The monthly charts in September show very strong upward movements. To show evidence of a likely reversal, I look at two of the worst altcoins: ZRX (0x) and XLM (Stellar).
Does September signal a new bull movement?
The psychological impact of three months of consolidation followed by an abrupt and violent crash can have a profound effect on participants’ emotions. No one who is a constant consumer of cryptocurrency news and price promotions is unaffected by the rapid moves that cryptocurrencies can make. And it’s very easy to get caught up in the everyday movements that we forget to make a much more zoomed out view. Taking a look at how cryptocurrencies have performed throughout September is kind of a “gotcha” moment. I say this because there are a surprising number of bullish signals on many monthly cryptocurrency charts.
Ox’s monthly chart is definitely one of the rarest altcoin charts you will find. First, I think it’s important to double-check how ugly this chart is. If we count the months since the all-time high against Bitcoin (May 2018), we get 17 months of bear market. What is really bearish is the number of months that were green: only 4 out of 17 and none of them were consecutive. And in 2019, there was only one month that 0x had a closing price above its monthly opening: March 2019. The last major swing high that 0x experienced was in the month of April at the Sats level of 8241. From April 2019 to at the low of 1465 Sats in September 2019, 0x fell over -82.22% of its value. To make that percentage loss even worse, 0x has suffered the longest consecutive monthly bearish candles in its history – 5 consecutive months lower. But that has changed (unless something terrible happens between now and today’s close of trading). 0x has gained an insane + 46.06% against Bitcoin! Not only that, it is also up + 26.09% against the US dollar. The current monthly candle is one of the most desirable bullish reversal patterns you could ask for: bottoming bullish engulfing candlestick. The current monthly candle not only has a closing price above the opening price, but the closing price is also above the entire August range. September also shows a lower low and a higher one than August. But the volume is strong confirmation of an upward move. The monthly volume for September is larger than any of the last 5 months and is the third highest month of 2019. I would expect there to be some massive upward moves for 0x through 2020.
Stellar was by far one of the underperforming altcoins in the past two years. The graph above shows Stellar’s Bitcoin and from its all-time high in January 2018, Stellar has lost almost -92% of its value. Stellars’ US dollar pair is even worse: -95.39% from the same highs seen in January 2018. Stellar didn’t even get a compassion rally in early 2019! It’s almost funny, but Stellar only had one month in 2019 that it had a closing price above the Open. And just like 0x, Stellar has spent the last 5 consecutive months trading lower. To add insult to injury, Stellar has had a whopping 5 months total over the past 21 months with the closing price above the opening price. But this current monthly chart from September 2019 shows that things are about to change. The current candlestick is known as the “spinning top”. Not a spinning top like in one direction, but a spinning top like a toy. The likelihood of a bullish reversal is already high with this pattern, but if the upper shadow / wick is larger than the lower shadow and if it is also longer than the body, then an upward movement is even more likely. But this chart, even above 0x, has another great signal of reversal: volume. The volume on the Stellar chart is higher than any previous 5 months and is the second highest volume in the last 10 months. From December 2018 to September 2019, March 2019 was the only month with a higher volume than September 2019. And the volume in September is more than 3.5 times August. From here I would expect a strong upward move.