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Asian Market Update – Monday: Ethereum Rallies as Bitcoin Tumble; Asian Stocks Higher

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Ethereum goes berserk in the new year

Ethereum continued on its wild ride higher during the Asian trading session Monday. By 4 pm in Hong Kong, ethereum was up 7 percent to $1,196, after reaching an all-time high of $1,228 earlier in the morning.

The solid gain on Monday morning extended a strong uptrend that started at the beginning of the year. Since December 31, ethereum has gained more than 50 percent.

With no specific news or triggers evident that could explain the rally, the ethereum rally right now appears to be driven primarily by psychology, fear of missing out (FOMO), and trend-following traders jumping on the bandwagon.

While ethereum rallied, bitcoin continued to tumble. By afternoon in Asia, bitcoin was down 2.7 percent to $15,710 on Coinbase. Bitcoin lost about 5.4 percent on Sunday, ending a 5-day winning streak, which saw the virtual currency gaining around 21 percent.

Litecoin price also lost about 3 percent to $264 at midday in Asian trading. The virtual currency sold off about 2.6 percent on Sunday, after moving up by 15 percent since Friday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 23,714 0.89%
China-Shanghai Composite Index 3,403 0.35%
Hong Kong –Hang Seng 30,749 -0.04%
South Korea-KOSPI 2,513 0.62%
Australia-ASX 200 6,129 0.11%
S&P 500 E-Mini Futures 2,745 0.09%

Major Asian equity markets pointed higher on Monday, extending a New Year’s rally and shooting for new all-time highs. A brighter outlook for the global economy appears to be boosting investors confidence, while geopolitical and other market driving forces remaining quiet so far.

Japanese stocks led the way on Monday morning, with the Nikkei 225 index gaining 0.89 percent at midday to 23,714. The benchmark has gained nearly 500 points since Thursday, up from 23,225.

Japanese Prime Ministry Shinzo Abe called on the Bank of Japan to maintain efforts to prop up the Japanese economy, but remained mum about the appointment of the BOJ’s next chief. The current chief has advocated a continuation of ultra-easy monetary policies despite missed inflation targets.

In South Korea, the Kospi was up 0.62 percent to 2,513 at midday.

On the Chinese mainland, the Shanghai Composite Index was up 0.35 percent at midday on Monday to 3,403. In Hong Kong, the Hang Seng Index was down 0.04 percent to 30,749 at midday.

The People’s Bank of China skipped a scheduled cash injection into the market through its open market operations for the 11th straight trading day, as the central bank has determined that liquidity levels were “relatively high.”

Down under, the ASX 200 was 0.11 percent higher at 6,129 at midday.

The S&P 500 E-Mini Futures was up 0.09 percent to 2,745.

Market sentiment has improved by a slew of upbeat data last week, including manufacturing PMI in China and Japan, a solid US jobs report. This week, investors are waiting for China’s inflation data on Wednesday, US consumer prices and retail sales, expected on Friday, and global trade figures on Friday.

Currencies

The Japanese yen lost 0.14 percent against the US dollar at midday Monday, changing hands at 113.17 per dollar.

The Chinese yuan up gained a slight 0.01 percent against the US dollar at 6.4866 per dollar.

The Australian dollar lost 0.25 percent on the dollar, changing hands at 1.2746 per dollar at midday.

Commodities

WTI Oil was up 0.02 percent to $61.58 per barrel at midday on Monday.

Brent Crude gained 0.03 percent to $67.73 per barrel.

Gold was down 0.02 percent to $1,320 an ounce.

News across Asia

In China, French president Emmanuel Macron has arrived in the northwestern historic city of Xi’an for his first official visit to China. Macron is due to arrive in Beijing and hold talks with his Chinese counterpart Xi Jinping on Tuesday. As is customary for such visits, Macron’s trip is expected to see a slew of business deals between Chinese and French companies.

Take away: Chinese companies have already invested heavily in France, with about 6 billion euros of Chinese investments in France so far. Though Chinese investments overseas have declined in recent months, companies are still eyeing opportunities overseas.

In Vietnam, a campaign to crack down on fraud and mismanagement in state-owned energy companies and banks have gathered case, as the country started the high-profile trial of 22 executives of the state oil firm PetroVietnam on Monday. The executives are accused of mismanagement that resulted in severe losses for the oil firm, and some could reportedly face the death penalty.

Take away: Vietnam has been trying to crack down on fraud and mismanagement in its state-owned assets, amid wide-spread corruption in sectors such as energy and banking.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Market Overview

Tighten that Belt!!

