, given the cryptocurrency is holding well above the former resistance-turned-support of 700 sats and the 5- and 10-day moving averages are trending north.  A strong bounce from 700 sats could yield retest of recent highs near 900 sats.  The Trade The Result  Quick Exit Ensured There Was No Loss BTC/USD: Price: $10,200 | MCAP: $183.42 | Maximum Loss: Nil Why we were intrigued: Bitcoin fell to an 18-month low of $9,600 on Bitstamp during the Asian trading hours on Thursday.  The price drop bolstered the bearish setup on the 4-hour chart: a failed falling wedge breakout followed by a bearish lower high and a drop below key support of $9,855.  As a result, the cryptocurrency was looking weak and primed for a deeper drop to levels below $9,500. So, a short call was initiated in the European trading hours on Thursday, when BTC was trading around $9,800.  The analyst recommended selling BTC above $9,900 as the hourly chart relative strength index (RSI) was reporting oversold conditions.  As expected, BTC bounced to $9,900, but the expected sell-off from that level never happened. The cryptocurrency remained flat lined for a few hours amid the rise in ether and other alternative cryptocurrencies, weakening the immediate bearish case. So, our analyst asked Dojo members to square off the short positions at cost.  Currently, BTC is changing hands above $10,200. Thursday's bullish hammer candle would gain credence if prices rise above $10,380 (hammer's high) today. That will likely invite stronger buying pressure, yielding a test of key resistances in the range of $10,900-$11,000. The Trade   The Result    We're excited to announce the launch of the CoinDesk Dojo, a premium subscription part of StockTwits' recently announced Premium Rooms product. Ask the analysts—Omkar, Sam and Seb—questions about charts and talk with other traders looking to profit off the volatility of the crypto markets.  Create an account on StockTwits and then subscribe! Subscribe Here   Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. Copyright © 2018 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences or unsubscribe from this list