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Hi Everyone,

Over the last four years, the European Central Bank has managed to inject €2.6 trillion into the banking system in order to maintain economic stability.

To be clear, these cash injections have been one of the only things propping up the economy, and even the Governor of the ECB has now admitted that.

Now, €2.6 trillion may not sound like a lot of money but we need to consider that this money is then multiplied by the fractional reserve banking system with each Euro created then being lent out multiple times. So the actual amount of money that went into the system is much higher.

Here we can see the level of M3 money in the Eurozone going from less than €10 quadrillion to more than €12.27 quadrillion in just four years.

Yesterday, the ECB announced that they will stop injecting new money into the system. In the United States, they are already starting to extract money by allowing the bonds they’d purchased to lapse. In Europe, they’ll be renewing their bonds for now.

So, for those of you reading these daily updates and wondering what monetary tightening is, this is how it works and it is having a massive impact on the markets.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Poor China Data
  • USD Getting Strong
  • Bitcoin Bulls are Still Bullish

Please note: All data, figures & graphs are valid as of December 24th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks declined during the New York session yesterday. There were a bunch of headlines about a possible government shutdown but that’s probably not the catalyst for falling stocks. Just a sideshow distraction.

As we mentioned above tightening monetary policy is the driver here. During most of the year, stock bulls were able to say that the economy is still doing very well, but unfortunately, they don’t even have that leg to stand on anymore.

The US jobs report last week was dismal and the GDP in Q3 was a clip below the national average.

Things didn’t get much better in the Asian session either. Chinese investors drank their morning coffee reading headlines like this

To put the numbers into perspective, here is a graph of China’s industrial production since the crisis.


… and here is one for the retails sales. These are the lowest figures in more than a decade. An outright shock for economists whose forecasts were already low.

As you can probably imagine, the entire global stock markets are in risk-off mode by now.

USD Strength

In line with the risk-off mood, it’s likely that many traders are moving to cash. This could be the reason the US Dollar is testing new highs at the moment.

Here’s the graph we’ve been tracking that shows a rather clear ascending triangle for the US Dollar index. Definitely looks like a breakout pattern.

Similar to what we saw in August, the emerging market currencies are getting the biggest wallop. Here we can see the LiraRand, and Peso getting bucked.

At this point, only the Japanese Yen is a bigger safe haven but only slightly.

Bulls Gotta Bull It

To say that I’m bullish on bitcoin is an understatement, but even my extreme optimism is overshadowed by some of the other analysts in the industry.

As much as I respect Mr. Lee and appreciate his view, the above headline did raise a few alarm bells in my head.

In my personal philosophy, the market is never wrong. Fair value is what someone is willing to pay for it. I can understand how using metrics to try and determine what the price of an asset should be can be helpful. However, if nobody is willing to pay that amount, then it isn’t the correct value.

During the interview, Thomas even went as far as trying to reverse engineer his own calculations showing how given the current price of bitcoin, there should be far fewer active wallets. This thinking sounded a bit silly to me as well.

Sure, I believe that bitcoin can grow in value very quickly. After all, there is an extremely limited supply. But for that to happen demand needs to pick up first.

Have an amazing weekend!!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreenspa

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 139 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

U.S. Stocks Drift amid China Trade Talks; $133 Million ICO Shuts Down Over Regulation

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U.S. stocks traded mixed on Thursday, as investors carefully monitored ongoing trade negotiations with China following a string of positive developments in recent weeks. Basis, an up-and-coming stablecoin project, has confirmed it will close operations and refund investor accounts over regulatory bottlenecks with the Securities and Exchange Commission.

Rally Loses Steam

After a strong midweek performance, Wall Street’s major indexes struggled to regain momentum on Thursday. The Dow Jones Industrial Average pared much of its 200-point gains. It eventually settled at 24,596.30, having gained 69.03 points, or 0.3%.

The broader S&P 500 Index pared losses to finish flat at 2,6050.53. Five of 11 primary sectors recorded losses, led by materials and financials. On the opposite side of the ledger, defensive plays tied to utilities and consumers outperformed the market.

The technology-focused Nasdaq Composite Index declined 0.4% to finish at 7,070.33.

Trade Talks Take Positive Turn

Progress on a comprehensive trade agreement between the U.S. and China appears to be headed in the right direction after Reuters reported that Chinese state-owned enterprises were loading up on American-made agricultural products. In a report published Wednesday, Reuters said that government-backed companies held 500,000 tons of U.S. soybeans.

Earlier in the week, Hacked confirmed that China was shifting course on an industrial blueprint that prioritized domestic companies over foreign competition. The Made in China 2025 plan will likely get a makeover in the near future to allow greater competition in the domestic market. This means potentially greater access by U.S. companies to vital Chinese industries.

China and the U.S. are in the midst of a 90-day truce, which came out of a face-to-face meeting between leaders of both countries in Buenos Aires earlier this month. China has already lowered tariffs on U.S. autos to 15% from 40% while President Trump has delayed a tariff hike on $200 billion worth of Chinese goods initially scheduled for Jan.1.

Basis Stablecoin Shuts Down

One of the biggest stablecoin projects to come out of the ICO boom confirmed it was closing down Thursday, citing regulatory concerns in the United States. Basis, which raised $133 million via initial coin offering, will begin the process of refunding investors in the coming days.

Nader Al-Naji, CEO of the company behind Basis, Intangible Labs, told Forbes that there was no way his project could avoid security classification – a label many in the industry consider undesirable.

“We met with the SEC to clarify a lot of our thinking,” Al Naji said. “The SEC generally avoids saying that something will definitely be one way or the other. But from that meeting we got the impression that we would not be able to avoid securities classification.”

The U.S. Securities and Exchange Commission has warned cryptocurrency startups that their token offerings are subject to federal oversight and that regulators make no distinction between “utility” assets and securities. The only notable exceptions are bitcoin and Etheruem, which the SEC deems to be “sufficiently decentralized” to be considered securities.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 698 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Market Overview

The Future of Crypto

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Hi Everyone,

When the crypto bull market was still in session, the next big thing for Wall Street was set to be Ethereum futures. Now it seems they’re back on the menu.

Futures contracts were originally invented so that farmers and merchants could hedge costs before engaging in a specific venture.

For example, imagine you want to drill oil and you more or less know your production costs but don’t want to take the risk that the price will drop by the time you’ve got the barrels ready for selling. You simply buy a futures contract for oil before embarking on the venture in order to lock in your profits in advance.

As the world goes further towards the tokenization of financial assets, the service of locking in future prices for Bitcoin and Ethereum could become essential for entrepreneurs. So, the CFTC in the United States is now asking the community for help to understand the industry’s needs so that they may accommodate them.

For those of you reading who are familiar with the ins and outs, please feel free to submit your comments to them using this link: https://www.cftc.gov/PressRoom/PressReleases/7855-18

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Stock Rally in Suspect
  • Draghi Day
  • Have we finally found bottom?

Please note: All data, figures & graphs are valid as of December 13th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Yesterday’s global stock rally seems to be stalling today. Indices are in the green today but the excitement may be fading. With all the recent comments from economists about how the cycle might soon come to an end or that we could be heading for another crisis, it’s difficult for traders to fully buy into any upward momentum at this time.

Crude oil is also testing the lows at the moment, and if does manage to break below $50 a barrel it could be potentially destabilizing.

European Central Bank Event

By the time you get this, the European Central Bank will probably have concluded their press conference already.

At the moment, expectations are that they will continue to wind down the quantitative easing program or possibly end it all together. Even though interest rates are not expected to rise for another year or more, it seems apparent that the ECB is following in the footsteps of the US Federal Reserve in tightening up monetary policy.

Money has been flowing freely into global markets over the last decade and it’s going to be very interesting to see what happens when that money begins to be tightened once more.

Crypto Floor Possible?

With all the progress in the crypto industry lately, it’s extremely difficult to understand why prices have fallen over the last month.

Here we can see the massive slide down in bitcoin that’s been happening since November 14th. From its all-time high to the new low from last Friday bitcoin has fallen a total of 84%, which is more or less in line with the level of retracements that the asset has seen in previous cycles.

As we have previously discussed when bitcoin broke below the psychological level of $5,000, the current area of support is between $3,000 and $3,500. So we are very much in this area right now.

A breach to the downside could certainly cause further selling and a lower low. However, a strong push upward from these levels could actually serve to shift sentiment and change the trend.

With the high number of short sellers across various exchanges right now, even a small push up could potentially affect a short squeeze in the market. Imagine such a squeeze on the level that would bring us firmly above $5,000. Such a move would very likely be interpreted in hindsight as the capitulation that everyone has been waiting for.

Guess we’ll need to wait and see how it plays out.

Have a lovely day!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreenspa

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 139 rated postsSenior Market Analyst at Etoro.com.




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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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